"My cousin's looking for a job."

Terrifying words? Not to me. While most employers dread the idea of hiring someone's relative, I've had (mostly) good experiences with nepotism. So when my niece told me her cousin was moving to my city, and she knew I had a job opening, I said, "Sure, I'll interview him."

Don't get me wrong - hiring relatives is tricky. Family spats can easily carry over to the workplace. Other employees may feel that a boss's relative gets special treatment, and a host of unanticipated problems can crop up. As a result, most companies adopt policies against hiring more than one member of a family.

But there's another side: great employees often have great relatives. Sticking to a strict rule that you'll never hire someone's relative may keep you from getting the best employee out there. After all, if you have an employee with outstanding work habits and intelligence, why wouldn't you want to hire her brother with the same qualities?

Of course, you have to use good judgment when hiring relatives, just as with any hiring decision. In fact, I tend to apply higher standards when dealing with family members, especially my own. Here are a few other things to keep in mind:

  • Don't hire someone's relative just because they "need" a job. You're running a business, not a social service agency. More importantly, there's a good chance your brother-in-law, Sheldon, "needs" a job because he's not very good at holding one down. Better to stare your sister in the face now and say, "Sheldon doesn't have the qualifications we need" then to have a big family blow-up when you later have to fire Sheldon.
  • Ask specific, detailed questions about the relative's qualifications before you agree to interview them. People rarely see their own relatives clearly, especially their children. They're likely to make comments such as "He's a wonderful guy" or "She's so smart." That doesn't tell you if they've had relevant work experience or training. And leave yourself an out: "I'm not sure Chris has the right computer skills we need."
  • Don't have relatives report to one another or work too closely together. It's one thing to have siblings work for the same company in different areas, but if they work together on the same project, you're likely to see old family patterns emerge. If something goes wrong, don't be surprised if you hear: "He started it." "No, she started it."
  • Watch out when hiring spouses! I've been fortunate - I hired the husband of one of my best employees, and he turned out great. But spouses or domestic partners working together can present a number of difficulties. There are logistical issues: vacations or family emergencies may leave you doubly short-handed. And behaviorial issues: a terrific, eager worker may suddenly change dramatically with a spouse around. The dynamics of a couple's relationship is stronger - and usually less comprehensible - than a boss/employee relationship. Moreover, in a small, new, or very risky company, having both bread-winners work for the same company puts a lot of stress on a family and their budget. That's a lot of extra stress on you.
  • Be really careful about working with your own spouse. I know of a few businesses where husband and wife successfully work side-by-side all day. But I've had a number of clients where either the business or the relationship (or both) ends up on the rocks. Tread carefully!
  • Be toughest on your own close relatives. I'm old-fashioned enough to think it's good for the boss's kid (or niece, nephew) to have to work their way up, and it's good for other employees to know that the boss's brother doesn't get a free ride. Before you hire a relative, make it clear to them that they're going to prove themselves and will be held to the highest standards. And I have a firm rule: I never supervise one of my relatives directly.

No matter what, never ever play favorites. Make the rules apply to all: employees have to be qualified and they have to do their jobs well. Otherwise, they're not hired or they get fired. Even your mother.

Copyright © 2001 Rhonda Abrams

Rhonda Abrams writes the nation's most widely-read small business column and is the author of The Successful Business Plan: Secrets and Strategies and Wear Clean Underwear: Business Wisdom from Mom. For free business tips from Rhonda, register at www.RhondaOnline.com or write her at 555 Bryant St, number 180, Palo Alto, CA 94301.