Family Member Employment Strategies

Family employees can be a double-edged sword for the family business. They often display profound commitment to the enterprise, but if their employment does not work out for one reason or another it can be enormously disruptive to both the business and the family.

Having family members enter the family business should not be done casually, because there are high expectations on all sides. The employment relationship is highly charged, because of the history and intermingling of family and business worlds. Businesses that fall short in planning and addressing the trickier aspects of family employment can damage both business and family relationships, not to mention the career potential of individuals. Good employment policy and review practices are crucial for successful career pathing of family employees and protection of the enterprise.

Understanding Great Expectations and the Family Business Career

Often a family member’s role in the family business is nurtured from childhood, either overtly (“one day this will all be yours”) or more subtly, with parents focusing predominately on the business in family conversation.  For the child raised in this environment, the anticipation and planning for their role in the family business can lead to a sense of “entitlement,” born of real sacrifice, commitment, and an identity narrative created in the family.

Many rising generation stakeholders come to their role in the business with a disproportionate sense of commitment and expectation. Some next-generation family members feel compelled to devote themselves to advancing the business that has factored into their lives so strongly in their formative years, a response to external conditions more than to an inner call based on aptitude and inclination. It can also be a misguided appeal for respect and acceptance or recognition from a family member.

This Job Was Made for You—But Were You Made for This Job?

Family members sometimes join the family business for reasons of perceived obligation or unique opportunity, but their DNA or interest suggests that they are really made for something else.  Dissatisfaction and disillusion with their decision to join the family business can follow to derail the succession plan many stakeholders were counting upon.

Highly committed family employees who are truly a good fit can be a treasure for any family enterprise.  These are the employees who won’t leave when the going gets tough and who will burn the midnight oil.   But, when the fit between employee potential and family business role does not match, it’s important to uncover. Finding ways to promote self-awareness and empower individual career pathing plays a critical role in maintaining a strong business and family.

Career Pathing for Family Employee Success

Giving rising generation leaders every chance to succeed serves the interests of all stakeholders, yet the risk of failure can be devastating to the individual and entire family business system. Being able to effectively leverage the deep commitment and drive of the well selected and placed family employees can offer an enormous advantage to the business, the individual, and the family.

Four Ways to Promote Successful Family Employment and Career Pathing

    1. Establish reasonable family employment rules, such as requiring appropriate education and experience necessary to fulfill truly needed professional roles with job descriptions at the company
    2. Be aware of potential next-steps for well-performing family employees, in order to avoid career dead-ends
    3. Provide market-based compensation for positions
    4. Offer objective feedback and coaching needed for the family employee to navigate their career path within, or perhaps later outside of, the family business

Providing effective and accurate feedback for family employees can be a pitfall for many family businesses. Some family businesses avoid reviewing family members, because it can be too difficult and uncomfortable. Others treat the family member as any other employee and put them through the same review process as non-family employees, without considering either the structural difficulties that compromise this effort, or the additional review criteria to which family members should be subjected. Family members are standard bearers in the organization and must exemplify the ethical values the family has chosen for its enterprise.

Non-family managers often do not feel comfortable reviewing family members honestly when they consider the politics involved. Also, a family member may be on an atypical or accelerated career path within the company, and a standard review may not get to the heart of what’s needed for success.

The bottom line: Reviewing family employees requires a unique approach and is important for successful family employment. Specialized tools for family employee reviews, such as Relative Review 360™, address the unique responsibilities of the family employee and the equally unique conditions in which they work. With appropriate planning and consideration of the particular challenges inherent in family employment, the personal investment and deep commitment of family employees can truly set the family business apart.

Read about Strategies for Generational Transitions

RELATED CONTENT: Cultivating Successful Family Business Leaders, Developing Leaders for Generations of Family Business Success

About Us

Continuity Family Business Consulting is a leading advisory firm for enterprising families. Using a full suite of service capabilities, we help families prevent and manage the single greatest threat to family and business continuity: conflict. It is through this lens that we advise our clients and build customized strategies for succession planning, corporate governance, family governance, and more. We help families improve decision making, maximize potential and achieve continuity. To inquire, visit https://continuityfbc.com/contact-us or call (617) 500-3110.