November 19, 2025
When you’re starting a business, hiring people you already know can feel like the most natural decision in the world. Your mates are familiar, so, of course, you trust them. You already understand each other.
It may feel easier than advertising a role and interviewing strangers. Many entrepreneurs convince themselves that bringing in friends can save time and effort when creating an early team dynamic.
However, hiring your mates is rarely as straightforward as it seems. A friendship doesn’t automatically translate into professional compatibility. Besides, the informal nature of the relationship can lead to complications you didn’t anticipate. Ultimately, businesses need clarity, structure, and objectivity, three things that friendships can unintentionally undermine.
Friendships are built on trust, shared history, and unwritten rules. In business, however, none of these replaces the need for clear expectations and professional boundaries. When you hire a mate, the lines between personal and professional begin to blur almost instantly.
It can become hard (if not impossible) to have conversations about performance with someone who’s part of your weekend plans. You may be tempted to let issues slide rather than creating tension between you.
Additionally, professional decisions can also become complicated. If one of you challenges the other, it can feel like a criticism of the whole friendship rather than addressing a work issue.
When you hire a friend, work conversations can feel casual. You get to agree on hours over text, settle on pay over a chat, and assume they know what to do because they’ve been around you for a long time.
But this informality is the enemy of business. You need a clear, written employment contract for any new hire, and arguably even more when the employee is a friend. It specifies responsibilities, working hours, notice periods, holiday entitlement, pay details, etc. When this document is missing, everything becomes open to interpretation.
In the event the friendship sours, the lack of a formal agreement can turn it into a messy situation.
Just because someone is reliable on a night out or has a great personality does not mean they have the skills and experience the role requires. Startups in particular need people who can hit the ground running, handling responsibilities and adapting quickly.
This is why businesses use employment screening services to verify experience, check qualifications, and assess suitability for a role. When you skip this process with a friend, you’re effectively relying on guesswork. You may know their personality well, but you don’t necessarily know how they perform under pressure, how they handle accountability, or whether they can work to a professional standard.
Hiring based on friendship rather than competence can weaken your business foundation right from the start.
Even when you try to be completely fair, hiring a mate almost always results in some form of preferential treatment.
You may naturally give them more flexibility with deadlines or overlook certain mistakes. These small differences add up quickly, and your team will see them before you do.
Favouritism is one of the fastest ways to erode morale. This creates resentment, lowers motivation, and can cause talented staff to disengage. More importantly, it can be difficult to address. Your friend may not be ready to give up on some of the perks they’ve received, while employees may wonder what justifies their benefits.
When you hire someone you’re close to, it’s easy to fall into the habit of sharing more information than you should. You’re used to talking openly with them, and because you trust them on a personal level, you may not think twice about giving them access to data that a typical new hire wouldn’t see. But personal trust and professional trust are two very different things.
A mate brought into the business might be handed sensitive data like passwords, financial details, or client information simply as a natural consequence of the relationship they have with you. This is where it can get problematic. They may not have signed formal confidentiality agreements or been trained in handling sensitive data.
Even if they would never intentionally misuse information, accidental disclosure or carelessness can be just as damaging.
When employees feel that decisions are influenced by friendship rather than fairness, they quickly lose confidence in the workplace. Hiring a mate can unintentionally send the message that progression, recognition, and opportunity are tied to personal connections instead of performance.
High-performing team members may begin to wonder why they should put in their best effort if promotions or desirable responsibilities ultimately go to someone who happens to be close to the founder. Others may simply decide that the environment isn’t worth the frustration and will look for roles where their work is valued.
When a close friend joins your team, things can get pretty awkward. That's because they're buddies with you, so they think they can speak up a lot more freely about their opinions and challenge your calls. Now, while this can be part of a healthy input in business, it can gradually create confusion.
A friend may, with the best intentions, be making assumptions about your plans or jumping in to override procedures just because they think they know you better. Even if they're coming from a good place, it can still lead to confusion and disruption.
When hiring decisions are driven by who you know rather than what you genuinely need, your business misses out on tapping into a diverse range of skills that could better support growth.
There's also a very real sales and networking problem. If your business becomes too reliant on your friends' support, it can limit your market reach.
Yes, your mates might do some informal promoting of your company, but this isn't a long-term plan for growth. Once those personal connections lose interest, move on, or change their own priorities, the flow of opportunities just dries up.
Even if your old mates are still keen to help out, relying on this network means your team is not going to develop the skills they need to land new clients.
The bottom line: if you are considering hiring a friend, you want to make sure that this is the right fit for your business, not for your personal connections.
While it seems convenient, hiring a friend is risky. The potential for blurred boundaries, favouritism, and skill mismatches often outweighs the initial comfort. If you proceed, ensure they are genuinely the best candidate and establish a formal contract and clear professional boundaries from day one.
The most frequent issue is the blurring of personal and professional lines. It becomes incredibly difficult to give constructive feedback, manage performance, or make tough business decisions without damaging the friendship, which can harm both the relationship and the company.
It can seriously damage team morale. Other staff members may perceive favouritism, even if you try to be fair. This can lead to resentment, reduced motivation, and a feeling that hard work isn't valued, potentially causing your best employees to leave.
Absolutely. A formal, written employment contract is even more critical when hiring a friend. It clarifies responsibilities, pay, hours, and notice periods, protecting both your business and your friend if disagreements or professional issues arise later on.
Yes, it can. When you only hire from your personal network, you miss out on the diverse skills, experiences, and perspectives that new people bring. This can create an echo chamber and limit your company's ability to innovate and expand into new markets.
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