The pros and cons of working with friends

Working and hiring friends can be fraught with both personal and professional challenges, but it can also bring great rewards if it works. Penny Pryor speaks with three executives - Ben Griffiths & Brian Eley from Eley Griffiths (pictured) and SuperRatings founder and chair, Jeff Bresnahan - about their lessons learnt when crossing the friend/colleague line.

Financial services is a relatively small industry and many people make friends with colleagues, which means there may also come a time when a friend's resume makes its way across a desk for a new position.

Often problems occur when friends have no idea about each other's work practices or habits, or perhaps they get the personal entangled with the professional, or they may not be able to deal well with a friend, who is socially on an equal footing, being in a managerial position.

Here at Industry Moves, our two directors are friends About Us, but they have also been colleagues before - and were colleagues before they were friends - which means each knows how the other operates in a work environment and they understand the parameters.

"...money ruins everything and that quite often comes home to roost when you hire friends and you need to manage expectations." Jeff Bresnahan, SuperRatings

Jeff Bresnahan, founder and chairman of SuperRatings, says he makes it a practice not to employ friends.

"I think ... money ruins everything and that quite often comes home to roost when you hire friends and you need to manage expectations," he says.

"I've never sort of leapt towards doing that. I just think it's fraught with danger and obviously you've got to hire people on merit."

But he makes the differentiation between hiring friends and hiring former colleagues who have become friends.

"As you go through your career you develop friendships with staff and clients and ... there is a very fine line between friends across the industry."

Although many companies advertise and use headhunters to fill positions, often the difference between getting past the first step in the hiring process is a kind word from a former colleague or acquaintance.

"It is actually quite good when you've got a really good network of friends and colleagues across the industry," Bresnahan says.

"I think what makes it work is two individuals of like mind, two individuals of about the same position and standing and level in their careers." Ben Griffiths, Eley Griffiths

Co-founder of small cap fund manager Eley Griffiths, Ben Griffiths, has gone into business twice with friends. His first venture, with a very close friend, taught him a lot about what was important in seeking a business partner.

"I had a bit more rigour and discipline and started off with a set of principals and I wanted to be very business like from the opening bell and that didn't sit very well with [my] more flamboyant partner," he says.

The two mates are still close friends but have since sold the business, after they both realized they had different priorities.

With Brian Eley, co-founder of Eley Griffiths, the pair started out as colleagues and then become friends. Before starting at Eley Griffiths they had managed small-cap funds at ING, and then at BT Investment Management.

"I think what makes it work is two individuals of like mind, two individuals of about the same position and standing and level in their careers," Griffith says.

"I think certainly professionally and probably financially we're [Brian and I] probably around the same sort of levels."

He says that for a partnership to be successful, you have to be able to enjoy your co-workers' company but also not shy away from difficult business-related issues.

"At the end of the day you do have to enjoy one another's companies. You do have to get on as mates," he says.

You also have to be able to have the hard discussions, so if you don't think you'd be able to have 'that' talk with a friend in your employ, perhaps you might want to think twice about whether to offer them a job in the first place.