Nepotism refers to a form of unfair workplace procedure when family members or friends of the boss or manager are hired not purely for their skills, experience or knowledge.
It deteriorates a company’s performance both inwardly and outwardly. Some of its negative effects include:
- Claims of discrimination
While the act of nepotism itself is usually not illegal, the practice can result in illegal behaviour or outcomes.
For example, if you only hire from a small pool, you will eventually cut off qualified candidates who may have grounds to claim discrimination.
- Reduces the internal talent pool
When you commonly hire people who fit within your favoured class, you shrink your pool of resources; truly qualified candidates or employees.
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In doing so, you weaken the future of your organization by losing out on top talent, damaging the culture, and eroding employees’ trust in the company leadership.
- It seriously impedes talent retention
Research shows that 87 per cent of millennials are looking for development and career advancement opportunities.
Thus, the practice of even occasional nepotism is a great way to lose these employees. Your top talent will eventually leave your organization in favour of companies that can offer them advancement and skill development.
- It corrodes company culture
This goes without saying, but companies that dabble in nepotism can never build a dynamic and healthy work culture. You cannot build trust in your company when management is unfairly advancing certain employees and ignoring more qualified ones.
- It lowers productivity, creativity and quality of work
Ultimately, the act of nepotism or any unjust favouritism will end high productivity, rich creativity and quality output in a company.
When leadership and other key positions in the organization are filled with anyone other than your top talent, the results will eventually show.
