HR Headaches: Spotting and Handling Nepotism in the Workplace

Learn how nepotism in the workplace can affect your business negatively, and what to do if it’s an issue.

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Are you guilt of nepotism in the workplace?

Here's what you need to know:

  • Nepotism can result in low employee satisfaction
  • You could end up with lawsuits if you allow nepotism in the workplace
  • Coordinate with HR as soon as you notice nepotism in the workplace

Nepotism in the workplace is one of those tricky situations that all HR and People Ops people fear. It can be hard to identify and then prove, but its impacts on morale can be devastating nonetheless.

Not only can your employees’ satisfaction start plummeting if it seems like the only way to move up is to be related to the boss, but nepotism can also put the company at serious legal risk as well.

It’s a thorny subject that everyone would rather avoid and prefer if it just didn’t happen. But the reality is that nepotism still pops up in the workplace and it’s something that every leader, HR professional, and People Ops teammate should be ready to handle. Here’s how.

Nepotism in the workplace: Understanding the risk

It can be tempting to chalk nepotism up to an unfair world and move on, but doing so would be a significant mistake. While there are no direct laws about nepotism in the private sector, it’s risky business for several reasons.


First, it can land your business with a discrimination lawsuit. If an employer hires friends or relatives to the point that they’re effectively excluding people of other sexes, races, belief systems, or ages, it could amount to a Title VII violation under the Civil Rights Act of 1964.

Nepotism can result in a discrimination lawsuit, if you’re not careful.

Further, if the hiring of a friend or relative amounts to forcing out another employee, it wouldn’t be unreasonable for the aggrieved employee to file a lawsuit for damages as a result. Even if the company ends up winning any lawsuits in the end, the time and money it takes to even be involved in legal proceedings can be a fatal blow to many businesses.

Promoting the wrong people

Beyond legal and financial issues, nepotism can land your business in hot water when it comes to success. There’s a reason why nepotism is frowned upon: It can quickly cloud judgment. When hiring or promoting someone you’re personally fond of, it can be challenging — if not impossible — to evaluate them objectively.

It’s easy to see how people who have advanced because of nepotism can find themselves in roles they’re unprepared for and how the company can start to suffer as a result.

Don’t just hire people that the boss likes — make sure they have the right skills.
For better or worse, businesses are made up of the people who comprise them. If your business is full of people who the boss likes rather than people with the right skills and experience for the job, it’s going to be hard to find success.

How to spot nepotism in the workplace

It can be hard to spot, much less prove, nepotism in the workplace, but there are a few things you can look out for to help you identify it.

As yourself the following questions:

  • Was the person in question hired or promoted despite not having the necessary qualifications for the role?
  • Do they often evade their responsibilities or mess up regularly at work with little to no consequences?
  • Do they behave unprofessionally without consequence?
  • Are they subject to less strict (or perhaps even nonexistent) performance reviews?
  • Are they earning more than their peers despite having the same or even less experience?

These aren’t the only ways that nepotism can rear its ugly head, but they are some of the main ways. If you answered yes to any of the questions above, you might have a case of nepotism on your hands.

What to do once you’ve identified nepotism in the workplace

Once you’ve identified nepotism at work, act quickly so it doesn’t cause other issues.
Once you think you’re dealing with nepotism, there are a few tips and tricks that you can follow to make the whole process easier on everyone.

Document everything

When it comes to things like nepotism, it’s best to fall back on tried-and-true HR practices. You’ll want to document as much as you possibly can to prove not only the nepotism but how long it’s been going on and the damage it has caused as well. The more data, documentation, and information you have to support the assertion of nepotism you have, the harder it will be to refute or ignore.

Coordinate closely with HR

Since this is an HR-related issue, you’ll want to coordinate with them as soon as possible to make sure you have all of your documentation ducks in a row. This will be a beneficial relationship and channel of communication to have because, once you handle the specific case you have on your hands, you’ll likely want to work with HR to find ways to keep nepotism from happening again.

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Remain professional at all times

It’s easy to see how telling someone that the family member they hired or promoted is a product of nepotism could go badly. One of the best things you can do is prepare for a backlash, should there be one. Don’t base the case on someone’s bias, mere perception, or dissatisfaction that they didn’t get a promotion. Be sure to remain calm and professional and keep your bias in check. The more objective you can be, the more credible your claim will be.

Take care of yourself

There’s no way around it — this process can be super draining. So whether you have a therapist you can vent to, or there’s someone on the POPS or HR teams who can lend an ear, do what you can to take care of yourself. It’s no easy task to call out discrimination in the workplace.

How to keep nepotism from cropping up again

Once you have squared away the case of nepotism that brought it to the forefront of your company, now is the time to work to keep it from happening again.

This is an excellent opportunity for POPS and HR teams to work together to create anti-nepotism policies and handle the fallout from a case of nepotism in the workplace. If you haven’t been putting effort into employee engagement, satisfaction, and wellbeing lately, this is a good time to do so. Beyond nipping nepotism in the bud, focusing on remedying the impact it has had on your employees shows them that they matter. Actions always speak louder than words.

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