advantages of nepotism

Who You Know

Nepotism Is Underrated

Nepotism has a bad rap.

We’ve all been here: your company has a job opening… and you personally know someone with the right skill set. Do you take a chance and put the two together?  Why not?! This is the new company culture, where who you know really does matter. And if there has ever been a stigma, it’s been paper shredded – along with that competing unknown applicant’s resume.

advantages of nepotism

It’s a term loosely thrown around and often said with a snide sneer by someone who didn’t get the job. If you look at firm reviews on GlassDoor.com, you’ll find numerous complaints that major companies such as IBM, Unilever and GE Electric are just rife with unjust employment practices like nepotism. It would be interesting to hear if there’s actually a company anywhere that doesn’t use nepotism. It’s how politics, Hollywood and the world in general go round.

Get over it.

Hiring people you know can have some very distinct advantages, as Dunhill Staffing Systems points out:

  • Reduced recruiting costs: Nepotism allows firms to inexpensively identify a pool of candidates for positions.
  • Lower turnover: They are often the most dedicated employees and studies have found reduced absenteeism.
  • Commitment and ownership: Employees who know that their friends may be impacted by their actions have an extra reason to want the company to grow and prosper.
  • Higher level of loyalty: a no-brainer. If you’ve hired a friend they are going to watch your back. Something hard to come by in a corporate environment!
  • Higher level of morale: A “family-type” environment – even when comprised of friends – can boost the morale of all employees and positively impact customer relations.

Dr. Wolfram Peitzsch, head of HR at Bayerische Landesbank for over 20 years, emphasizes that just because a candidate is brought to the attention of HR by a recommendation doesn’t mean that they are going to get the job. All the standard practices of rigorous scrutiny are in place to make sure they are a good fit for the position. But what makes a personal referral so valuable is the unique insight management obtains into that candidate’s skills, strengths and weaknesses. This is a great advantage over an unknown candidate, where all you have to go by is their resume and interview answers. Either way, the probation period is in place to make sure it was a good hire, via nepotism or not.

All these positives aside, when using nepotism there are some ethical guidelines to follow, to ensure that the whole situation goes smoothly not only for your friend – but everyone in the company. Without common sense the whole thing falls apart and this is exactly what gives nepotism a bad name. The new hire should work just as hard, be disciplined as much and be held to the same rules as everyone else in the firm. Period. Nepotism should in no way cross over the line into favoritism.


About the Author

Carol Peitzsch is a wordsmith specializing in marketing and branding text. With over 25 years experience in the corporate world – from Silicon Valley to Europe – she shares her knowledge through various media outlets and gives marketing lectures at the EU Business School in Munich.