LONDON, April 6, 2011 /PRNewswire/ -- Research out today of 1,000 small business owners found that over a fifth (21%)* employ a family member and of these 43% cited the downturn as a reason for recruiting a relative. This was a positive move as 94% believe that a family hire benefits their businesses.
The study by specialist SME insurer ( http://www.hiscox.co.uk/business-insurance/) Hiscox found that, when asked about the main advantages of employing family members, over half (57%) said it came down to trust, followed by reliability (45%), relevant experience (40%) and simply knowing that their family members "will work hard" (44%). Surprisingly only 16% said they chose to employ a relative to actively create a recognised family brand.
Nearly a third (30%) of family run businesses chose to employ a relative to help them find work and just over one in ten (11%) said it was to help those who had been made redundant.
"The silver lining of the tough financial climate has been the discovery of the 'family talent pool'. The trend of SMEs turning to trusted family members who may be available and have the right experience has strengthened their businesses," comments John Heaney, SME insurance expert at Hiscox (http://www.hiscox.co.uk/).
While the research reveals the benefits of employing family members, it also acknowledges the risks. Almost half (43%) of SME owners believe there is a danger associated with keeping home life and work life separate when becoming your nearest and dearest's boss and a quarter (25%) thought it would bring family politics into the business.
"Understanding the risks to your business means that you can put strategies in place to ensure they don't become a problem. For example, think about succession planning and set out a long term strategy so all employees within your company are clear on their role and expectations for the future," comments John Heaney.
Brothers with the edge
Oliver Bolland recently set up Jool Edge, a design and marketing consultancy, with his brother Josh in the hope that one day, their company will be able to support the rest of their family. Bolland explains, "My brother and I realised that by combining our design and web programming skills, we had the knowledge and experience to set up Jool Edge. It felt like a natural progression for us to work together - Josh and I know each other's strengths and weaknesses, we can be honest with each other and we can really trust each other to make this business work, as ultimately we want our whole family to benefit from its success."
Grant Gordon, Director General of the Institute for Family Business, said: "Family firms are a proven breeding ground for entrepreneurship and working in a family business encourages greater resourcefulness as well as teaching family members valuable lessons."
"Overall the family business sector has weathered the recession well and fostering a spirit of entrepreneurship in family members should ensure these firms remain competitive as we emerge from the downturn."
Hiscox insures more than 100,000 small businesses in the UK, offering a range of business products including public liability insurance (http://www.hiscox.co.uk/business-insurance/public-liability-insurance/) and professional indemnity insurance ( http://www.hiscox.co.uk/business-insurance/professional-indemnity-insurance/ ).
Notes to editors
* Research of 1,000 SME owners was carried out on behalf of Hiscox by RedShift from 23 November to 5th December 2010
Case study available upon request: Oliver Bolland at Jool Edge
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group - Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox London Market underwrites internationally traded business in the London Market - generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, as well as high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA. Hiscox Insurance Company Limited, Hiscox Underwriting Limited, Hiscox Europe Underwriting Limited and Hiscox Syndicates Limited are authorised and regulated by the Financial Services Authority.
For further information, visit http://www.hiscox.com