CWB November 2002

Hiring Friends - and Why Not

While it may sound harmless, putting friends on the payroll can have bad repercussions.

By Anthony Noel

A close buddy of yours has hit on hard times and you would like to help him out. He has no meaningful background in the woodworking industry, but based on what he has told you, he is a conscientious, hardworking guy, and you think he deserves some success. As you pick up the phone to offer your friend a position with your company, you ignore the little voice inside that is telling you this is not a good idea.

Instead, listen to that little voice. It knows what it is talking about.

While it is not impossible for friends to become valued employees, there are risk factors that point to almost certain failure in these types of arrangements. And even if none of those factors exist, there are longer-term issues, issues crucial to the success of your business, issues which need to be considered before you take that fateful step and offer your friend the job.

Let's look first at the risk factors.

You know this person as a friend only. If this is the case, it essentially means that you are seriously considering hiring a person about whose work ethic and aptitude for woodworking you know nothing, other than what he tells you.

It is actually easier - and the odds of success are better - when hiring a friend with whom you also have a business relationship, or at least some idea of "who they are" at work. Hires who come from competing firms or even allied firms (vendors, subcontractors and the like) bring with them a basic understanding of the field which friends from other disciplines usually don't possess.

Beyond this, acquaintances with some background in the field generally have a strong desire to prove themselves to you, a quality in direct opposition to the "it's-up-to-you-to-teach-me" attitude often taken by those new to woodworking.

You want to help. This risk factor is an especially potent one because it, more than most others, can handcuff even the most meticulous businessman to an employee/friend in a manner from which escape is almost impossible.

Altruism is well and good, and you may think that as long as the money is there and the hire isn't doing any actual harm, doesn't it make sense to try to help him out? But there is another way to look at it.

For one thing, couldn't the money be better spent in increases to your existing workforce? And just what is your measure for "harm?"

I know a man who had one of the finest manufacturing operations of its kind and the sales to keep it growing. But one day not long ago he fired a long-time sales representative whose product knowledge was second-to-none in favor of giving a friend the position.

Within a month of his hiring, it was clear to customers throughout the new rep's territory that he was all talk and no action. While he was very adept at nodding his head and assuring customers that he was on top of things, service issues were going unacknowledged. Customers were losing patience and the rep, rumored to be a drinking buddy of the company's CEO, seemed to have no interest in following through on any project, whatever it may have been.

Within two months of his hiring, the chorus from customers was unanimous and deafening: Get rid of this guy before his ineptness makes our relationships with our customers irreparable. And here is the punch line: Another three months went by and the once-successful company was pushed to the brink of failure before the CEO finally got up the gumption to do what he had to do to save his own company.

Now, it would be very easy for any of us to say "That's crazy! He had all the proof he needed to get rid of this guy and he should have done so a lot sooner." But I submit that it is far easier said than done.

Think about it. This CEO had built his company from scratch to the point that it was making tens of millions of dollars per year. Yet even someone with the business acumen necessary to earn that kind of success found his vision clouded when it came down to a choice between losing everything he worked for or losing a friend.

So if you are hiring a friend to help him out, it may help to remember a couple of things: (1) It is up to each of us to help ourselves, and (2) when we make an offer to a friend, we instantly make it exponentially harder to let that person go if need be, simply because we asked them to take a job instead of them asking us to give them one.

A third risk factor is continuing the friendly relationship after the business relationship has begun. It may sound cold to suggest that you have to minimize social contact with your employees, but I believe that is exactly what one must do. While it is never easy to let someone go, maintaining an arm's-length relationship with employees makes it not quite so tough if and when such action is inevitable.

Those are some of the risks. I also mentioned longer-term issues. There are many, but perhaps the most important is the effect that the hiring will have on the other people in your workforce. Your employees aren't stupid. They may not find out immediately that this person is a friend of yours, but they will find out. And when they do, you will almost be able to stand and watch the morale get sucked out of them as they wonder whether their careers will be sabotaged by this act which you thought to be so harmless.

It is not unlike the president of a company hiring his daughter upon her graduation from college. On the day that happens, every employee knows any shot they may have had at ascending to the top post is gone. And while there are differences between family businesses and the practice of hiring friends, the impact on employee morale in either case should not simply be dismissed. It will exact a price, and the only way for an owner or manager to prevent that from happening is by being just as tough - maybe tougher - on friends and relatives than they are on the rest of the workforce.

So while it may sound hard-hearted or ultra-conservative, my policy when it comes to hiring friends or relatives who lack a strong background in the industry is simple: Don't do it.

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