As a contractor, you know that good employees are often hard to come by. So when a family member wants to work for your company, it seems like an ideal solution. But before you have your relative fill out a W-2 and report for duty, it’s a wise idea to consider the decision carefully.

“There are many pros to working with family, and the experience can be enjoyable,” says Tom Hubler, author of The Soul of Family Business: A Practical Guide to Family Business Success and a Loving Family and owner of Hubler for Business Families, Inc.

Benefits of working with family

“There is an automatic trust when family works together,” Hubler says, “as well as a tremendous commitment.” He says he feels that it’s gratifying to have a “common sense of purpose about what you’re doing with the business and why you’re doing it.”

The benefits to working with family are many, agrees Trent Urban, president of The WireNut, a home services provider for residential HVAC and electrical needs.

“By working together you can get more quality time with family, including in the form of short breaks and eating lunch together,” Urban says. “It’s also nice to share common ground. For instance, it’s easier to be empathetic about a hard day and to console each other.”

Downsides of working with family

Not surprisingly, troubles can crop up when family members work together.

“One of the most problematic cons of working together is the perpetual worry of conflict of interest,” Urban says. “Favoritism, even perceived, is always a concern.”

This perception of playing favorites can occur among other non-family employees, as well as within the family itself. Family members who aren’t employees but want to be may get upset.

There are definite drawbacks to working for family, Hubler agrees—especially for children. “Being a son or a daughter employee can be a very tough row to hoe, because they’re seen as the boss’s kid, and they aren’t always treated well,” he says. “It’s also not unusual for business and financial differences to erode family relationships.”

Tips for effectively working with family

In order to work in harmony with family, Hubler and Urban suggest the following five tactics.

Adhere to structure and formality. “Family members often say they don’t need structure to work together, because they love each other,” Hubler says. “I say, it’s because they love each other that they need structure and formality. Develop clear roles and responsibilities and solid systems for decision-making, communication and compensation.”

Have the employee report to someone other than family. Putting a nonfamily employee in charge of the relative helps to maintain professionalism and allay fears of favoritism among other workers.

Don’t treat your business like your family. Hubler suggests, “Do use your family values to inspire you and help you formulate a common family vision to unite the family, but don’t think that because you’re a family member you’re entitled to break the rules connected with being a good employee.”

Urban agrees. “Hold family to the same standards as everyone else,” he says. “Don’t devise any special ways for the family employee to circumvent the chain of command. Also demand proper qualifications, and pay according to experience.”

Separate work and personal life. “Develop boundaries,” Urban says. “Be professional and respectful of your family member’s private life in the workplace. Also, try not to be too comfortable during conversations at work.”

Discuss potential problems and an exit strategy. “Expect that problems will crop up and have an open discussion about that,” Urban says. “Also consider devising an exit strategy in case things don’t work out. Have an amicable way for a family member to exit the company with no hard feelings.”