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Turning side hustles into business benefits

Employee side hustles can be a double-edged sword for businesses. While some side gigs enhance skills and productivity, others may distract from primary job duties. What's really happening?

Suzanne Lucas
Suzanne Lucas

Suzanne, the Evil HR Lady, shares expertise, guidance, and insights based on 10+ years of experience in corporate human resources....

side hustles

You want your employees’ undivided attention during their working hours. That’s fair–albeit unrealistic. (The amount of time employees waste every day is estimated at wildly different numbers.

One survey said employees in the office waste 4.26 hours per week, while work-from-home employees waste only 2.5 hours per week. Another survey determined that people waste 2.09 hours per eight-hour day.)

But what about their time outside of work? Are their side hustles taking up too much time? Is it detracting from their productivity? Is it creeping into their working hours and cutting their productivity?

The answers to all these questions is the same: It depends. Of course, there is no one answer to how a side hustle affects employment for any particular employee. But generally? Think through this.

Side hustles aren’t new

While the term may seem new, it first appeared in 1958, describing a “church-going Scoutmaster” who told fortunes with a crystal ball–on the side, which is a delightful side hustle if you’ve got to have one.

But certainly, the fortune-telling Scoutmaster wasn’t the only person who earned extra money on the side. That probably goes back to the beginning of boss-employee relationships. 

A new survey found that one-third of Americans have side hustles. The average side hustle brings in $891 a month and the person started it two years ago. But that’s an average total–75 percent of side hustlers earn less than $500 a month. In other words, this is a significant source of income for some, but 25 percent of people earn $50 or less.

  • 37% of side hustlers agree they use at least some of their side hustle income to fund discretionary spending; 
  • 36% use at least some to pay for regular living expenses; 
  • 31% save at least some and 20% use it to pay down debt. 

Depending on your state law, you may or may not be able to limit your employees outside work. For instance, you could generally prohibit people from conducting side businesses that competed against your business, but the proposed and stalled FTC ban on non-competes may eventually prevent you from stopping your employees from competing against you.

You can almost assuredly prohibit your employees from working on side hustles while they are on the clock in all states.

Should you worry about your employees’ side hustles?

There are so many things that divide attention. If it’s not selling jam at a farmer’s market, it may be dealing with an aging parent, an obsession with the gym, or binge-watching all 20 seasons of Grey’s Anatomy.

For the most part, you do no need to worry as long as it’s not affecting an employee’s performance at work. Ensure you have a no-solicitation policy so your employees can’t sell their products or services to other employees. (Sadly, this will also affect people’s ability to sell their daughters’ Girl Scout cookies.)

If it does start to affect their work, then you deal with it as you would any performance problem: through discussions and potentially a performance improvement plan.

Don’t focus on the side hustle. The problem isn’t that Jane is teaching yoga classes in the evening. The problem is that Jane spends a good portion of her day looking at yoga classes on YouTube and leaves early to get to her classes.

The problem isn’t that Carol is building a coaching business. The problem is that Carol is taking client calls during the day and hassling her coworkers about taking her services.

The problem isn’t that Steve is selling bitcoin. The problem is that Steve isn’t getting his work done on time.

Focus on the performance issues, not the side hustle. A performance improvement plan with clear requirements will solve this problem–either your side hustler will get back to work, or you’ll terminate them if they fail the PIP.

Can side hustles benefit your business?

Yes! Do they all? No. But some can, so don’t approach them with a negative attitude. Your employees who are trying to earn a little (or a lot) of extra cash on the side are learning new skills.

Companies often say they want people with new ideas who can think outside the box. Side hustles often teach people those skills. It’s hard work to build a business. If you treat your employees correctly, you can help them apply their newfound entrepreneurial skills in your business–and of course, they should be rewarded financially for their additional contributions through bonuses or raises.

Speak to your employees about their side hustles. Ask how you can help them–even if you think that means helping them quit sooner. The average tenure at a company is around four years. Your employees aren’t staying forever, side hustle or not. Working with your employees and not fighting their side hustles are likely to benefit you both.

Of course, that doesn’t mean letting their performance drop. Keep communication open and make sure they understand that they still need to do their work for their day job.

Rather than worrying about the side hustles, focus on making your business a good place to work and focusing on employee performance and engagement. Don’t be paranoid or try to control your employees’ off-hours endeavors. It won’t help your business or your employees.

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