Should Small Business Owners Make Friends with the People They Employ?

I was scanning some questions on LinkedIn the other day and saw someone asking the above question that made me start to think about it.

The relationship between a business owner and their employees has long been a topic of debate. Particularly in small businesses, where the workplace often takes on a family-like atmosphere, the question arises: should small business owners make friends with the people they employ? At first glance, the idea seems appealing—who wouldn’t want to foster warm, personal connections with those they work with daily? However, there are complexities and potential pitfalls to consider.

In this post, we will explore the advantages and disadvantages of blending friendship with employment and offer some practical advice for small business owners navigating these waters.

The Advantages of Friendship in the Workplace

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   Photo by Andrea Piacquadio: https://www.pexels.com/photo/two-women-holding-long-stem-wine-glasses-with-red-liquid-821054/

   A Positive Working Environment
   A friendly relationship between a small business owner and their employees can contribute to a positive working environment. When employees feel valued on a personal level, it fosters a sense of belonging and loyalty. Friendly relationships can help dissolve hierarchies, creating a more open and communicative workplace where employees feel comfortable sharing ideas, giving feedback, and voicing concerns. This can lead to increased productivity, as employees are likely to be more engaged and committed to the success of the business.

2. Stronger Team Cohesion
   In a small business, every team member plays a vital role. If the owner forms friendships with employees, it can help strengthen the sense of unity within the team. Mutual trust and respect can develop more quickly in an environment where professional relationships are infused with personal goodwill. This bond can enhance team morale, making everyone feel like they are working towards a shared goal. Friendships within the team can also lead to better collaboration, as people tend to work better with those they genuinely like and respect.
3. Improved Employee Retention
   Employees who enjoy working for a boss they consider a friend may be less likely to leave the business. In small enterprises where resources for high salaries and extensive benefits are often limited, the personal connection can be a valuable retention tool. Employees are more likely to remain loyal when they feel appreciated and supported by their employer, both professionally and personally.
4. Increased Transparency
   Friends tend to be more open and honest with each other. In a small business setting, where there’s a close-knit team, transparency is crucial for the smooth running of operations. A friendly dynamic may encourage employees to voice concerns more freely and provide honest feedback. In turn, the business owner may feel more comfortable sharing business updates and challenges with employees, fostering a collaborative problem-solving culture.

The Disadvantages of Blurring the Line

1. Compromised Authority
   One of the biggest risks of becoming friends with employees is the potential for compromised authority. In a business, the owner is the ultimate decision-maker, responsible for making tough choices that may not always be popular. When the boundaries between personal and professional relationships blur, it can be difficult for the owner to maintain the necessary distance and objectivity required for making business decisions. Employees may come to expect preferential treatment or resist taking instructions from someone they view as a peer or friend rather than a boss.
2. Difficulty in Managing Performance
   Giving constructive feedback or managing underperformance can become awkward when a business owner is too close to their employees. No one wants to reprimand a friend, and no one likes being reprimanded by a friend. This can lead to a reluctance to address poor performance or misconduct, which ultimately harms the business. The emotional weight of potentially damaging a personal relationship may cause the owner to shy away from difficult conversations, allowing issues to fester and grow.
3. Perceived Favouritism
   Even if the business owner tries to treat all employees equally, others may perceive that friends are given preferential treatment. This can cause resentment and division within the team, especially if some employees feel that friendship influences decisions about promotions, pay rises, or task allocations. Favouritism, whether real or perceived, can be extremely damaging to workplace morale, leading to disengagement and, ultimately, turnover.
4. Blurring of Professional Boundaries
   Friendships can sometimes lead to blurred boundaries between work and personal life. A small business owner who socialises extensively with their employees may find it harder to switch off from work, as work-related conversations spill over into personal interactions. This can also create confusion for employees, who may not be sure when they are dealing with their boss versus their friend, leading to potential miscommunications or misunderstandings. The professional structure that a business needs can start to erode, potentially leading to chaos.

Finding a Middle Ground

Given the potential benefits and drawbacks, the key for small business owners is to find a middle ground. It’s entirely possible to have a warm, supportive relationship with employees without becoming too personal. Here are a few tips for navigating the fine line between friendship and professionalism:

• Set Clear Boundaries
  It’s important to set clear boundaries from the start. While it’s great to be approachable, the owner should make it clear that their role as a business leader comes first. Establishing professional boundaries will help ensure that personal relationships do not interfere with business decisions or operations.
• Stay Objective
  When it comes to making decisions, especially those related to performance, pay, or discipline, objectivity is crucial. Even if an employee is a close friend, their performance and contribution to the business must be evaluated just like anyone else’s. Avoid letting personal feelings cloud judgement.
• Keep Socialising Balanced
  Small business owners can still socialise with their team, but it’s important to keep socialising inclusive, I once worked for a small company where sometimes the boss would take me out for lunch but leave other members of the team in the office. If an owner frequently socialises with only a select few employees, it can breed resentment among the rest of the team. Group events or activities that everyone can participate in are a good way to foster a positive team dynamic without falling into the trap of favouritism.
• Recognise the Limits of Friendship
  Friendships between a business owner and their employees will always be somewhat limited by the power dynamic inherent in the employer-employee relationship. It’s important for both parties to recognise this. As much as you may care about your employees, there will be times when you have to put the business first, even if it’s uncomfortable.

Conclusion

In conclusion, while there are benefits to forming friendly relationships with employees in a small business setting, caution must be exercised. The line between friendship and professionalism can easily blur, leading to complications that may ultimately harm the business. Small business owners should aim to foster a positive, inclusive workplace culture while maintaining the necessary boundaries to preserve their authority and ensure fairness. By striking the right balance, owners can enjoy the camaraderie of their team without losing sight of their leadership responsibilities.