Hiring friends, family

A strong social bond doesn’t always translate into good working relationship

In her 34 years as a bill collector, Janice Ledden said she has learned to be sensitive, yet tough, with the people she is collecting from. She said a good collector can’t “soft soap” people who tell sob stories, nor can they relent on people who are determined not to pay.

This can often be a cold, cutthroat business, Ledden said. Once while collecting bills that were in the name of a dead woman, the woman’s son instructed Ledden to dig his mother up for the money, because “she was no good anyway.”

So when Ledden started her own firm — Cobra Collection Agency Inc. — in January, she hired people she thought could be tough in collecting on accounts. Her daughter Elizabeth Isakson, 24, had been involved with collecting agencies herself since she was 15, and was thus a natural pick. She also hired a close friend. Ledden chose two of the most reliable people she knew — safe choices on the surface.

As many business owners know, nepotism has great pluses, but it can also backfire tremendously on both business and personal relationships. In Ledden’s case, the work relationship with her daughter has worked well. But Ledden’s friend, who she chose not to name, was let go from her position not long after she started. They are still good friends, but Ledden said the woman’s professional performance was lackluster.

“It’s already hard to get someone on the phone because they are not going to be receptive all the time,” Ledden said. “But she got comfortable in the job and didn’t do anything.”

Ledden said she now thinks hiring friends works only if that person has something vested in your company’s growth and future. This, she believes, is why the employment of her daughter, and subsequently her husband, Mike Ledden, has worked out.

But more crucial than having like goals, small business owners should hire employees based on the business’ needs, said John Dooney, manager of strategic research for the Society for Human Resource Management. Dooney said this is one area where entrepreneurs can follow the lead of big business.

“Generally, you want to weigh employees against the requirements for the position,” Dooney said.

While hiring relatives and friends shouldn’t be rejected altogether, don’t assume a solid social relationship spells the same at the shop.

“People need to consider what it’s going to feel like for both the employer and employee,” Dooney said. “You need to lay some ground rules for behavior at social events as opposed to work events.”

Ledden and Isakson have formed some loose rules for their working relationship, structured around each others’ skills.

“We balance each other out,” Ledden said. “I don’t like dealing with the finances,” and, finishing Ledden’s sentence, Isakson chimes in, “and I don’t like dealing with the clients.”

Isakson said part of the success of their working mother-daughter relationship is that Ledden has no problem occasionally taking orders from her.

“She trusts me with the business because she knows my name is on it just like hers is,” Isakson said.

In less than four months, Ledden and Isakson have expanded to three employees. Outside of her husband, Ledden said she has been sure to thoroughly interview applicants, searching for the toughness she sees as necessary to do the job. Ledden expects she will need to grow her staff to 25 by the year’s end, as she anticipates growing the number of collection accounts the firm handles to over 1 million.

Though she doesn’t consider initially hiring her friend a decision she regrets, Ledden doesn’t expect any of her other friends will pass her interview as she continues to grow the business.

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