Pros and Cons of Nepotism

Pros and Cons of Nepotism

Since you’re a pro in the retail sector, you’re probably familiar with the terms “cronyism” and “nepotism.” Cronyism “is the practice of partiality in awarding jobs and other advantages to friends or trusted colleagues.” We see this most often in politics. Nepotism is the close cousin to cronyism, referring specifically to favoring family members in business hiring practice. Today we’ll be covering the pros and cons of nepotism specifically. We thought this would be a good topic to cover as the holiday hiring rush starts to kick into high gear, as it’s also a time when retail nepotism can take hold of businesses. So is nepotism good or bad? The answer is complicated. Here, we’ll talk about some pros and cons of nepotism to keep in mind if you’re considering hiring a family member.

The history of nepotism is actually quite fascinating, and it goes way back. The term stems from the Italian word for “nephew,” which is “nepote.” According to Vocabulary.com, “in the 17th century a lot of people tended to promote their nephews to powerful positions at the expense of other candidates.” Today, nepotism—or the hiring of family members—is frequently banned from larger companies. However, one place where it’s still alive and well is in the small business sector. Family-run businesses are a staple of the American economy, creating 62 percent of U.S employment and producing 78 percent of new job creation according to the Conway Center for Family Business. It’s for these reasons that nepotism can be good for business. Additionally, hiring qualified family members is what keeps these establishments alive. Children choose to follow in their parents’ footsteps and go into the family business, thus launching their own careers. On another positive note, family members generally come with the added benefit of having the business knowledge necessary to bringing success to your company. Nepotism also promotes a smooth transition of power should you ever dream of retirement. If you’re in a bind and need to hire staff quickly before a seasonal rush, don’t write off bringing on your relatives to train staff, man the register, or work on payroll.

When, then, is nepotism bad? In the worst situations, managers will hire their less-than-enthusiastic family members to perform a job they are simply terrible at. Or a relative might get a promotion over a more-qualified candidate just because they’re the boss’s kin. While this happens a lot in small businesses, sometimes it is just the perception employees have of nepotism. Psychology Today reports “People tend to believe that there is favoritism whenever a relative is hired, regardless of whether they tolerate nepotism or not. Even when a relative is the most qualified person for the job, coworkers tend to believe that it was their family relationship, rather than their qualifications, that got the person the job.”

Nepotism can result in the appearance—warranted or not—of a “fairness void” in the workplace. This lack of fairness stems from our belief that if we work hard, we will ultimately come out on top. Hiring a relative seems to fly in the face of that. Nepotism can also lower morale and productivity, with disgruntled employees losing their motivation and willpower if a nephew or sister is brought on. It creates the appearance your workplace promotes inequality and that perks will only be given to those related to the boss.

See? We warned you the answer to whether nepotism is good or bad was very complex! Know what you’re doing with your hiring practices this holiday season, weigh your pros and cons, and at the end of the day, just hire the right people for the job—family member or not. And if you’re on the fence about bringing your not-so-qualified brother on-board at your company, think about what Christmas dinner will be like if you have to fire him before the new year.