Career Advice - A Community Blog

Erik Larson writes about the job market, resume improvement, and career advice

Five Best Practices to Remember when Employing for a Family-Owned Business

Written by Erik Larson, Community Blogger | Jan 23, 2018 12:51 AM

A family-owned business comes with its own package of pluses and minuses. On the one hand, the workforce usually comprises people who are comfortable with each other, and perhaps have grown together as professionals. They often know each others' strengths and weaknesses, and are therefore able to counter or cover up for a team member's weakness. But there are dangers too. Either there is too much conflict or none at all. People tend to get comfortable and under-perform. Above all, there is often a feeling of 'family'.

As the business grows and you need to hire a larger workforce, many factors come into play. Use the five practices mentioned below to help steer your course wisely.

Hire Someone because they will Grow your Business, not because they Feel like Family

Perhaps you started your family business with a wife, sibling or offspring. When you hire, however, remember one golden rule. This is a business, so do not hire someone who feels like another member of the family. Look for skills, experience and aptitude that you and your current team lack, and hire accordingly. Look for differences that will complement existing skill-sets, even if you feel it might cause some conflict. Remember, healthy conflict is good for business.

Offer a Clear Career Path

People, especially youngsters, are often wary of interviewing with family-owned businesses as they are unsure of where it will lead them career-wise. Whatever the position you are hiring for, offer a clear growth path. Take your prospective employee through his road map for the next couple of years, outlining the potential for upward mobility and industry parity. At all times, make a genuine effort to ensure that people joining your work-force will not stagnate professionally.

Chris Greenwood, having managed a family business for 12 years, feels it is important to promote the value of a well managed family business as a viable employer. Rarely are you just a cog in the proverbial wheel. Every role is critical to the successful operation of the business, and employees are often provided the opportunity to assume a broader spectrum of responsibility. For this very reason, it is essential that there be clear accountability for the coaching and development of every employee. Effective management of each employee will reduce turnover and create a stronger organization.

Employ to Fill the Current Need

While long-term planning is necessary, it is often smart not to plan for too long. Small and family-owned businesses are not high up on the career goals of many professionals, and it is realistic to expect that several of the people you employ are likely to move on to larger organizations. Go ahead and sign on that high-performing person who can fill your current need efficiently, even if it is clear that she is not likely to stay for long. If possible, hire a junior who can work under her supervision and can step into her shoes later.

Bring in an Outsider for a Senior Post

Most family-owned businesses tend to be closely held, especially in key areas like business development and finance. This often tends to stifle growth and innovation. Take the risk of bringing in someone from outside for a key senior post, ideally someone with a background in larger organizations and looking to take up the challenge of catapulting a small business. You might find it also brings in fresh perspectives and ideas, opening up a whole new world of possibilities.

Hire Only if you Must: Try a Freelance or Retainer Arrangement

It often happens in smaller family-owned businesses that there is a lot of work in some months and hardly any work in others. The lean periods hit hardest when it comes to payout; salaries have to be paid whether the company makes money or not. In such situations, try not to take on the commitment of a full-time employee. Instead, see if you can work out a freelance or retainer arrangement, where your financial commitment is only for the busy periods and on the basis of specific tasks executed. 

Chris Greenwood of Ottawa, advises family business owners to establish a budget for seasonal work. From experience, it is most often better to invest in highly skilled contractors than in mediocre, lower paid salaried employees. The key is to cultivate long-term relationships with contractors who get to know your business and culture, allowing them to be more effective for you.  

Whether your family-owned business is just a fledgling starting out or an established name to reckon with, following the best practices outlined above will enhance the professionalism of your organization.

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