5 thing every family business should do – part 2
Category : Practice Updates
by David Harland CPA
Running a family firm can be grinding. Sometimes it is too easy to get caught up working in the business instead of on the business.
A new fiscal year presents family business owners with an annual opportunity to take time to sit with key stakeholders and think about the issues surrounding their business.
Over the next five weeks we will discuss the issues you may like to consider in your business.
Part 2 – Clarify hiring and promotion practices
Family businesses approach hiring in different ways. Some believe that the business is there to serve the family and have an open door for children and relatives who want to work within the firm. Others treat family like any other prospective employee.
In our work as family business advisors we have seen many situations in which unqualified managers contributed to family business failures. It’s also not uncommon for family dynamics to affect hiring and promotion.
Take the time to speak with a trusted advisor about your current asset protection and ownership strategies.
For the sake of the business, we strongly recommend professionalising your human resources policies by clearly defining work roles and setting expectations for promotion.
One of the main sources of friction between family and non-family employees is compensation. If your firm pays or promotes family members unfairly, you may have trouble attracting and retaining qualified employees. Take a look at your current compensation structure and make sure that you are paying and promoting fairly.
Source: CPA Australia