The problem with hiring friends and family

by Astrid Wilson23 Jun 2012

The problem with hiring friends and familyThe issue of hiring friends and family is sure to divide HR practitioners. From a cost saving point of view, the benefits of slashing recruitment expenses are obvious. Yet other more insidious costs lurk just beneath the surface.

According to one renowned people-management commentator, organisations that allow familial connections to creep in are laying the foundations of a toxic work culture. “Organisations that allow nepotism to occur end up with a culture where no one really trusts each other. Fairness becomes inferior to favouritism,” James Adonis wrote in his Sydney Morning Herald blog. Adonis added that one doesn’t have to look far to see cracks in the notion. He questioned what happens when the employee most suitable for a promotion also happens to be the boss’ best friend or relative.“How can the worthy appointment be portrayed as anything but nepotism?” he questioned.

Yet not all thought leaders believe that hiring friends and family is a straight up HR no-no. Eric Herrenkohl, author of How to Hire A-Players said that in the search for top talent, A-players can come from all sorts of different sources and discounting potential talent from one’s own circle is unnecessary. Instead, the catch is ensuring the working relationship is treated the same way as any other. He said it is paramount to define roles and responsibilities before making any hiring decisions. “State, up front, how you will exit this working relationship if things don’t work out. Handled right, strong people with personal ties to you can be the foundation of a fantastic team,” Herrenkohl said.

It seems the real test is in just how transparent the hiring process is to relevant stakeholders. When HR follows a transparent hiring process to the letter, promotional decisions are less likely to be perceived as preferential treatment by the employees without a personal connection to the hiring team. What’s more, all stakeholders can be confident that the appropriate merit-based procedures were followed.

The key pros and cons


  • You may not need to do a background check
  • You have an idea of whether or not they’re lying on their resume
  • You already know if their personality and values are likely to mesh with the organisational culture
  • You have an idea of their reliability
  • Their personal references are easier to verify


  • Monetary discussions can be awkward
  • Performance issues and terminations can be infinitely harder
  • Friends and family may assume ‘special privileges’ and take advantage of your connection
  • Friends and family may unintentionally undermine your authority in front of other employees by not taking you seriously
  • Entire days can be lost agonising over feelings, emotions, and issues that otherwise would not have come into play


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  • by Angela Ciliberto 21/06/2012 3:48:37 PM

    Hold your horses here. Family Businesses make up 70% of private companies in Australia and employ 50% of the workplace. As such nepotisim is alive and well in this country. However it is important to have a set of rules around employing family - Is there a position available? Does the applicant meet the requirements? Not having family members reporting to one another etc. If you want some good information on best practice check our Family Business Australia

  • by Karla 21/06/2012 4:04:17 PM

    See article about hiring relatives...I think we both agree with most of it!

  • by Kate Connellan 21/06/2012 5:43:46 PM

    Great article - and good point James Adonis!
    We go backward and forward with this in my workplace (the waterfront) with our workforce.
    Last year I recruited 80 new starters. An analysis of our ROI showed that we got the best fitting candidates with the right skills and experience via referrals from current employees. On the flip side, when it comes to promotions, we have a rigid process which is absolutely regulated by the EBA (agreement with the union). It leaves such a minor margin for management discretion and even then it is a survey of about 10 of the managers. Despite this, our employees are absolutely convinced that nepotism plays a role.
    Obviously there are other complicating factors, but despite what we say, the perception is that nepotism plays a part, and this effects our morale and culture.
    On the flip side,

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