{"id":14750,"date":"2022-09-01T16:59:54","date_gmt":"2022-09-01T16:59:54","guid":{"rendered":"https:\/\/www.shrm.org\/hr-today\/news\/hr-magazine\/fall2022\/pages\/how-to-handle-employee-side-hustles-.aspx"},"modified":"2022-09-01T16:59:54","modified_gmt":"2022-09-01T16:59:54","slug":"how-to-handle-employee-side-hustles","status":"publish","type":"post","link":"https:\/\/squarehr.com\/index.php\/2022\/09\/01\/how-to-handle-employee-side-hustles\/","title":{"rendered":"How to Handle Employee Side Hustles"},"content":{"rendered":"

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?When an information technology specialist at Enertech began missing deadlines and sleeping at his desk, it was the first time in her lengthy HR career that Jennifer Weber had to put an employee on a performance improvement plan because of a side hustle.<\/p>\n

Rather than focusing on his work, the employee was putting all of his energy into making and selling barbecue sauce. <\/p>\n

 \u201cWe got complaints that all he did was talk about his outside job,\u201d says Weber, HR assistant at Enertech, which builds energy-efficient products in Mitchell, S.D. This interfered with the employee\u2019s job duties and disrupted his co-workers. <\/p>\n

\u201cIn my 20-plus years in HR, I don\u2019t ever remember having to sit down and talk to someone\u201d about a side job, Weber says. She had to tell the employee, \u201cWe need you here 100 percent, dedicated to our business 100 percent.\u201d<\/p>\n

While Enertech isn\u2019t opposed to employees having side gigs, \u201cit\u2019s important for organizations to care about side hustles because you don\u2019t want the side hustles to interfere with your company\u2019s goals,\u201d Weber says. <\/p>\n

Greater Flexibility<\/p>\n

The rise of remote work during the pandemic and employees\u2019 ongoing desire to have more-flexible hours may be complicating factors for employers that are concerned about employees paying attention to their side hustles when they should be focusing on their full-time jobs.<\/p>\n

\u201cIt\u2019s probably more of a problem than it has been in the past,\u201d says Timothy Ford, a partner with law firm Einhorn Barbarito in Denville, N.J. \u201cThere\u2019s not as much continuous oversight of an employee as there maybe once was.\u201d<\/p>\n

The percentage of employees who report having side hustles has increased in the past 18 months, to 40 percent in May 2022 from 34 percent in December 2020, according to a survey<\/a> of 2,032 U.S. workers conducted by The Harris Poll on behalf of Zapier, a workflow automation technology provider with a fully remote workforce.<\/p>\n

In some cases, it\u2019s not just a side hustle but rather a second job that divides an employee\u2019s attention. An October 2021 survey<\/a> by ResumeBuilder.com found that 69 percent of 1,250 fully remote U.S. workers had a second job. Perhaps surprisingly, 37 percent had two full-time jobs. The other 32 percent held a part-time position in addition to a full-time gig.<\/p>\n

For those with two full-time jobs, 45 percent were working their second job remotely and 23 percent were working a hybrid schedule. Some people take on a side job for enjoyment, but half do so out of financial necessity.<\/p>\n

\u201cCompany loyalty and dedication are important, but so is earning a living,\u201d says Kate Walker, SHRM-SCP, who left full-time employment in 2021 to start her own executive coaching business.\"Screen<\/p>\n

Employees may need to work multiple jobs to make ends meet due to steep inflation and high gasoline prices, she says, or to cope with an unexpected financial setback, such as a divorce.<\/p>\n

Remote and hybrid work schedules have eliminated or reduced commuting times, which can create more flexibility for people to dedicate extra time to other paid pursuits, Walker says.<\/p>\n

And as employees have become more accustomed to working remotely, they\u2019ve been able to get work done more efficiently, which allows them to increase the quantity of work they produce, she says.<\/p>\n

Walker started establishing her coaching business while holding down a full-time job, taking evenings and weekends to set up the venture. <\/p>\n

\u201cI knew I had to depart my corporate job before doing any marketing,\u201d she says.<\/p>\n

She launched her business for myriad reasons, including the ability to have more-flexible hours, to work from home all the time, to pick and choose her projects and clients, and to earn more money.<\/p>\n

