The Healthy Way to Hire the Kids

Posted on October 6th, 2023 in General Business

Older women dressed in a beige blazer, showing a younger female how to sew. Younger female is sitting at white desk with sewing equipment.

Most businesses have accounting, computer, and vacation policies. Why do so few have family employment policies?

Making decisions about hiring younger relatives can be difficult. Skills and talents may vary widely, or maybe there’s not a job for everyone.  And sometimes a family member just doesn’t work out as an employee.

Hiring the kids requires a lot of thought, and the time to do the thinking is before the next generation comes of age. Employment in a family business is not an entitlement; business needs and individual abilities must determine hiring decisions.  

When creating family employment policies, consider:

Experimentation:  Summer jobs can be a great way for kids to “try out” the family business and vice versa. Create a summer job policy outlining the type of work kids are expected to perform, along with personal learning goals.

Education:  Is a college degree required to work at the company?  Perhaps a graduate degree in a certain specialty?  If so, detail the company’s expectations before hiring family members.

Situation:   In what position will the children start?  Will they rotate through jobs in a training program?  Should they work outside the family business first?  Address these questions in writing.

Compensation:   Family members should be paid based on fair market value for their job responsibilities.  Detailing salary and bonus formulas will help to ensure that everyone is treated fairly.

Performance:   All employees, including family members, deserve regular performance reviews. Spell out review schedules and adhere to them.

Separation:   It’s imperative to consider a separation protocol for family members. Indicate performance requirements for continued employment, and include specific behaviors or actions that will not be tolerated.  Also, specify severance package details.

Human resources issues are complicated.  Having formal family employment policies in place can alleviate at least some of the emotion and angst inherited in mixing family and business.


Article adapted by  Paul G. Stringer, CPA, CA, FEA,  Retired Partner from the BOP Fall 2008 article – purchased by DJB for use.

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