One decision that employers may face at some point is whether or not to hire friends and family. Because these people are so accessible, it can be very tempting especially for a small, tight-knit business. But before you decide to go this route, it’s important to look at the big picture and examine the pros and cons.

The Dangers of Nepotism

Nepotism is defined by the Business Dictionary as “the practice of appointing relatives and friends in one’s organization to positions for which outsiders might be better qualified.” This practice often has negative connotations because of the negative consequences it can have on a workplace. First, if friends or relatives are underqualified, they’re unlikely to possess the skill set and expertise needed to adequately perform their job. There can also be resentment from other employees who aren’t friends or family members, and your leadership may be questioned. When you add all of this up, it can lead to a loss in productivity.

Second, it can be disruptive to your workforce, because other employees may become disgruntled at the perceived favoritism. Even if you treat everyone exactly the same, it’s often a natural human inclination for workers outside your inner circle to become disillusioned. In turn, this can increase your turnover rate, lead to lower employee morale and create a rift within your company.

The Positives of Hiring Friends and Family

On the flip side, this type of hiring does have some inherent advantages that should be noted. Perhaps the biggest benefit is that you have a good idea of what you’re getting by hiring someone you’re close to. For example, you know about their credentials, personality, work ethic, etc.

This means there’s probably no need to perform a background check, and you can easily spot any false information on their resume. You’ll also know about any weaknesses they may have, which can help you decide which tasks to assign them. In the long run, this can prevent a lot of drama, because there shouldn’t be any big surprises.

Another advantage is the loyalty that you tend to get by hiring friends and relatives. Because you already have a strong relationship with these individuals, there’s an inherent level of trust, and you know that they’ll have your best interests in mind. In many cases, this can be a big asset to a company, because they’ll usually do whatever it takes to help your business succeed.

When you break everything down to its core, making the decision to hire friends and family can be a great move—under the right circumstances. However, at other times, it can be a major detriment. You need to examine your company’s unique situation and culture, in addition to the pros and cons to decide whether this would be a smart move.

For further advice on hiring and other employment decision, please check out our Management Tips.

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