Hiring relatives has its pros and cons.

One of the pros of hiring a referred relative is that the employer would know whom they are hiring. The employer can expect to have a reliable reference through the employee.

It can also help retain an employee if we hire their recommended family members. It helps motivate the employee. When an employee recommends a family member, they think the employer would be a good fit. It is likely they said good things about the employer to their relatives. They would also like to be able to help the relative get hired.

When as an HR we get such requests, it is often associated with an expectation that we would treat this candidate favorably than others. And that is the challenge. The favorable treatment is the problem.

The family member may not have the right skill sets or qualifications to do the job. Because they are family doesn’t always mean they are a good fit for the job.

Other employees will notice if you hire an unqualified family member. They might perceive that family members are receiving special treatment or favoritism. They can also think they don’t have as many opportunities as this family member. In small businesses family members often work together. Employees might treat referred family members unkindly. Some non-family employees can see family members as roadblocks to their advancement.

As an HR consider all your options. Interview all candidates, including family, then choose the best person for the job. You definitely don’t want to hire anyone if they’re unqualified for a job.

You may find it awkward to deliver that feedback to the referring employee. You may fear that you will offend them. But it is important to give feedback to the employee who has referred their relatives. If they understand the reason for rejection and see fairness in the process, they are likely to agree with the decision. Also, ensure to give feedback to the candidate as well. 

You may find a company policy and guidelines can help set the expectations right. Clearly written policies can help demonstrate that all employees are rewarded fairly and equally.

It is not necessary that hiring a relative is a bad idea. Hiring family members can fill staffing requirements. In the case of a family business, preparing a family member to carry on a business is a legitimate enterprise for the owner.

Consider these few things for your policies and guidelines. State the purpose of why you need the policy. It can be a part of your conflict of interest policy as well. It is important to promote positive employee relations and engagement. Employees need to believe that those managing their work unit are fair. They need to see that decisions are made in the best interests of the business. And not the best family or personal interests of the manager.

The policy should not prohibit the hiring of relatives. The purpose is to prevent nepotism. It should establish that relatives cannot be employed in certain situations. Relatives cannot report, to another relative, or where they would supervise a relative.

Family members of existing employees may apply for employment within the company. Managers, referring a relative, must avoid any actions that might influence decisions to hire, promote or select a relative. Certain positions and functions in the organizations are restricted from referring a relative due to unavoidable conflict of interest. If you are an HR person in the organization and one of your family members is hired, it would be difficult to establish that there is no conflict of interest. 

The policy should also recognize the relatives who are were already employed. The policy should address how the employer will handle those existing family members’ situations. It is advisable to establish the policy on a go-forward basis.

Besides these, as an HR please also check the rules around Employment Insurance for hiring a family member in Canada. For employees related to their employer, it may not be considered as insurable employment.

If you need help with your policies and processes, please contact us for a free consultation.