HR Tips & Answers

How does your business deal with employee ‘side hustles’

Side hustle’ describes work individuals do in addition to their primary employment.

Have you noticed that some of your employees have taken on a 2nd or even 3rd job to keep up with increased living costs of late?  Or are they chatting about their Tik Tok presence or selling online services?

The rise of  the ‘side hustle’, also known as freelance work or ‘gig economy’ jobs is now impacting on businesses and their HR management processes. How would you handle this?

The appeal of better work/life balance and more workplace flexibility has led many to look for other income streams while still keeping their primary job, hence the rise of the ‘side hustle’ and the ‘gig economy’.

Why is there a surge in employee ‘side hustles’ and the ‘gig economy’?

Firstly, the ‘gig economy’ which consists of mainly temporary and short-term service positions and fuelled by platforms such as Uber, Airbnb, and Upwork, has made it easier for individuals to find freelance work and make money from skills they may have or other services they can provide.

Economic concerns resulting from the COVID-19 pandemic has also motivated people to search for multiple incomes as a means of financial security.

In September 2022, the Australian Bureau of Statistics (ABS) revealed that more than 900,000 Australian workers – that’s 6.5% of the workforce – held multiple jobs during the June quarter. This marks an increase of 4.6% since the previous quarter and is the highest recorded rate since the quarterly series began.  [1].

This shift in culture has meant that employees are increasingly looking for employers who will support them in their alternative endeavours!  Passion, stability and motivation are no longer the buzz words for employees they’ve been replaced with flexibility, work/life balance and personal aspirations.

As a result there is added pressure on business to adapt their policies and procedures to attract and retain quality employees while also ensuring the business’s interests are protected.

Businesses that fail to recognise and accommodate the changing expectations of employees may find themselves unable to win the contest for those skilled employees.

By embracing flexibility, fostering work/life integration, and investing in upskilling initiatives, companies can navigate the side hustle phenomenon and leverage its potential for mutual benefit.

It’s vital that HR departments understand the pros and cons of their employee’s side hustles.  What do they bring to the business and what are the drawbacks?  The traditional view that employees should only have one job and one job only, is now an ‘old world’ view that can be detrimental to business in today’s changing world.

Talk with your employee about their side hustle and about what new skills or innovative ideas they may have learned as part of it and look at whether they be introduced into or used to enhance your business.  This can be an important part of engaging your employees  to look at ways to improve performance and ultimately provide reward to all.

But you also need to be aware of and carefully consider any complications that might arise!

For example:  Does your employee’s side hustle compete directly with your business? Does it conflict with your business’s values and principles?  Is there a potential for privacy, confidentiality or intellectual property violations?  How is your employee going to maintain their commitment to you as their primary employer and will it affect their performance or safety?

Any or all of these have the capacity to affect a business’s reputation, productivity and ultimately their bottom line.

What can you do to ensure that your employee understands and complies with their obligations to your business while pursuing a side hustle?

Be PROACTIVE!

Make sure that your policies, procedures and process are up to date and provide employees with clear guidelines about additional employment, communication and conflict resolution will assist your business to minimise any harmful impacts. Make sure that they address the legal and ethical consequences of side hustles.

Review your policies on work/life balance, fatigue management and workplace flexibility; are they robust enough to comply with all the recent legislative change, meet your business requirements and  manage employees with a side hustle?

It’s important to strike a balance so that your employees know that they can come to you and let you know about their ‘side hustle’ and feel free to have those open and frank discussions about potential issues.  It’s also important to look objectively at the extra skills they may bring to your business – remember a ‘side hustle’ can have a silver lining not just a big black cloud!

[1] ABS Statistics 13/07/2023
Published: Tuesday, July 18th, 2023
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