Skip to Main Content

Helping Family Businesses
Prosper Across Generations®

We Need a Policy for Hiring Members of 3G

Dear Advisor:

We are a second-generation family business with family members both in and out of the business.  We think we need a policy for the hiring of the next generation of family members.  Do you have any suggestions as to what we need to think about in terms of generating a policy and what it should contain? 

An employment policy is an excellent tool to ensure that family members have adequate preparation to enter the business. And it guarantees equitable treatment of members within and across generations.  Some areas that you should consider include:

  • Who will be covered by the policy – family members only or spouses as well?
  • How much experience outside the business you expect family members to have prior to entering the business (We recommend outside experience).
  • What level of education will be required to qualify for employment (We recommend the level of education required for non-family employees in the same position).
  • How family members will enter the business – at entry level, at management level, etc. (We recommend entry at the level for which they would be qualified as a non-family member).
  • How family members will be compensated (We recommend using the same pay scale as used for non-family employees).
  • Whether or not family members should report to other family members (We recommend not, if at all possible).
  • How family members’ job performance will be evaluated and who will be privy to this information (We recommend that family member’s performance be evaluated by a non-family manager, when possible, and that this information not be shared outside of the chain of command within the business).

While some general recommendations are provided above, the right answer for your business is dependent upon the nature of the business as well as the personalities and capabilities of your family members.  But getting a policy in place is a good idea, regardless of the circumstances you face.

Jennifer Pendergast




Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.

The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact

8770 W. Bryn Mawr Ave., Ste 1340W, Chicago, IL 60631
P: 773.604.5005 E: 

© 2020 The Family Business Consulting Group, Inc. All Rights Reserved.

close (X)