The study by specialist SME insurer Hiscox found that, when asked about the main advantages of employing family members, over half said it came down to trust, followed by reliability , relevant experience and simply knowing that their family members “will work hard” . Surprisingly only 16% said they chose to employ a relative to actively create a recognised family brand.
Nearly a third of family run businesses chose to employ a relative to help them find work and just over one in ten said it was to help those who had been made redundant.
“The silver lining of the tough financial climate has been the discovery of the ‘family talent pool’. The trend of SMEs turning to trusted family members who may be available and have the right experience has strengthened their businesses,” comments John Heaney, SME insurance expert at Hiscox, who commissioned the survey.
While the research reveals the benefits of employing family members, it also acknowledges the risks. Almost half of SME owners believe there is a danger associated with keeping home life and work life separate when becoming your nearest and dearest’s boss and a quarter thought it would bring family politics into the business.
“Understanding the risks to your business means that you can put strategies in place to ensure they don’t become a problem. For example, think about succession planning and set out a long term strategy so all employees within your company are clear on their role and expectations for the future,” comments John Heaney.
Brothers with the edge
Oliver Bolland recently set up Jool Edge, a design and marketing consultancy, with his brother Josh in the hope that one day, their company will be able to support the rest of their family. Bolland explains, “My brother and I realised that by combining our design and web programming skills, we had the knowledge and experience to set up Jool Edge. It felt like a natural progression for us to work together – Josh and I know each other’s strengths and weaknesses, we can be honest with each other and we can really trust each other to make this business work, as ultimately we want our whole family to benefit from its success.”
Grant Gordon, Director General of the Institute for Family Business, said: “Family firms are a proven breeding ground for entrepreneurship and working in a family business encourages greater resourcefulness as well as teaching family members valuable lessons.”
“Overall the family business sector has weathered the recession well and fostering a spirit of entrepreneurship in family members should ensure these firms remain competitive as we emerge from the downturn.”