How to deal with nepotism in the workplace

It’s not what you know, it’s who you know. Or who you’re related to. Everyone will have heard this before, and it would be naive to assume there’s no truth in it. Or value. Cultivating a personal network of contacts and acquaintances is one of the fundamentals of the business world.

Where it becomes problematic for employers is where those non-work networks and relationships – friends and family – influence workplace decisions. This is what we call nepotism, where an employer or decision maker hires or otherwise favours their family members or friends.

What is nepotism at work?

Nepotism happens more commonly in smaller businesses, but in larger organisations also. Positions, promotions, pay increases, preferable work assignments – opportunities are given to individuals based on who they know, relatives or friends, rather than other employees who may rightly feel aggrieved.

Hence, nepotism is bad for business, bad for employees and morale, and in some cases it risks leaving employers open to accusations of discrimination.

What is the difference between nepotism and favouritism?

Nepotism and favouritism are often used interchangeably, and although there is definitely some overlap, they don’t mean quite the same thing.

A favouritism definition: “The practice of giving unfair preferential treatment to one person or group at the expense of another.”

Favoritism is a wider term that can encompass a broader spectrum of preferential treatment. A line manager can show favouritism towards certain employees for good reasons, like they’re a hard worker or a top performer. This is acceptable and even to be encouraged where it reinforces desired employee behaviour.

Favoritism can be problematic and even stray into discrimination where preferential treatment can be said to be based on reasons like personality, mutual interests or – critically – any of the characteristics protected in the equality rights act. Favouritism on the basis of friendship is where the overlap with nepotism begins.

A nepotism definition: “The practice among those with power or influence of favouring relatives or friends, especially by giving them jobs.”

Nepotism differs from favouritism in that it concerns preferential treatment on the basis of non-work connections, a relative, friend or family member.

Is nepotism illegal?

There are no laws against nepotism, therefore any employer is free to hire anyone based on their close family ties. Hiring relatives and family members might be cost effective. Bringing people you know and trust into the workplace isn’t always a bad call.

But the message this sends to other employees about how their hard work and loyalty will be recognised must be considered.

If an employee is disgruntled enough at being passed over for promotion repeatedly – because her manager keeps hiring his golf friends, for instance – she might consider legal action on the basis of discrimination.

For this accusation to carry legal power, the situation must involve a protected characteristic, and it’s a real risk for organisations who don’t put the correct measures in place.

What is the impact of nepotism at work?

If nepotism exists in your business, by its nature, it means decisions are being made that don’t have the best interests of the organisation at heart. Not only does this impact morale, but roles, rewards and assignments are being handed to a close friend, brother, or nephew, regardless of whether they are the best person for the job. This is a problem.

Additionally, by favouring friends or family members through nepotism, employers are sending a message to other employees. Their commitment to the organisation, their time, loyalty, hard work, engagement and performance are worth less than their leaders’ non-work social ties.

Nepotism fuels resentment that can easily create a toxic working environment. When employees lose out to less experienced, less qualified individuals, it can harm performance, engagement, and can dramatically increase staff turnover. You’re wasting one of your most precious resources – experienced employees – by overlooking their potential.

And new employees brought in through nepotism may also face an uncomfortable time and struggle to integrate with their colleagues as a result of this resentment.

How do we tackle nepotism in the workplace?

Policy

Anti-nepotism policies can be applied that make it more difficult for nepotism to be practiced. By restricting family relations from working in the same team or department, for instance. Or ensuring that existing close relationships must be declared and any related hiring decisions subject to appropriate diligence. Recruiting managers may be required to step aside and hand the process over to an objective colleague where their own family or personal friends are involved. Creating a clear and well-thought-out policy will make it much more difficult for nepotism to occur under the radar.

Communication

Nepotism is an unprofessional practice and should in most cases be treated as such. However, it’s possible that those engaging in it don’t see they’re doing anything wrong – we already talked about how it can seem like sense to bring in people you know.

Make sure your internal grievance processes are clearly understood. Putting clear channels in place to ensure employees feel able to report incidents of nepotism when they believe they see or experience them, means they can confidentially air their concerns as they would for any serious instance of unprofessionalism.

Demonstrate fairness

Where friends or family members are employed, ensure that their suitability for the role is objectively assessed. Employees need to know that the same rules and expectations apply to everyone, particularly if they work in an environment where nepotism is felt to have occurred.

In such an environment, HR comes under increased pressure to ensure (and demonstrate) fairness in all employee processes, from recruitment and promotion to performance assessment, compensation, and even disciplinary. Extra effort must be made to make policies and procedures clear and credible.  

Learn more below about how to promote diversity and inclusion in your workplace, from The Equality Act of 2010, to gender pay gap reporting: