Employee Satisfaction: Should You Support Your Staff’s Side Hustles?

The era of hybrid working that was ushered in by the global pandemic – coupled with the cost of living crisis – means side hustles have never been more popular. It allows your staff to further engage with a hobby or a passion, which can greatly contribute to your business’ employee satisfaction.

The extra income side hustles generate can be quite substantial and therefore very alluring: according to data gathered by website builder GoDaddy, UK side hustlers earn £18,200 per year on average – with top earners (around 5%) bringing home more than £100,000 per annum.

However, you might wonder if supporting side hustles is beneficial to your venture overall, or if it might negatively impact your staff’s productivity. Investing in top project management software can help you avoid potential workflow-related issues, but others, such as reputational damage and conflict of interest, can be thornier to tackle.

If you’re on the fence about this topic, we’ll go over some of the latest side hustle statistics, the benefits and drawbacks of supporting your employees’ entrepreneurial side, as well as some tips on how to manage your staff when side gigs are involved.

Side hustle statistics

Side hustling – also known as moonlighting or freelancing – is taking up an activity or business outside of your main job, which generates extra income or has the prospect of doing so.

Unsurprisingly, considering the extra income they can generate and the effect of the UK’s current inflation rate on employees’ finances, a recent study found that nearly three out of four British workers have a side hustle or are considering starting one.

Younger generations are more likely to venture out of the 9-to-5, signalling a major shift in behaviour that employers should be aware of.

According to a report by Deloitte, 42% of Gen Zs and 39% of millennials in the UK have taken on a side hustle. Importantly, while they’re feeling the pinch just like other generations, they’re also driven by a desire to invest in their passions and become more versatile workers.

While the advantages for employees may be clearer, this is not necessarily the case for employers. You could have legitimate concerns that it might impact productivity, or even foster competition for your business from within your own ranks.

While these risks are real, there are also potential opportunities that business owners could benefit from by supporting the side hustles of their employees. For a full picture, we cover the pros and cons below.

The benefits of supporting your employees’ side hustle

Supporting your employees’ side hustles could lead them to develop transferable skills as well as improve their overall wellbeing and financial security. It can also have a positive impact on your business’ reputation.

Upskilling your employees

By venturing out on their own with their side hustle, your employees have an incredible chance to upskill and they can bring their learnings into the job you hired them for. This can be seen as very low-cost training.

According to a report by the Henley Business School, the most common UK side hustles are “craft businesses, book writing, stock market investments, buying/selling online, and blogging/vlogging” – all of which can lead to your staff picking up entrepreneurial or creative skills that they can bring use in the office.

Caring for your staff’s wellbeing

Merchant account provider, SumUp, reported a whopping 73% of British side hustlers are doing so to fulfil a passion, with 69% of those hustlers surveyed in the study saying their second job adds value to their life and makes it more interesting.

Allowing your employees to engage with a passion is a surefire way to improve their wellbeing and, therefore, your employee satisfaction as well. According to a study, the empowerment your staff can get from running a side hustle can enrich their full-time work experience.

Increasing your staff’s financial security

The cost of living crisis is making it harder for people to afford essentials or pay their bills. As reported in July 2023, 13 million adults are struggling to pay their bills in the UK. Side hustles can provide your employees with much-needed extra cash in this scenario, boosting their financial security. Furthermore, showing that you care about their income levels is one of most impactful ways of showing employee appreciation.

Another side effect of this is that you could also end up reducing your hiring bias: if you’re transparent about the possibility of side hustles in your selection process, you open the door  to people who can contribute a lot to your company, but who are also looking for more than the salary you’re offering to pay. They may be willing to take the job in return for being given freedom to pursue supplementary streams of income.

Bolstering your business reputation

Being open about the benefits of side hustles and your support for their ventures can yield great results when it comes to bolstering the reputation of your business. It can help you be seen as a true supporter of your employees – a company value that could lead to more sales.

Overall, in the current market, positive values – such as DEI and business sustainability – tend to sway potential customers. More than half of respondents to a recent survey said they’re likely to buy from a company that shares their values.

Keeping up with an ongoing trend

Around 33% of UK adults have a side hustle, and the current data suggests that side hustling isn’t going away. In fact, it’s likely to grow considerably in the next few years, with the Henley Business School expecting this figure to grow to 50% by 2030.

Establishing yourself right now as a business that supports side hustles can help you stay competitive and get ahead of the curve, attracting – or retaining – employees who are looking to benefit from a side gig.

The drawbacks of supporting your employees’ side hustle

For all its pros, supporting the side hustles of your employees can also present some cons. You’ll need to have firm conversations and put arrangements in place to avoid a dip in your staff’s productivity, reputation issues, internal competition, and employee burnout.

Low productivity

With a whole set of goals and tasks separate to their main job occupying your employees’ headspace, there’s a risk that they shift internal focus to their side hustle instead.

This could present itself in many ways: Your staff may not put in any extra effort into their main job to save it for the side gig, or they do activities for their side business while on the clock.

Unfortunately, the latter isn’t far-fetched. 45% of respondents of a survey conducted in the US admitted to having done this. That said, you can counter this with a strong project management tool that allows you to monitor the output of your employees.

Internal competition

With your company working in a particular field, any of your employees will have a strategic business advantage should they decide to venture into the same field on their own.

If they choose to have a side hustle that offers a product or service very similar to your own, you could end up employing a competitor that has potential access to your business plans, client list, supplier contacts, and so on.

While this situation breaches the duty of fidelity required by common employment law and can easily lead to the employee’s dismissal, some commercial damage might already have been done by the time this course of action is taken.

Reputational issues

Depending which side hustle your employees go for, you’ll have to be mindful about potential reputational issues for your company, as you do have a brand image to look after. Avoiding being associated with side hustles considered racy or controversial may require difficult conversations and even dismissals.

 

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Burnout risk

According to the Henley Business School, 45% of side hustlers work over 40 hours per week between all their jobs, with 25% of them even surpassing 50 hours per week. Understandably, despite the passion and the drive involved in a second gig, the amount of extra work in this scenario can lead to burnout.

Because employers have a duty to monitor working time, you can also chance being legally responsible for this overwork. As per The Working Time Regulations 1998, an employee cannot work more than 48 hours per week on average, unless they expressly opt-out from this legislation, or their work is one of the exceptions to this rule listed in the law.

How to manage employees with side hustles

The key to managing employees with side hustles is to clearly establish what’s acceptable and what isn’t when it comes to them pursuing their own side venture. The most effective way to do so is by including side hustle-related clauses to your employment contract, as well as having a side hustle policy.

This is very important because the law doesn’t prohibit anyone from having more than one job, nor does it require that employees disclose their other jobs to their main employers. Considering this, if you’re keen on knowing this information so you can discuss the side hustle T&Cs with your employees, you must add a disclosure requirement to their contract.

While you technically can include clauses that ban side hustles in your employment agreement, most companies don’t tend to take such a hard stance. What they do is limit what can be done as a side hustle, including clauses that forbid data sharing, conflict of interest, and use of intellectual property in the contract.

For its part, a side hustle policy can help clarify matters. In it, you can state how employees can promote their side hustle, whether they can work on their side venture while on the clock, and if they can use company workspaces and laptops when working on their second gig.

Supporting your employees’ side hustle: final thoughts

Supporting the side hustles of your employees will come with its own sets of rewards and challenges. There have been several studies over the years that point to the correlation between side hustles and a workforce that’s more skilled and satisfied. On the other hand, some data findings and case studies suggest a risk of staff fatigue and reputational damage.

Regardless of your stance, the main takeaway is to have an open channel of communication with your employees and establish the rules in advance, so neither side is caught by surprise or thinks they’re being treated unfairly.

If you’re supporting your staff’s side gigs, be clear about the extent of your support as well as what actions represent a breach of contract. Otherwise, explain why that’s the case – especially considering the current economic climate – and if possible, allow for arrangements on an individual basis.

After all, regardless of whether it’s within your powers to help your entrepreneurial employees, it’s in your best interest to make them feel heard.