\u201cThe ego wants us to stay safe and take the path of least resistance,\u201d Walker says, \u201cso pursuing something new takes a great deal of planning, courage and mindset work.\u201d <\/p>\n

The Wall Street Journal <\/em>reported in August 2021 that some white-collar workers are juggling two full-time remote jobs on the sly. They find encouragement through the website Overemployed, which advises remote workers on how to manage multiple jobs.<\/p>\n

Stacie Haller, a career coach, says the people she knows who work two full-time jobs aren\u2019t putting in 80 hours a week. She suspects that those who do probably are low-wage earners or facing financial difficulties. <\/p>\n

If someone is working two lower-earning jobs in fields such as retail or hospitality, managers shouldn\u2019t try to dissuade this, as long as it doesn\u2019t interfere with the individual\u2019s work performance, Haller advises.<\/p>\n

That\u2019s particularly true right now, she says, when organizations are concerned about retaining talent.<\/p>\n

If a remote employee sets up two computers at home and works for two different companies simultaneously, that can violate the terms of their employment, Ford says, but it could also be difficult for a company to detect. <\/p>\n

Some employees who work from home \u201ccan be doing anything on any given day at any given time,\u201d says Brooke Colaizzi, an attorney with law firm Sherman & Howard in Denver. As a result, it\u2019s important to set strong expectations about job performance and hold employees accountable for meeting them, Colaizzi says.<\/p>\n

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Pros and Cons<\/p>\n

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Contrary to what some might think, employees can feel empowered and energized from their side hustles, a recent study <\/a>found.<\/p>\n

By being in charge of their own side jobs, such as driving for Uber or selling merchandise on Etsy, people can be \u201cmicroentrepreneurs without risk,\u201d working when they want, where they want and how they want, says Hudson Sessions, an assistant professor of management at the University of Oregon and lead author of the study published in the Academy of Management Journal<\/em>. <\/p>\n

A side hustle can provide an employee with fresh routines and help them build new skills, Sessions says, and the sense of empowerment that comes from working a side hustle often generates \u201cgood feelings that tend to flow and spill over\u201d into their full-time jobs. It also can enhance their workplace productivity. <\/p>\n

Rather than setting strict policies regarding side gigs, \u201ccompanies would do well to back off and let employees self-regulate,\u201d Sessions recommends.<\/p>\n

However, the research also showed that those with enjoyable, meaningful side hustles \u201ctend to be a bit more distracted in their full-time jobs,\u201d Sessions says. As a result, their performance may slip slightly. <\/p>\n

\u201cThey have a little bit less of themselves available for their full-time job,\u201d he adds. \u2014S.L.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Performance Matters<\/span><\/p>\n

There\u2019s no guarantee that an employee who works onsite will put more effort into their primary job than their side hustle.<\/p>\n

At Enertech, the company received complaints that the IT employee with the barbecue sauce business spent his work hours promoting his product and networking on social media\u2014and even stopping workers on the company\u2019s production line so he could chat about his business, Weber says.<\/p>\n

The company\u2019s employee handbook says workers are expected to give 100 percent of their effort to the job, and if management thinks outside employment is interfering with an employee\u2019s ability to do that, the employee will be asked to resign from Enertech or halt their outside employment. <\/p>\n

\u201cWe never want to deny anybody the chance to have their own business,\u201d Weber says. <\/p>\n

The IT employee\u2019s manager collected information on the deadlines the employee had missed and the work he had failed to complete before sitting him down for a talk. The company gave the employee more duties to help keep him busy during the workday and said it was fine if he talked about his business during break times, but not all day long.<\/p>\n

There haven\u2019t been any recent complaints from co-workers, Weber says.<\/p>\n

Mahrukh Khawaja, SHRM-SCP, HR director at Diversified Brokerage Services Inc. in Minneapolis, dealt with a similar situation when a marketing specialist at the company started a business making dog collars. The employee began missing deadlines and failing to complete her work. <\/p>\n

Her manager checked the employee\u2019s Internet history and found she was working on her side hustle and spending time on dog-related websites rather than attending to her full-time job, according to Khawaja. \u201cWe had the evidence,\u201d she says. \u201cShe was selling dog collars all day. In this day and age, anyone can check what you\u2019re doing.\u201d<\/p>\n

