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.
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.