Nepotism in the Workplace: What You Need to Know

It's no secret that family members often help out friends and relatives when they're looking for a job, but is this practice always fair to other candidates? In many cases, nepotism can give someone an unfair advantage in the hiring process. Let's take a look at some of the causes and effects of nepotism in the workplace.

What Is Nepotism in the Workplace?

Nepotism in the workplace is the practice of hiring or promoting family members or close friends, regardless of their qualifications. While it can take many forms, nepotism is generally thought of as a form of workplace discrimination.

For example, if two equally-qualified candidates are up for a promotion, and the boss gives the job to his son-in-law, that would be an example of nepotism. Nepotism can also occur when someone with less experience is hired simply because they know the boss.

In some cases, nepotism can be beneficial, especially if the person being hired has the necessary skills and qualifications. However, in many cases, nepotism creates an unfair workplace where qualified individuals are passed over for promotions or jobs simply because they don't have the right connections.

What Are the Causes of Nepotism in the Workplace?

Nepotism has been a part of workplace culture throughout human history. From monarchies to running a family business, nepotism is an integral part of many cultures. But, what causes nepotism to arise in modern offices?

• Tribalism. Humans have an innately discriminatory view of outsiders. This can cause a workplace to gradually become more and more homogenous as people are hired not for their talent, but because they fit in. An extreme version of this tribal thinking is to only hire people who are friends or family of the people in charge.
• Bad Management. Nepotism at work can be a sign of bad management. Certain managers may hire and promote family members purely because of favoritism. This is at the expense of the other candidates, staff, and the organization.
• Cutting Costs. A more benign cause of nepotism is that it serves as a useful shortcut to hiring new staff. Advertising for jobs is costly and the following processes for onboarding can be detrimental to the company. Hiring family members or friends makes the process quicker and more reliable.
• Risk Aversion. As with cost reduction, nepotism also reduces the risks associated with hiring unknown talent. When hiring a friend or a family member, the managers are already aware of the talents and flaws of an individual.

Examples of Nepotism in the Workplace

Nepotism extends beyond simply hiring family members for certain positions. It can include demonstrations of favoritism, unfair promotion, as well as using positions of power to positively impact a family member. Some famous examples of nepotism are:

• Donald Trump. Whilst serving as president of the United States, Trump elected his eldest daughter, Ivanka, to be his chief advisor. Although she gained a BA in economics, she had no political experience prior to being appointed.
• Rupert Murdoch. As another controversial figure, it may be no surprise that Rupert Murdoch has been criticized publicly for nepotism. Murdoch hired both of his sons for positions within his various media companies and even faced a court case over purchasing his daughter's broadcasting firm in 2011. In instances such as the latter, nepotism takes the form of business transactions.
• "Girls" TV show cast. The popular TV show came under fire due to all the main cast being the daughters of famous people. In this instance, nepotism doesn't arise because a boss chose to hire family members, but because of the automatic prestige given to a celebrity's family member. In instances such as this, a family relationship allows someone to get recruited instead of more qualified candidates.

Effects of Nepotism in the Workplace

While there are some benefits to hiring friends and family members, nepotism in the workplace can have several negative effects on the psychological climate of a company.

• Employee morale. Nepotism can erode employee morale if staff feel that they are being passed over for promotions or assignments in favor of someone who is related to the boss.
• Entitlement nepotism. This is when the family member of the boss feels a sense of entitlement within their position simply because of their relationship. It can also lead to unprofessional behavior, as employees may come to expect special treatment.
• Workplace tension. In addition, nepotism can create tension among employees. This can negatively impact collaboration and the work output within affected teams.
• Company image. When a workplace prioritizes a manager's family member over qualified employees it can create a negative image. This in turn will make it difficult for the company to attract and retain top talent.
• Risk of legal action. If there is enough evidence to back up perceived nepotism, an organization risks being taken to court over unfair hiring and business practices.

How to Deal with Nepotism in the Workplace

Nepotism at work can cause other employees to feel frustrated, undermined, and unmotivated. Although it is a common occurrence, there are several ways to help a business succeed in effectively preventing unhealthy nepotism.

