Auto repair is for many a family business. Often couples or families will run a auto shop together, and sometimes the shop management is passed down from parent to adult child. Does this make the auto repair industry stronger or weaker? It’s complicated. There are arguments both for and against family favoritism in your business. First we should ask: How common is this kind of arrangement in the U.S.?
How Common is Family Favoritism?
In business in general, multiple family members working together for the same employer is quite common. U.S. Census data reveals that it’s even more common for men than women. Twenty-two percent of American men who lived with their fathers during their teenage years will have worked in the same company as their fathers by the time they turn 30. An extra six percent of these will work for the same employer but not at the same time.
The numbers are lower for women. Still, thirteen percent of daughters will work for the same employer as their fathers by the time they’re thirty (with an extra four percent working for them, but not at the same time).
A study by Martha Stinson and Christopher Wignall called Fathers, Children, and the Intergenerational Transmission of Employers showed that these numbers were much higher than could be explained by geographic proximity. In other words, it happens so often it has to be planned and not just coincidence. Not only does it happen frequently, but when sons and daughters share employers with their fathers, they make more money than people who work for other employers.
Merriam-Webster defines nepotism as: “favoritism (as in appointment to a job) based on kinship.” Nepotism is a word that has come to have negative connotations, the idea that it’s not fair to show preference to family. This is not always true, though. As with many things, there are pros and cons.
What are the Pros of Hiring Family?
In many ways family favoritism only makes sense – that’s why it’s so common, especially in small businesses. Plenty of these companies operate on a very small profit margin, and family members pitching in is the only thing that keeps them in the black. Children 12 and up can work for family businesses as long as the work is not hazardous, and their pay is not subject to Social Security or Medicare taxes. Family members will work overtime or weekends or for less money rather than see the business fail because they are personally invested in it or want to help their families.
Families often trust their own members more too. They’d rather hire their sons and daughters or nephews or cousins because they feel that family dynamics may exert some kind of quality control. In businesses with high turnover or that have suffered flaky employee behavior, hiring family is seen as a way to avoid more mistakes that have cost the business money in the past.
Abilities and preferences often run in families too. This may because of nature or nurture. A daughter may get her mechanical abilities from her father because she’s inherited those traits or because he took her to the auto shop and taught her the ropes when she was younger. Not every kid in the family will have the same inclinations, but some of them probably will. It’s easier to get a feel for whether younger members will be a fit for the business when they’ve been in and out of the shop and helping in other capacities for years. Often sons or daughter will get specific training so they can meet the needs of the family business better.
Finally, employing sons and daughters or nieces or cousins also meets one of the goals of the family itself which is to make sure that the members of the family can pay their bills and get ahead in the world. For most parents this is very important, perhaps more important than the business itself. When it’s time for older family members to retire, involving family can also mean that a succession plan for the business is in place. That means that the company the family has built will continue on prospering and representing the family to the community.
So: family favoritism is common in small businesses, and there are good reasons for it. Is it always good? No. There are also reasons to avoid it. In our next piece we will discuss the cons of employing or favoring family members in your auto shop.