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Want to hire family, friends to your business? Be careful

The separation between business and friendship is one of any entrepreneur’s biggest successes. [iStockphoto]

Many successful family businesses globally hit top levels under the stewardship of the sons and daughters of the founders.

Weaned on business, people like Mukesh Ambani of Reliance Industries, India, and the Mars, Walton and Koch brothers, all of who appear in the top 20 in The Forbes rich list, have inherited their businesses from their fathers.

And while it could be argued the founders would have had the same levels of success or even more, it is important to appreciate that sons and daughters, who might not be expected to share in the dreams of their fathers, are able to steer such businesses to greater heights even in instances where they do not achieve much.

There is another crop that seems to be more interested in going it alone, barely involving their family members and, at the earliest possible opportunity, keeping clear of friends who might have been there in the early stages of the business.

Microsoft founder Bill Gates, who held the top spot among the richest people globally since the late 90s and who still ranks among the top 10, is not known to involve his children in business.

He even said at some point that he was only leaving them a paltry $30 million (Sh3.67 billion) of his vast estate, arguing that doing more was going to be a disservice to them since they might not appreciate the value of the money.

Many founders who have started joint businesses with friends have fallen out with their co-founders, even suing each other and creating business enmity.

So how do you deal with friends and family in the business?

In a past interview, Ivynne Okoth, the founder of fashion, furniture and home décor online company Kairo, said one should not hire relatives or friends “unless you have the guts to fire them”.

“At the end of the day, it is business that matters. And for it to have longevity, you should be careful about running it on friendships and family ties,” she said.

Good entrepreneurs are even encouraged to refer their friends and family, who might be in need of employment, to other people who can hire them and steer clear of the temptation of keeping them close.

The most that one should do, writes the Corporate Staffing website, is let them intern at the company so they can gain some experience or hire them for a very short period.

But is it not outright evil to overlook family and friends when hiring employees?

Not quite. The separation between business and friendship is one of any entrepreneur’s biggest successes.

Where relatives and friends are qualified, hiring them is a good idea. If anything, having people who can form a relationship beyond the workplace, and who might “own” the business because they fear disappointing their relative or friend, is important.

Job site Jobberman says friends and family may tend to provide a business founder with unsolicited advice. This may be against one’s goals and vision.

“Do not allow these relatives and friends to feel they have a better idea of managing your business than you,” it says. “The fact that they are family or friends does not mean you welcome every suggestion they present to you.”

Working on environment

Indeed, sometimes the friction that comes with disagreements over decisions may lead to major fallouts and permanent damage to the ties that have existed for many years.

“In the working environment, emotions play a vital role in the engagement and performance of employees. Whether positive or negative, it affects the business,” Jobberman says.

“When close relations are hired, they have this sense of entitlement and may expect to be treated differently from other employees.”

Family and friends are usually expecting preferential treatment from their boss in such circumstances, and one may be unable to assert the authority required to steer the company to success.

These kinds of employees may get away with a lot of mistakes, some even born out of negligence, and the employers’ hands may be tied.

The employer may also have lofty expectations of his employees who he might expect to work very hard because they have the interests of the business at heart.

These hopes may be shattered as friends and relatives might lack a commitment, almost feeling entitled to be employed in the business.

However, in the case where the family member or friend has the qualifications, then hiring them is not detrimental to the well-being of the business.

They should go through a competitive selection process and should be made aware they are to receive similar treatment to other employees.

Some of the sons and daughters of the richest on earth, who have had to inherit businesses, have been properly trained and understand their job like any executive hired from elsewhere would.

They do not take their jobs as a favour done to them by the pioneers. They know they have clear-cut roles that they have to fulfil in their various capacities to keep their jobs.

The diversity that comes with hiring from outside one’s little circle is also an important advantage for any company. It brings new ideas, varied experiences and new ways of execution of duty.

The motivation of people one has sought from elsewhere is always superior as they know their longevity at the business is pegged on their performance.

Whatever business you are in, be wary of hiring friends and relatives. Unless you can fire, don’t hire.