Hiring Family Members to Work for Your Business
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Should You Hire Family Members for Your Business?
Running a family-owned business is a unique experience—one that I know firsthand through Hunt the Front. Working with family can be one of the most rewarding aspects of building a business, but it also comes with challenges that many people don’t anticipate. Over the years, we’ve had to learn how to navigate family dynamics while ensuring that our business remains professional, sustainable, and successful. If you’re considering hiring family members, here’s what you need to know to make it work.
Family-Owned Businesses Drive the Economy
Family businesses like ours play a critical role in the economy:
- 87% of businesses in the United States are family-owned.
- They employ 59% of the private sector workforce.
- They generate 54% of private sector GDP.
Family businesses tend to be more resilient during economic downturns, which has certainly been the case for us. When times are tough, there’s an extra level of commitment from family members who want to see the business survive and thrive.
Pros: Hiring Family Member
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Strong trust and loyaltyList Item 1
Family members often have an inherent level of trust that’s hard to replicate with outside employees. This can lead to a more secure and committed work environment.
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Shared vision and long-term commitmentList Item 2
Unlike traditional employees who may see the job as a stepping stone, family members are often deeply invested in the long-term success of the business. They care about the bigger picture and are more likely to make sacrifices to keep things moving forward.
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Increased business resiliency Write a description for this list item and include information that will interest site visitors. For example, you may want to describe a team member's experience, what makes a product special, or a unique service that you offer.List Item 3
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Continuity of leadership across generationsList Item 4
Many family-owned businesses are built with the goal of passing them down. Having family involved early on helps create a smoother transition when leadership changes occur. This kind of continuity can provide stability for employees, customers, and business partners.
One of the biggest benefits of working with family is knowing you’re surrounded by people who genuinely care about the business’s success. At Hunt the Front, we’ve built something bigger than just a race team—we’ve created a brand and a lifestyle that reflects who we are. That level of dedication is hard to find outside of family.
Cons: Hiring Family Member
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Personal conflicts can affect business decisionsList Item 1
When family members disagree, it’s not just a workplace issue—it can spill over into personal relationships. Disputes over responsibilities, financial decisions, or company direction can create long-term tension.
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Nepotism concerns may impact moraleList Item 2
Other employees may feel that family members receive preferential treatment, even if that’s not the case. This can lead to resentment, decreased motivation, and a loss of trust in leadership.
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Difficulty in enforcing performance standardsList Item 3
Holding family members accountable can be tricky. It’s tempting to overlook mistakes or underperformance, but doing so can hurt the business. Setting clear expectations and ensuring that every team member—family or not—is held to the same standard is essential.
While trust and loyalty are major strengths, they can also create blind spots. Early on, we learned that just because someone is family doesn’t mean they’re automatically the best fit for a role. We’ve had to make tough calls when responsibilities outgrew someone’s skill set or when work dynamics caused strain on personal relationships.
I remember one instance where we had to make a shift in responsibilities within our team. It wasn’t easy, but ultimately, it was the best decision for both the business and our family relationships. Defining clear roles and holding everyone accountable—family or not—helps prevent resentment and ensures the business continues to grow in the right direction.
Bottom line: Working with family can be incredibly rewarding, but it requires clear expectations, open communication, and a willingness to make tough but necessary decisions.
How to Keep a Family Business Professional
To make hiring family work, it’s essential to:
- Hire based on skills and qualifications, not just relationships.
- Establish clear policies with job descriptions and employment contracts.
- Hold everyone accountable to the same performance standards.
- Separate work from personal life to avoid unnecessary conflicts.
In the early days of Hunt the Front, it was easy to let business talk spill over into family gatherings. We’d be at Thanksgiving dinner discussing marketing strategies or sponsorship deals. Over time, we realized the importance of setting boundaries. Now, we try to keep business at the office (or at the track) and family time focused on being just that—family time.
Tax & Legal Considerations
Hiring family members also comes with specific tax implications:
- Children under 18 working for a parent’s sole proprietorship or partnership are exempt from Social Security, Medicare, and unemployment taxes.
- Children under 21 are exempt from unemployment taxes but must pay Social Security and Medicare taxes.
- Spouses working together in a business partnership are subject to income tax withholding and Social Security contributions but do not have to pay unemployment taxes.
- Parents employed by their child’s business are not required to pay federal unemployment taxes.
Understanding these rules is crucial to avoiding unexpected tax liabilities. If you’re running a family business, consulting with a tax professional can save you a lot of headaches down the road.
Building a Strong, Lasting Business
Hiring family members can be a great decision when done correctly. The key is to set clear expectations, ensure fairness, and understand the financial and legal implications. At Hunt the Front, we’ve worked hard to create a balance between family loyalty and professional standards, and while it’s not always easy, it’s worth the effort.
If you need help structuring your business for long-term success, now is the time to take action. Book a call today to get expert legal guidance and avoid costly mistakes. Making informed decisions now can help you build a thriving business that stands the test of time—just like we’re working to do with Hunt the Front.
Hiring family members can be a great decision when done correctly. The key is to set clear expectations, ensure fairness, and understand the financial and legal implications. At Hunt the Front, we’ve worked hard to create a balance between family loyalty and professional standards, and while it’s not always easy, it’s worth the effort.
If you need help structuring your business for long-term success, now is the time to take action. Book a call today to get expert legal guidance and avoid costly mistakes.
📞 Schedule a Business Succession Plan now and take the next step toward building a strong, resilient business that stands the test of time.
