Matters Column

Tread lightly when employing friends and family

August 18, 2017
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There are three words that make people feel all warm and secure: love, friends and family. Those are beautiful words, but they can raise havoc on your business.

I was never really an auditor because my personality does not lend itself to looking for other people’s errors. A true auditor was described to me as the person brought in after the battle to bayonet the wounded.

That being said, there are situations where love, friendship and family emotions are not compatible to a business atmosphere. When you are building your business, it is natural to want to employ people you know and trust. Look at the current White House. Whether you like the president or not, he has surrounded himself with family and long-term associates, aka friends.

Love, friendship, family are positive emotions. Let's look at some negative emotions.

Jealousy and envy are destructive emotions. Jay Van Andel and Rich DeVos pulled off one of the all-time great friendship successes stories. Founders Brewing Co. owners Dave Engbers and Mike Stevens are another remarkable story — high school buddies who made it big. Inspiring. Somehow, they avoided the ravages of internal competitiveness and the petty grievances. More likely is that they had them but were mature enough to get past it. That often is not the case.

Jealousy and envy toward friends and family working in your business is an issue, especially if they get special privileges. Leaving early, cars, trips, etc. can cause other employees to respond negatively. Even if all employees are treated equally, certain types of employees may point out imagined or false favoritism.

What if you have to discipline or fire a family member or friend? You may solve the work problem but ruin Thanksgiving. Could you fire your brother, child or best man from your wedding? If you employ those people, the potential is there. It is a damned if you do, damned if you don't situation.

Dishonesty is an experience you will deal with if you are in business for any length of time. Employees, landlords, vendors, etc. are in most incidences fair and honest people. I recently saw a statistic that 1 in 100 people are psychopaths. I am sure that the percentage is much higher for simple dishonesty. It can be almost enjoyable to fire a person who has stolen from you. But what if it's your sister? Over my 45 years in public accounting, I have seen mothers, fathers, spouses, children, siblings and best friends steal from business owners. The only lifeform I haven't seen steal is aliens. Maybe I have but did not know it.

We all want to help friends and relatives who are struggling. One of the bitterest experiences I have observed is when business owners gave a job to a friend out of work only to have that person steal from them. The worst I saw was a man who hired the son of a war buddy because the kid was having trouble holding a job. The kid sold his customer list, including contact information, pricing and other critical data, to a competitor. A good solid business was destroyed in six months. That was a long time ago and all those involved are deceased. Due to the possibility someone might recognize other situations, I choose to not use them as examples. I could literally write a book on it.

I think I can sum up office romances in the words of Jim Croce, the singer-songwriter from the ’70s, with a small change: “You don’t tug on Superman’s cape, you don't spit into the wind, you don't pull the mask off that old Lone Ranger and you don't mess around with people you work with.” Enough said.

I am not saying you should not employ friends and relatives. It can be the source of great pride and satisfaction to build a successful business with people close to you. In order to accomplish that, you have to be objective about the people you hire. A relative who has problems with work is not a good candidate for your enterprise. Whatever problems they had somewhere else, they will bring to their job with you.

Many of the people who made bad hiring decisions did so because of pressure from family or friends. If mom says you have to hire your cousin because he just got out of jail due to a DUI, say no — especially if you have a trucking company. Your primary purpose in business is to provide good jobs for good people. Bad people should never be hired regardless of their status in other areas of your life. A horrendous thought. What if you had to fire your conjoined twin? Talk about having a hard time separating your personal life from your business life.  

Objectivity is essential to business. There are times in life when being objective can be very difficult. A team spirit requires fairness and equity in order to maintain efficiency. No matter how you feel about the situation, if you are going to hire family and friends, you have to be strong enough to make tough decisions. That is why you are the boss.

Paul Hense is the retired president of local accounting firm Hense & Associates and past chairman of the Small Business Association of Michigan.

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