Hiring members of your family can either be a blessing or a big pain. And it can be a really big pain when your family member doesn’t work out and you have to terminate them.
Below are 5 steps that you should consider when hiring family members.
- Hiring family because they can’t find a job is not a good reason to hire them. Make sure that you’re hiring or firing decisions are based on the skills that you need to make your business run smoothly.
- Before you actually hire your family members make sure they clearly understand your employment expectations. Clearly communicate the company policies for required job performance, compensation, promotions, and termination. Also, be clear that no unethical conduct will be tolerated.
- It’s a natural reaction to favor a family member over others. But, it’s important to avoid nepotism. Your non-family employees will be sensitive to any favoritism you show towards a relative.
- Document your family member’s job performance and maintain a detailed personnel file to track any behavior that may result in disciplinary actions, just as you would any other employee. Your documentation will provide a record to clearly explain reasons and evidence if it becomes necessary to terminate any of your employees including a family member.
- If you have to terminate a relative (or any employee), keep it professional. Set up a formal “termination” meeting. To prevent the meeting from turning into an emotional argument, invite a direct supervisor and/or a human resources professional to appropriately represent your company.
It’s important that you follow formal business standards and communicate in a professional manner whether your employees are related or not.
At Summit CPA we offer multiple resources that will help get your business on the right track. Contact our office at 866-497-9761 to schedule an appointment with our Virtual CFO.