The answers to this question will probably come up 50/50 among many respondents. Some will be like ‘Yeah, I can totally do that’. Others would swear on their grandpa’s grave never to do that. Of course, looking at celebrity family businesses such as Cake Boss on TLC, starring Buddy Valastro Jr, his wife, sisters, sisters’ husbands and a host of extended family, and The Incredible Dr. Pol on Nat Geo Wild, starring Dr. Pol, his wife, son and other staff members, one would assume that family businesses are all fun and joy. It may or may not be the case. What are the important areas you need to know when hiring a spouse or family member?
First, Weigh in the Pros…
No need to look through piles and piles of employee resumes finding out the perfect person for the job. You know your spouse thoroughly and would have determined if he or she is truly capable for the job.
Salaries and wages still remain in the family. For your spouse to be recognized by the IRS or tax authorities remunerations must be accrued to them and they must be listed in your employee payroll book of record that they are members of your business. Payment of salaries monthly or wages weekly/bi-weekly to your spouse ensures increase in household income yearly.
Your business can still be registered as a sole proprietorship with minimal tax returns.
Your spouse could take over a division of your business like accounting and file records while you involve yourself in the nitty-gritty of your business.
Now the Cons… (Drum roll, please)
The workplace can become highly emotional. Tears can be shed. Anger and bitterness can arise in the event of being told that work is not being done as it should be. This could also cause marital problems in your home. Nobody wants that.
What if you really are content with the number of employees, yet your spouse comes to work every day for 5-10 hours? Wouldn’t you feel obligated to pay him/her? This would increase human resources cost and payroll expenses, eventually reducing anticipated profits. How do you tell your spouse to not appear at the office? That’s just plain rude.
Expectation gap will prevail in the work environment (What you expect your spouse to do versus what they do). On the other hand, this could result in increased work efficiency and effectiveness.
Ooh…our favorite drama causing subject of all time. Good old Nepotism. When your spouse performs well in the office and is complimented and probably awarded, other employees might bear grudges and feel it is because of, you guessed it, your deep relation to your spouse.
Once you have weighed in these pros and cons, you can decide on whether to hire your spouse or not. Do let us know if you do!