As an owner or manager, maybe you want to help a young family member start their career. You might even simply like the idea of working with someone you already know. Whatever the reason, the decision to employ a friend or family member should be considered carefully, with a full understanding of possible consequences.While it isn’t always unethical to hire friends and family members, employing or promoting them over other, more qualified candidates is favoritism and can damage your organization. You could lose the trust of your employees, undermine your company’s reputation and even encourage misconduct.
Your employees want to believe that they can get ahead, and that hard work will be rewarded. If your employees see beneficiaries of nepotism being promoted or gaining other benefits without putting in hard work, they won’t bother giving their best effort or worse, they’ll just decide to leave.
Turnover will rise because your team will see that hard work and going the extra mile won’t get them anywhere potentially. Your employees might view your company as unethical or a dead end and move to an organization where they feel more valued.
Losing great employees isn’t the only cost of turnover. The time and money you have to spend on recruiting, interviewing and training new employees is tremendous. If you gain a reputation for nepotism in the workplace, you will very likely drive away some potential new hires.
Is nepotism a crime in itself? Absolutely not. But depending upon the nature of it, you might open yourself up to discrimination lawsuits. Family members often share ethnic backgrounds and religions, so hiring or promoting only family members can be viewed as indirect discrimination.
Be absolutely sure that you can prove that you hired a family member on their merits and that you didn’t discriminate against an employee or candidate based on a protected class as defined by the EEOC.
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