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How to Hire Family Members

About 80 percent of the world's businesses are family owned, and 60 percent of all public companies in the USA. But only about 13 percent are passed onto the third generation.

What is the best way to bring a relative into the business successfully and smoothly, without running an entitlement program? Here are some guidelines compiled by Carolyn M. Brown for Inc. magazine:

  • Draft a Family Employee Policy. The policy should spell out what to expect when hiring family members, regardless if they are coming into an entry position or at the executive level.
  • Define Roles and Responsibilities. Create written job descriptions with defined roles, rules for compensation, performance reviews, long-term and short-term goals or objectives, so that decisions are not based on family relationships.
  • Groom the Next Generation. This may include summer internships, mentoring programs, or working outside of the family business at another company in the same industry.
  • Don't Rely on Post-Graduate Education. Be aware that traditional post-graduate degree programs, such as an MBA, provide a broad education, but the needs of your business are narrow and unique.
  • Avoid the Sense of Favoritism or Nepotism. Consider using using your board of directors or an outside consultant to provide objectivity.
  • Focus on the Business, Not the Family. Research shows that business-focused family businesses tend to create more generational fortunes, with enough wealth created to take care of family members for years to come.

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