MarketWatch: Recession brings tough love to family firms

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June 4, 2010, 1:51 a.m. EDT ·

Recession brings tough love to family firms
By Ruth Mantell, MarketWatch


WASHINGTON (MarketWatch) -- Expecting Mom and Dad to set you up with a cushy job in the family business? Not so fast.

In this economy, some family firms are finding themselves forced to turn down job requests from relatives, and business owners are laying off family members and long-time trusted employees because of the length of the downturn, said Wayne Rivers, president of the Family Business Institute, a consultancy in Raleigh, N.C.

"Most of the people I talk to are thinking right now in terms of pure survival: How do I survive 12 more months?" Rivers said. "If a business is already struggling and you are staying awake at night trying to figure out lay offs then the last thing you need to do is increase headcount."

William Dunkelberg, chief economist with the National Federation of Independent Business, said businesses should not hire family members who don't earn their own way, especially during a recession.

"If you hire a ne'er-do-well nephew you are basically giving them your income," Dunkelberg said. "The bottom line is if you hire somebody and they don't earn their salary that comes out of your pocket."

Plus, family members shouldn't receive additional compensation because of their connection. "You should be able to pay people whatever you think they are worth," Dunkelberg said. ..........(more)

The complete piece is at: http://www.marketwatch.com/story/recession-brings-tough-love-to-family-firms-2010-06-04?link=kiosk