Before you hire the boss’s kid, consider this…

Closely on the heels of the Supreme Court’s recent decision on Students for Fair Admissions (SFFA) v. Harvard that struck down race-based affirmative action for colleges and universities, a private plaintiff filed a new lawsuit against Harvard. This week, the Department of Education Office of Civil Rights has filed yet another action. The latest suits both challenge the same practice: preferential treatment of applicants who are related to prior Harvard graduates or donors. The plaintiffs contend that that these legacy and donor preferences disadvantage applicants of color.

Many employers are considering how the Supreme Court decision impacts their DEI strategy. In light of these latest actions, they should consider taking just as hard a look at the role nepotism, the corporate counterpart of Harvard’s legacy admission practice, may play in their hiring decisions.

How it plays out at work

To level set, nepotism is hiring or giving special treatment (such as promotion) to family members in the workplace. In it there is typically the assumption that the individual receiving that benefit isn’t qualified or deserving.

How common is nepotism? Hard to pinpoint but some data suggests it’s more prevalent than we might think. A 2014 US Department of Labor study that found that 22% of young men under 30 worked at the same place as their father.

Just about everyone who works for a mid to large-size U.S. company can probably cite one or more instances of blatant nepotism, particularly as it applies to more junior or internship roles where there is potentially more latitude on skills and experience. Employee referral programs also tend to encourage nepotism.

Is workplace nepotism a problem?

Aside from whether the individual is actually qualified for the role, yes, it can be a problem.

I’ve seen employee survey responses and write-in comments from organizations where nepotism was perceived to be widespread. Employees notice and resent it. Nepotism dampens morale and makes employees feel that they have less opportunity for career development and growth if they don’t have the right connections or last name. And because nepotism is often initiated by more senior leaders and managers in the organization, it can hurt institutional credibility.

Finally, as alleged by the Harvard plaintiffs, nepotism potentially takes opportunities away from individuals from underrepresented groups.

How to manage it

Does this all suggest that you should never hire the boss’s kid or some other senior leader’s next door neighbor’s kid? No, of course not. These could be highly valuable candidates and they probably have been given a good idea of how the company works and how they would fit in. It’s just important to carefully manage the optics.

Foremost, the best action is to rigorously follow your company’s standard hiring process when family referrals are involved. In other words, post the job, recruit internally and externally, conduct interviews (preferably by a diverse panel), and choose the most qualified individual. Following the standard process helps manage perceptions of nepotism (optics are important) and ensures that you can confidently say you hired the most qualified candidate (which may indeed be the boss’s kid).

Easier said than done, you might be thinking. Everyone has a role to play here:

• Hiring Managers: If your company has communicated DEI commitments, it’s completely reasonable and appropriate to invoke them when asking to follow a process instead of just making the hire or promotion (actions which typically conflict with corporate DEI efforts).

• HR professionals: Be an advocate and ally to check this practice when you see it. Plus, help others manage it in what can be a delicate situation when it comes up.

• Leaders: you have tremendous influence. Be thoughtful in how you position family and friends for positions and clearly express your support for following the standard process and channels for hiring and promotion.

Harvard has already said it’s taking a look at its preferential legacy and donor practices. It’s a good time for corporate America to take stock as to whether it has a similar opportunity for improvement.