Family businesses facing a human capital deficit can succeed in recruiting talent from outside the family by cultivating a family-like employer brand.

Keeping a business in the family and maintaining a strong team from one generation to the next is not always possible, and considering the benefits of diversity and inclusion, not necessarily ideal. A growing number of family businesses are finding that recruiting talent from outside the family is a business essential. This can be challenging, due to preconceived notions (accurate or not) about family businesses – namely that they offer lower compensation and fewer opportunities for growth, and have policies and cultures that favour family members over non-family employees.

Seeking to determine how family businesses can overcome such negative perceptions and attract the talent they need to thrive, Harvard Business Review synthesized more than 30 years of research on non-family employees in family businesses. The researchers’ core finding was that family businesses have a better chance of meeting their human capital needs if they veer from standard corporate hiring practices. After all, these typically centre on touting the same employment aspects in which most family firms lag behind other companies, such as compensation and advancement.

A winning strategy for family firms to recruit outside talent, according to the report, is to instead “embrace their inimitable ‘familiness’ and highlight those cultural aspects that positively differentiate them, such as caring, trust, and loyalty.”

There are several specific ways family businesses can “leverage their familiness” to gain an edge when competing for talent. One is to use their networks, which tend to be extensive. Family business leaders often have unique ties to their community and industry. These relationships can be rich talent resources, yielding potential employees who are likeminded and will more readily integrate into the business. Their compatibility can make them more receptive to joining the business, and more likely to stay.

Shining a light on the family identity, which embodies positive qualities such as integrity and tradition, can give family businesses a competitive advantage in hiring. Position your employer brand as an organization that cares about its employees, nurtures a sense of belonging and camaraderie, and strives for fairness, diversity and inclusion. Own the cliché that your business treats employees like family – and make good on the promise.

When competing for talent, it also benefits family businesses to emphasize stability and longevity. Meet prospective employees’ concerns about layoffs and closures by upholding the family’s enduring commitment to the business. Next-generation family members who devote their own careers to the firm stand as living proof.

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