Should Relatives Gain Experience Outside the Family Business Before Joining?
Short answer. Outside experience can help a relative build skills, credibility, and an independent record before entering the family business. Set the expectation in advance and define what experience matters for the role. Judge the candidate on relevant results and conduct, not simply on where they worked or how long they were away.
Outside experience can help relatives prepare for work in the family business, especially when the company needs skills the person has not yet demonstrated. It gives them a chance to meet performance expectations without family history shaping every interaction. In my experience, the value comes from what the person learns and delivers, not from simply having a job somewhere else.
Decide What Experience the Business Needs
Start by identifying the skills and judgment required for the role the relative may eventually seek. A future operations leader may need experience managing people, budgets, or a complex project. A finance role may require strong reporting and controls. The family should be specific about the capability it expects the person to develop, so outside work has a purpose.
Set the entry policy before a particular relative is ready to apply. Explain whether outside experience is expected, what types of roles count, and how candidates will be assessed. Apply the policy consistently to family members. Clear expectations support fair treatment and reduce the chance that employees see a position as reserved for a relative. For related guidance, see how to set rules for relatives joining the business.
Assess What the Person Actually Learned
When the relative is ready to be considered, review the responsibilities they held and the results they produced. Ask what they owned, how they worked with colleagues, and how they responded when a project went poorly. References can help confirm the person's account. A recognizable employer or impressive title may be useful context, but it does not prove readiness to take on a role in the family company.
Consider whether the experience transfers to your business. The company may operate differently from the outside employer, so the relative will still need to learn its customers, systems, and culture. Keep the hiring process tied to the job description and give the candidate the same kind of interview and review that other applicants receive. The role should fit the company's needs, not be created solely to bring someone into the organization.
Make Joining a Clear Transition
If the relative joins, set their responsibilities, reporting line, goals, and authority in writing. Explain to the team how performance will be reviewed and who makes promotion decisions. This helps the new employee earn credibility through work and gives colleagues a clear way to raise concerns. A relative who has worked elsewhere should still begin with expectations that match the job, just as any employee would.
Outside employment is one preparation path, not a guarantee of leadership ability. Some candidates may need additional development or a different role. Give direct feedback and review progress against stated criteria. The family can also prepare younger members through structured exposure to the business, without promising them future positions. See ways younger family members can learn the business, qualifications for family members seeking a job, and how to assess readiness for leadership.
U.S. SFOs tend to hire professionals based on professional skills and experience.
Sources: The Single Family Office. Informational only, not financial, legal or tax advice.