Nepotism in business

Last week it was revealed that the son of former Metropolitan Police commissioner Ian Blair had completed work experience at The Sun.

The news was met with consternation but little surprise, with many suggesting that it highlighted the unsustainable closeness of the police and the press.

But aside from the potential implications for press reform, the revelation raised interesting questions about the role of nepotism in society. To most observers it would appear that Blair’s son secured his work experience placement because of his father’s connections – or, at the very least, it would seem that Blair’s links helped. The news gained traction because of Blair’s position - but nepotism of this sort remains rampant in businesses across the UK.

What is nepotism?

Nepotism is the favouring of family or friends, generally over those who are better suited to or qualified for a task. In business this can take many forms. Internships and work experience placements, for example, are often thought of as hives for nepotism, with stories abounding of preferential treatment extended to friends or relatives of company heads.

This pattern reportedly continues all the way up the career ladder. It is common to hear reports of well-qualified individuals being passed over for promotion, in favour of those with fewer relevant skills but better connections.

The UK tends to have an ambivalent relationship with nepotism. Our initial reaction tends to be critical: “Why should the old boys’ network help them get that job?” At the same time, though, nepotism remains rife in British society. The top tiers of management in many of the country’s most successful businesses are often drawn from relatively small networks – and these networks are often founded not on skill but on social background.

What about family business?

Some people would suggest that the family business is the perfect example of the nepotistic organisation – one in which the reins will always be handed on to someone in the same family.

Yet family businesses remain popular and successful in the UK. A significant proportion of entrepreneurs want to hand their business on to their children or other relatives, and this seems to be culturally acceptable.

It is important to understand, though, that nepotism can still be a risk in family businesses. Even when there is an expectation that the firm will be handed on to a family member, it is vital that the process is managed in a sensitive manner. Any sense that a relative has been ‘parachuted’ in, with little knowledge of the organisation and ahead of a better-qualified alternative, is likely to cause problems for staff morale.

In organisations without an obvious family tie, nepotism should be avoided – but you should adopt a nuanced approach. While it is important not to favour individuals for no reason other than their surname, you should also be careful not to veer too far in the other direction. Opportunities should be given to the best candidate – and just as you should not favour someone because of their family connection, neither should you overlook them.

Good recruitment practices are important if you are to avoid the nepotism trap. If your business is beginning to expand, read more about taking on your first employee.

What should I expect?

If the government intends to adopt the exemptions, it seems likely that they announce their plans in the forthcoming Budget, due next month. It is expected that new rules will allow micro businesses to submit a simplified annual return. In addition, the current requirement for a profit and loss account would be replaced with a requirement for a more concise Trading Statement. In addition, micro businesses may be required to submit a Statement of Position, detailing things like assets, cash, loans, and creditors.

You should remember, however, that the directive has not yet been adopted - and you must therefore continue to keep your accounts and submit your returns as normal.

Check back soon for more coverage of the forthcoming Budget announcement.

Have you experienced nepotism in business? Have you hired a relative? Let us know in the comments.