At some point, every family business faces the decision whether to hire a family member into the organization. With each passing generation, this decision becomes more complex as the family grows through the addition of spouses and children. This is when a well thought-out family employment policy can be of great value.
A good policy accomplishes three main goals. First, it lays out the criteria for how family members are hired into the business. It also helps management instill a more business-oriented environment. Finally, it allows family members in management positions to remove emotions from hiring decisions.
Below are three key elements for developing your own successful policy:
1. Purpose and Philosophy
A good family employment policy starts with statements about its purpose and philosophy on hiring family members. There should be statements that summarize the overall message and the reason for establishing the policy. A definition of who is considered family should be included. Here you should be setting the overall tone of the policy.
2. General Conditions
This is the section where the rubber meets the road. Here you will outline the specific terms for employment. Areas to consider include:
- Who will supervise family members
- The minimum age requirements for employment
- The level of outside work experience required
- The handling of permanent versus temporary positions
- How performance evaluations will be administered.
This section needs to be crystal clear about the requirements for employment.
3. Other Considerations
Finally, there may be other elements you’d like to include, such as details on how the application process is handled and communicated or educational incentives and requirements. For instance, you may want to address the benefits offered for family members who obtain certain minimum educational requirements and the expectations of the organization regarding continual education to maintain employment.
With some up-front work, a family employment policy can lead to more success down the road!
Steven E. Staugaitis is a director at Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at Email.
Has your family business created a family employment policy? What has been your experience? Share in the comments.