Family Business Avoid the Pitfalls

Your daughter announces that she, her husband John, and two children are moving back to your hometown to be closer to the family. “By the way, Mom,” she asks, “do you think Dad will give John a job at his insurance agency?” How can you say no?

Your wife bails you out when the bookkeeper suddenly resigns. Even with limited accounting knowledge, she easily uncovers billing errors, company statement mistakes, and posting inconsistencies. So when she volunteers to continue do that work in the evening for the agency, how can you say no?

You thought your dad was going to retire. The buyout is almost complete. He tells you he doesn’t know what he’ll do with himself if he doesn’t come into the office regularly. He offers to do the small tasks no one wants to do, take property pictures, go to the bank, handle the building maintenance odds and ends. How can you say no?

Truth is, you can say no, you just don’t want to. It’s family. Even though you know family members in the business can often cause trouble. So what can you do to avoid the pitfalls of employing family members?

Apply consistent employment practices. How do you dodge hiring a family member that is not well-suited to your business? Or if the person is already on board, how can you avoid performance issues? As with any new hire or valued employee, use tools such as a job description and personnel manual that clearly explain job expectations, office conduct, and accountabilities. Set up a job training schedule employing the assistance of coworkers and carriers. Utilize personality profiling and aptitude services to uncover issues that may affect job effectiveness. These resources are great management and employee development tools, family or not – and can help you handle uncomfortable situations by having an expert party or substantiation to defer to.

Clearly explain exact job duties. Even something as simple as taking pictures for insurance company underwriting requirements requires a procedure. What’s the expected turnaround time? What picture views are required by each company? Who’s responsible for downloading the pictures, attaching the picture to the client file, and letting the CSR or Producer know it’s done? When these details are not clearly outlined, frustration builds and productivity and attitudes are affected.

Everyone should follow established rules. Generally, family businesses are family friendly. Children are in the office when necessary; child care issues, doctor appointment coordination, and so on. Over time, the children of family members may take liberties that when left unchecked, become real problems. For example, family children in the office may not be a challenge when a young child sleeps or plays quietly bothering no one. A few years later, that same child is now tying up phone lines, downloading games from the Internet, and disrupting employees working in their offices. Workers may not feel comfortable addressing this situation with the owner and the situation compromises business professionalism.

Here’s another situation. An agency has a company policy that all visitors are to be announced and greeted in the reception area. Family members may think that rule doesn’t apply to them so their guests come and go. Employees may think it’s unfair to have a guideline in force that only applies to them, not family members.

Family members who take liberties with hours worked, office attire, personal phone calls, accounting guidelines and other business protocol not only lose credibility with coworkers, set a poor example that is modeled by non-family members. It’s critical that family members follow the same guidelines as every associate and be positive role models.

Recognize the perspective of non-family members. Right or wrong, non-family employees perceive and believe that family members share information with the owner. In many agencies, a family member handles the human resource function including payroll and benefits. Employees may find this person unapproachable, wondering if a conversation will be kept confidential or what impact certain private information will have on his or her job. Think twice about having family members handle personnel issues. If there is no other choice, recognize the situation employees are in.

Non-family members rarely advise the owner of jobs incorrectly done or the inappropriate behavior of family members. Owners often lament, “Why didn’t anyone tell me about that problem?” Easy answer; it’s your family and no one is talking (at least to the owner) about it.

Don’t allow employees to play one family member off another. “But I talked to your wife (or son, daughter, father) about …” is often used by employees to get what they want in a situation. All family members need to understand the limits and boundaries that exist in their job position. When a family member is approached about a matter that falls outside his or her responsibilities, refer the employee to the appropriate person.

While every family-owned agency situation is unique, they have one thing in common; at the end of the day, employees are not tied to the owners in any other way other than the business relationship. Family members are part of your lives forever. Recognizing, acknowledging and addressing the issues up front with all the parties involved will support an emotionally healthy and professional business environment.

Emily Huling Selling Strategies, Inc. P.O. Box 200 Terrell, NC 28682
Phone: 888-309-8802 Fax: 888-309-7355