07/04/2011
When it comes to recruitment, small and medium businesses are far more likely to employ relatives, reports PR Newswire.
New research carried out by a UK insurance company found that 21 per cent of SMEs employ a family member. 94 per cent said that a family hire brought benefits to the business.
1,000 SMEs participated in the comprehensive survey and results revealed a variety of reasons for employing a relatives. The most common reason was trust, at 57 per cent followed by reliability at 44 per cent and relevant experience at 40 per cent.
Almost half of the businesses asked attributed the hire simply to the certainty that a relative would work hard.
Some employers admitted to employing relatives to create and cement a recognised family brand and others did so to help out a family member who had been made redundant.
While hiring a family member can prove cheaper and quicker for an SME, without the need of a lengthy recruitment drive, it also poses risks to a business. However, there are ways to release cash in the short term to raise funds necessary to recruit beyond the familial sphere. Invoice factoring is one such finance option available, which allows a business to release cash held in invoices.
Commenting on the findings, a spokesman for the insurance company said to the Chartered Management Institute: "The silver lining of the tough financial climate has been the discovery of the 'family talent pool'.
"This trend of SMEs turning to trusted family members who may be available and have the right experience has strengthened their business."
Elizabeth Smythe