Businesses keep it in the family - Business - News - Moneyfacts


Businesses keep it in the family

Businesses keep it in the family

Category: Business

Updated: 06/04/2011
First Published: 05/04/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The economic downturn has seen a number of small businesses turn to family members to boost their workforce, new figures have revealed.

Research conducted by Hiscox has found that more than a fifth of small and medium sized enterprises (SMEs) have recruited a family member to help their business, with 43% of them citing the economic pressures as the main reason for doing so.

The overwhelming majority (94%) said the move has been positive for the business. A number of advantages were cited when it comes to employing a family member.

Over half of those that have done so (57%) said it came down to trust, followed by reliability (45%), relevant experience (40%) and simply knowing that their family members 'will work hard' (44%).

Surprisingly only 16% said they chose to employ a relative to actively create a recognised family brand.

Nearly a third (30%) of family-run businesses chose to employ a relative to help them find work and just over one in ten (11%) said it was to help those who had been made redundant.

"The silver lining of the tough financial climate has been the discovery of the family talent pool," commented John Heaney, SME insurance expert at Hiscox.

"The trend of SMEs turning to trusted family members who may be available and have the right experience has strengthened their businesses."

While the research found many benefits to ushering family into a business, it also found there to be risks as well.

Almost half (43%) of SME owners believe there is a danger associated with keeping home life and work life separate when becoming your nearest and dearest's boss and a quarter (25%) thought it would bring family politics into the business.

"Understanding the risks to your business means that you can put strategies in place to ensure they don't become a problem," said Mr Heaney.

"For example, think about succession planning and set out a long term strategy so all employees within your company are clear on their role and expectations for the future."

For a selection of other business accounts, including products from Santander, Barclays and Lloyds, check the Best Buy tables.

Looking for the right Business account? Compare Business accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Business owners – do you have a cash buffer?

Building up a cash buffer can be a vital part of business management, particularly in uncertain times. It’s therefore little surprise to find that SMEs built up significant cash reserves in the lead up to the referendum.

Business owners – are you missing out on returns?

Running a successful company demands strong organisational skills, business acumen and a keen eye for finances, which is why it’s so surprising that many business owners could be missing out on returns because they don’t know their interest rate.

2016 Business Moneyfacts Awards winners announced

The winners of the 2016 Business Moneyfacts Awards were announced last night at the prestigious Lancaster London Hotel.