How to deal with relatives working for your company

A boss talking to his employees.
A boss talking to his employees. FILE PHOTO | NMG 

On the sidelines of a meeting Josephine called me aside and told me, “I have a serious problem that is giving sleepless night. My business is doing well but I have an employee I am unable to manage or sack.”

I got more interested and signalled her we move further to avoid interruption.

She narrated how when she started a business five years ago, she hired a relative from the husband’s side. She conceded that the young man was instrumental for her business growth. He stood with her and persevered many startup business challenges without complaining. They both worked hard for many hours with low pay until the business started making money.

“The problem is now he has totally changed. He behaves as if he is indispensable and rightfully owns part of the business. He abuses other employees, make decisions without consulting me and when I question he treats me with contempt. This is threatening both my business and family given that he is my in-law. My husband feels he is right and I am wrong on many instances.”

Well, such issues are common when working with relatives. It is both rewarding but potentially lethal if not handled well.


As a business owner you need to understand what you are getting into if you allow family members to be part of your business by working for you or contributing capital.

Relatives can be very good for your business because you know them well prior to engaging them unlike other employees who, probably your first interaction is through interview.

Your relatives also can easily understand your vision, challenges and give all their support without looking at short term gains.

However, on the other hand, if relatives turn out to be bad, they go to the extreme and punishing or sacking them has other consequences at the family level.

An employee who is related to you may fail to cope with you or other employees because they assume they are special. They may expect better salaries and more say notwithstanding their position and qualification.

If they are perceived by other employees as special and untouchables, it brings resentment to you the business in general.

On your side also it can be hard draw a line to separate business and family issues when making important decision. You may be tempted to make some bad decision such as paying your relatives low or denying them promotion, thus exploiting.

If you chose to employ your relatives or get financial boost from them, it is important to establish a good business relationship with rules and expectations that are clear to every party.

Write a job description and spell out what they will get as a result of supporting your business.

Right from the start treat your relatives like you would any other employee. Be fair to all and never take advantage or expect free things that would cost them and profit you.