• Create anti-nepotism policies. Many companies have anti-nepotism policies in place to ensure that hiring and promotion decisions are based on merit rather than family ties. These policies typically forbid employees from supervising or managing close relatives, and they may also prohibit relatives from working in the same department or sharing confidential information.
• Hire talented HR staff. HR staff can help to assess for and prevent nepotism in the workplace by implementing strict policies and procedures related to hiring and promotions. For example, all candidates should be required to go through the same application and interview process, regardless of their relationship with employees. In addition, HR should keep track of any potential conflicts of interest and take action to resolve them before they escalate. By taking these steps, HR can help create a fair and unbiased workplace where everyone has an equal opportunity to succeed.
• Create anonymous communication channels. Nepotism may make other team members feel uncomfortable with reaching out about their concerns. By creating ways for employees to communicate without risking retaliation, a company can foster a more open, fair discussion about its practices.

Frequently Asked Questions

What Is the Difference between Favoritism and Nepotism?

There is a big difference between favoritism and nepotism, though the two terms are often used interchangeably.

Favoritism is when someone is given preferential treatment because they are liked or because they are in a position of power. Nepotism, on the other hand, is when someone is recruited or promoted simply because they are related to the person making the decision.

While favoritism can be unfair, it isn't necessarily illegal. Nepotism, however, can be considered a form of discrimination if the person hired is not qualified for the position. As a result, it's important to be aware of the difference between the two terms.

Is Nepotism a Form of Discrimination?

In many family-owned businesses, nepotism is common practice. While this may be seen as a form of discrimination by some, it is not necessarily harmful. In fact, family members often make great employees because they are familiar with the business and its values. They may also be more loyal and committed to the company than non-family members.

However, nepotism can become a problem if a family member is hired simply because they are related to the owner, rather than because they are the most qualified candidate for the job. In these cases, it can lead to discrimination with the exclusion of talented employees who are not related to the owner. Ultimately, whether or not nepotism is harmful depends on the specific circumstances of the business.

What Can HR Do about Nepotism?

One of the most difficult challenges facing Human Resources is how to deal with nepotism. On the one hand, entitlement nepotism, where employees feel entitled to special treatment because of their family connections, can lead to resentment and low morale among the workforce. So what can HR do to stop harmful nepotism from taking root in the workplace?

• Transparency. HR staff can be involved in all hiring and promoting processes to ensure that managers are making decisions based on merit. They can also implement a transparency policy, where the reasoning behind the hiring or promoting process is shared with candidates.
• Training. HR professionals can create training sessions and manuals to address nepotism directly. This can address issues around hiring family as well as urge managers to speak up when they spot nepotism.
• Establish a clear job description. By being clear and detailed in the experience and skill requirements for each role, managers are compelled to hire more qualified employees rather than choosing a new hire based on emotional attachment.
• Anti-nepotism policy. By establishing a clear stance against nepotism in the company policy, an organization sets a foundation of fairness that will encourage honest hiring practices in the future. The policy should be made clear throughout the organization by being displayed on the company website, employee handbook, etc.

Is Nepotism Illegal in the Workplace?

Although cultural norms nowadays often cast nepotism as discrimination, it isn't plainly illegal in either the UK or the US.

In the US, there are laws prohibiting public officials from hiring family members in many states. In other states, conflict of interest laws can be called upon to contest such cases. However, for the average office, nepotism is not classed as illegal.

In the UK, there are no official legal restrictions on nepotism. However, charges can be made over discrimination in workplace practices.

Is Hiring a Cousin Nepotism?

A cousin is a family member and therefore hiring a cousin would indeed count as nepotism. However, individual factors should be considered when assessing whether this form of nepotism is problematic.

Factors include whether the family member was recruited because of their connection or talent and whether the business is a small, family-run business, or a large corporation. Hiring a cousin within a small, family-run business does not necessarily class as unethical behavior.

Can Nepotism Be a Good Thing?

Of course, nepotism can have a positive effect in certain circumstances. Many family businesses are built on the principle of nepotism - hiring family members to work in the business.

One positive effect of this practice is that family members are more likely to be loyal to the business. They have a personal stake in the success of the company, and they are less likely to leave for another job.

Another positive effect is that family members often have a strong relationship with one another, which can help to create a positive and supportive work environment.

Finally, family members who work together can often better understand and relate to one another, leading to improved communication and cooperation. While nepotism can have some downsides, it also has the potential to create a strong and loyal workforce within the right circumstances. Unfortunately, however, it often stretches far beyond the territory where it could be considered appropriate.