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Family employees bring risk and value

Last updated 05:00 11/02/2013

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Small Business

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Q: I'm thinking of hiring a family member. Are there any pitfalls I should be aware of?

A: Yes there are. Family employees can bring with them the potential for complications, misunderstandings and headaches. The upshot of having the whanau around is the trusted relationship and dedication they can bring to the business.

The key to managing family members in your business starts with your treating them as any other staff member and being open with all staff about your relationship with the new employee.

Keep a transparent process in place, perhaps delegating direct management of your relative to another senior staff member or having another person present at important one-on-one interactions.

Understand the value they bring to the business and discuss this with them, alongside the role they are filling and what is expected of that role. Make sure other members of your family know this, too, as they can be more interested than they need to be if there is a problem.

Treat your relative like any other staff member but realise that there is less room for error because of the close relationship. It is a fine line, balancing the sensibilities of your existing team, and appreciating that any fallout with your new staff member could affect your family relationships. outside of work.

Nick Churchouse, venture manager at Creative HQ, Wellington's business incubator and startup hub, once worked for his uncle sweeping the shop floor. CreativeHQ.co.nz

A: Many people advocate never hire friends and family, but with some controls in place I have seen these combinations be some of the best performing teams.

Hiring family members can work well but define roles and expectations clearly. Set up a formal job description and employment contract. Warn that you're likely to expect more of them than any other staff member and hold them to higher standards. Establish some boundaries and ways to communicate when things go wrong.

If the family member is going to hold a senior management position, set up an advisory group with an external non-family member as chairman. I have worked with husband and wife owners who have used the advisory group meeting to resolve differences in business opinion in a controlled and non-emotional way, avoiding long-lasting emotional arguments.

Mark Robotham is an SME business adviser. Website: growthmanagement.co.nz

If you want to ask a question of either of our experts, email rebecca.stevenson@fairfaxmedia.co.nz

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- BusinessDay.co.nz

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