There’s a shocking amount of small companies where a sizable proportion of the workers are family of the owner. The most perplexing example was a tax consultant whose 4 employees were his wife, his daughter, his son-in-law and his sister.
I’ve often looked down upon this and have been quick to label it as nepotism, but if I was in a position to hire someone, wouldn’t I prioritize someone I care about who was suffering to find acceptable working conditions in the labor market? Then again, this attitude generates a self-perpetuating problem where people can’t access to job openings through their own merits and meritocracy, because the family members of the company owner can’t find a job through their own merits and meritocracy.
There’s nothing wrong with a family owned and operated small business, but once you start hiring outside the family you need to value the performance of all employees fairly. If somebody is working hard at your company and you promote a family member who’s slacking off to a position the good worker was eligible for then that’s nepotism.
I think what happens a lot with small companies is that family members start out with key roles but then nobody is willing to demote them as the organization grows.
At my last company, the head of IT was definitely the most qualified when they only had 10 employees. She was also the owner’s sister in law. But the business grew, and with 150 people from across the industry, she started to look pretty clueless. But folks were afraid to criticize her position because she was a close relation of the owner. So IT suffered and projects weren’t done well, and qualified people couldn’t move up.