The short answer: usually, no. Hiring your friends puts a brand new power dynamic on top of a relationship that was built without one, and most friendships don't survive the switch. Hiring people who could become your friends is a completely different story.
Some of my closest friends used to work for me. In October 2016, a hurricane hit Savannah head-on, and the employees who hadn't evacuated rode it out at my house for a week while the whole city shut down. A few of those people are still in my life today, and I'd open my door to them again without a second thought.
Now flip the order. Friends I had before they worked for me? I can count the ones that survived the job on one hand, and that hand is missing some fingers.
I've spent most of my career on the hiring side of the table, and of all the common hiring mistakes I see small business owners make, hiring friends is the one that feels the most reasonable going in. You trust them. You know their work ethic. You need someone yesterday and they need a job. It looks like the safest hire you could possibly make. It's usually the riskiest, and the reason is structural. It's not about who the people are. It's about what the relationship is built on.
Why hiring your friends is a bad idea: friendship and employment run on different rules
A friendship is voluntary. Nobody's keeping score. You show up because you want to, and nobody signs anyone's paycheck.
A job is the opposite on almost every count. There's a hierarchy. There's an exchange: you do the work, I pay you for it. There are performance reviews, deadlines, and goals that belong to the company, not to either of us.
This isn't just my read on it. Wharton researchers Julianna Pillemer and Nancy Rothbard laid it out in the Academy of Management Review: the four things that define a friendship (it's informal, voluntary, communal, and about emotional connection) sit in direct tension with the four things that define an organization (formal roles, obligations you can't opt out of, exchange, and business goals). Those aren't small mismatches you can talk your way around. They're load-bearing walls, and they're pointed in opposite directions.
You can take a power dynamic off. You can't bolt one on.
Here's why it works one way and not the other.
When an employee becomes a friend, the friendship grows inside the structure. You already know each other as boss and teammate, and you get to know each other as people on top of that. And a power dynamic can always come off. Someone resigns. Someone gets promoted out from under you. You sell the company. The scaffolding comes down and whatever you built together is still standing.
When you hire a friend, you're doing the reverse. You're taking a relationship with years of established rules (who picks up the check, who's allowed to be blunt with who, how y'all fight and how you make up) and forcing it to conform to a brand new set of rules overnight. One of you is suddenly in charge of the other's income. That's not a tweak to the friendship. It's a renovation of the foundation while you're still living in the house.
Promotions break friendships. Hiring a friend is the biggest promotion of all.
Patricia Sias, who has spent her career studying workplace friendships, found that promotion is one of five primary reasons those friendships fall apart, and the fallout included stress, people doing their jobs worse, and turnover.
Think about that. One friend getting promoted a single rung above the other is enough to break things between peers. Hiring your friend starts the relationship with one of you at the top of the ladder and the other at the bottom, before anyone has earned it in either direction.
And it doesn't stop at day one. Every promotion decision after that gets complicated too. Promote your friend and the rest of the team assumes it was favoritism. Pass them over and you've just had a performance conversation with someone who knows where you hid the key to your apartment.
The talk up front doesn't save you
I've had the conversation. Most founders who've hired a friend have had it. "Here's the risk. Here's what happens if it doesn't work out. Our friendship comes first." Everybody nods. Everybody means it.
Agreeing to a hypothetical is easy. Then the first real thing happens: you have to tell them their work isn't where it needs to be, or a project they love is getting cut, or they didn't get the raise. Nobody lied in that first conversation. You just can't consent in advance to a feeling you haven't had yet.
A 2016 study in Personnel Psychology found that relationships where a coworker is also a friend are more emotionally draining, largely because the two roles come with competing expectations and you're constantly deciding which one wins. Now make one of those people the other one's boss. Every single decision becomes a vote on whether you're their manager or their friend in that moment.
(Worth noting: the same research found that friendships formed at work actually help performance, because they build trust. That's the version that grows on the job. It's not the version you import.)
Every team talks shit about the boss. Your friend can't.
This is the part nobody warns you about.
Complaining about the boss is a rite of passage. It's how teammates bond. Nobody is a perfect boss, and no job is perfectly amazing all the time. I tell every new team I'm from the American South, I'm emotionally expressive, and I move fast enough that it might feel like I'm stepping on toes. I promise you I've been the topic at more than one happy hour, and honestly? Good. A team that has a little something to vent about together is a team that's talking to each other.
Now put your best friend at that table.
They have three options, and every one of them is bad. They can defend you, and instantly become the boss's spy. They can agree, either because they actually do or because it's the socially correct thing to say in that room, and then feel like a traitor at your birthday dinner. Or they can sit there quietly, which everyone reads as option one anyway.
You didn't just hire them. You signed them up for that exact awkward moment, on repeat, for as long as they work there. And the rest of the team is watching too. Every good review you give your friend is suspect. Every assignment they get looks like a favor. Rothbard has pointed out that when friendship cliques form at work, other people start to feel the system isn't fair. When the clique includes the boss, it's not a feeling. It's an assumption. It's probably the right one for the team to make. You don't want that.
You didn't sign up to be liked
Being the boss means making calls people hate. You will cut hours, pass someone over for a promotion, end projects, and occasionally let people go. I've said it before: you didn't sign up to be liked, you signed up to do the job and do it well.
With most employees, a hard call costs you something professionally. With a friend, it costs you twice, and the second bill is the one you can't expense.
I know this because I've made this mistake. I've lost friends I had years of fun and adventures with, not because either of us was a bad person, but because I didn't have the foresight back then to understand what I'm telling you now.
Other common hiring mistakes small business owners make
Hiring friends rarely shows up alone. It usually travels with a few other hiring mistakes that come from the same place: moving fast and trusting your gut over a process.
- Hiring for comfort instead of fit. Familiarity isn't qualification. Hire the scrapper who wants to learn over the person you already know.
- Skipping a consistent interview process. If you ask every candidate different questions, you end up hiring on personality. Friends skip the interview entirely, which is the extreme version of the same mistake.
- Promoting your best performer into leadership by default. Being great at the job and being great at managing people are different skill sets. A promotion should match the role, not reward loyalty.
- Posting a job before you know what it pays. Know your range before you hire anyone, friend or stranger. A vague number with a friend turns into an awkward negotiation fast.
What to do instead of hiring your friends
Hire for the job and let friendship happen after. My best friendships with former employees all came this way. The work came first, the respect came second, and the friendship had room to grow once the power dynamic came off.
Be their reference, not their boss. If a friend needs a job, make the introduction. Write the recommendation. Open the door somewhere else. You can do a lot more for them from outside the org chart than inside it.
If you're going to do it anyway (and in a two-person startup, sometimes you are), put everything in writing before day one. Have them report to someone else if you possibly can. Decide up front how raises and promotions will be handled so nobody's guessing. Define what happens to the job if it doesn't work out, and decide, out loud and together, what happens to the friendship. Then assume it'll be harder than that conversation made it sound, because it will be.
So, should you hire your friends? The friendship was there first. Protect it like it.
About Darby Cox
Darby Cox co-founded Smoke Cartel in 2013, ran its operations, and later served as CEO and Chairman of the Board, taking the company public and leading its acquisition in 2021. She then ran Cox Consulting, advising small and mid-sized e-commerce businesses on operations, growth, and technology. Today she helps founders build teams that work, and she's writing a book on exactly that, The Team You Build.
Building your first team, or cleaning up after a few hard lessons? Book a call with Darby.