Employee Relations

3 Ways Nepotism in the Workplace Harms Your Company

Nepotism in the workplace can be damaging to employee engagement and retention. LaborSoft breaks down the damaging scenarios that HR professionals should know

Nepotism in the workplaceNepotism in the Workplace
Nepotism in the workplace can be a major headache for HR. One that’s should be avoided if at all possible. Nepotism, the practice among those with power or influence of favoring relatives or friends, especially by giving them jobs, can easily lead to a toxic workplace environment, or even lawsuits.  If the person being acquired is genuinely unfit for the job, promoted without cause, or allowed to break rules with impunity, nepotism can be cited and thus, create an unstable workplace that can cost companies more than just employee morale.

Three Ways Nepotism Can Harm Your Company

1 - Nepotism destroys engagement and productivity

If your workplace gets the idea that performance doesn't matter, only personal connections, then it's nearly guaranteed that their productivity and workplace engagement will reflect this.  Workers want to believe they can get ahead, and that hard work will be rewarded.  If they see beneficiaries of nepotism being promoted or gaining other benefits without putting in hard work, while they themselves see nothing, they won't bother giving their best effort.

2 - Nepotism harms employee retention

What is an employee going to do if they feel their work isn't valued, and they aren't being properly recognized for their efforts?  Assuming they're contractually free to do so, they're going to look for employment elsewhere.  Rampant nepotism within a company can easily drive away hard workers, and that can be disastrous in the long run. 

3 - Nepotism invites lawsuits

This is a tricky area, because nepotism is not illegal.  However, blatant nepotism or other open favoritism can create circumstances where illegal activity becomes more likely to occur. For example:

If there are multiple beneficiaries of nepotism, and they are all of the same race\religion\gender, this can become the basis for a discrimination suit.

If beneficiaries of nepotism are allowed to break rules freely, this can easily lead to abuses of power that set up for hostile workplace suits.

There are multiple ways constructive discharge suits can be set up, due to nepotism claims, mostly revolving around a company's failure to promote\support other workers until they feel compelled to quit.

In short, while the politics surrounding nepotism can make it difficult, HR should be making its best effort to reduce nepotism in the workplace.

LaborSoft’s innovative technology is one of many integral solutions that keep your business, in business. Our employee relations analytics, case management workflows, and our central repository of documentation streamlines HR case management to mitigate risk of operational bottlenecks, costly lawsuits, and legal ramifications stemming from HR issues and complaints.


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Contact us for a customized demonstration and learn how LaborSoft can help you improve communications, build a more collaborative, safe, and supportive workplace, while reducing the likelihood of costly litigation. 


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