The employee was fired and applied for unemployment benefits, but her request was denied. After initially contesting the decision, the worker decided before the next hearing not to pursue the issue, Khawaja says.<\/p>\n

She explains it\u2019s important to have a policy in a company\u2019s employee handbook stating that side hustles can\u2019t interfere or conflict with the worker\u2019s main job.<\/p>\n

\u201cI think it all comes down to performance,\u201d she says. \u201cIf an employee is paying attention to their side hustle more than the job they\u2019re being paid for, then there is an issue.\u201d<\/p>\n

At Diversified Brokerage Services, a lot of employees have side hustles, Khawaja says, including the company\u2019s marketing director, who grows and sells vegetables, and another employee who is a beekeeper and sells honey. As long as their performance is not affected, Khawaja says, all is well and good.<\/p>\n

\"iStock-1189508259.jpeg\" <\/p>\n

Create a Policy?<\/p>\n

Paycor, an HR software company based in Cincinnati, has adopted a minimalist approach to regulating employees who take on side jobs.<\/p>\n

\u201cI don\u2019t think trying to control it, trying to put stringent rules around it, necessarily works,\u201d says Nathan Peirson, Paycor\u2019s senior vice president of talent and employee experience. <\/p>\n

Instead, the company, which has about 2,200 employees, aims to \u201ctreat people like adults,\u201d Peirson says. \u201cWe trust them.\u201d<\/p>\n

Rather than having a policy specifically addressing side hustles and moonlighting, Paycor has a conflict-of-interest policy stipulating that an employee can\u2019t take a second job that \u201cdirectly competes\u201d with their responsibilities at Paycor, he explains.<\/p>\n

As an example, the company would be concerned about an employee who works in Salesforce training and also provides sales training consulting on the side. \u201cWe would have a discussion about it,\u201d he says.<\/p>\n

Though the company tends to be relaxed about people having side gigs, if someone had two full-time jobs, \u201cthat would be problematic,\u201d Peirson says.<\/p>\n

\u201cCould it happen? Yeah,\u201d he admits, because when employees work remotely, there\u2019s more flexibility and less visibility. Post-pandemic, \u201cwork lives and personal lives are all merged together,\u201d he says.<\/p>\n

Still, if employees are distracted by side hustles, \u201cit\u2019s going to show up somewhere,\u201d Peirson says, noting that Paycor measures worker performance based on outcomes.<\/p>\n

For certain jobs in certain industries, working for a competitor isn\u2019t necessarily an issue. Ford says it\u2019s not uncommon for nurses and other health care employees to work full time and then have another full-time or part-time nursing job on the side.<\/p>\n

In those cases, \u201cyou probably don\u2019t need a policy for all employees, just ones at certain levels,\u201d Ford says.<\/p>\n

\"Screen<\/span><\/p>\n

Chad Sorenson, SHRM-SCP, president of Adaptive HR Solutions in Jacksonville, Fla., recommends that most organizations have a policy at least addressing which organizations their employees can\u2019t work for, such as competitors, and specifying that side hustles can\u2019t interfere with their primary job.<\/p>\n

However, Sorenson cautions, \u201cthe more rigid you get, the more people keep [their side gigs] under wraps.\u201d<\/p>\n

An organization may want to make clear that employees should avoid scheduling conflicts between their primary and second jobs and that the second job shouldn\u2019t affect the employee\u2019s performance, he says.<\/p>\n

If someone is trying to juggle two jobs and is always tired at work as a result, \u201call of a sudden there are job performance and work performance issues,\u201d Sorenson says.<\/p>\n

Working a side gig \u201ccan certainly divide employees\u2019 attention and divide employees\u2019 time,\u201d so it\u2019s important to lay out expectations, says Colaizzi, who advises that organizations explain their policies in writing. <\/p>\n

Generally, handbooks have gotten too long and too unwieldy, she says. Instead, she recommends having a stand-alone policy, easily accessible online, that employees can acknowledge and sign when they\u2019re hired.<\/p>\n

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A Way Out?<\/p>\n

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In some cases, taking on a side hustle may be a way for people to \u201cinch their way out of the organization,\u201d says Chad Sorenson, SHRM-SCP, president of Adaptive HR Solutions in Jacksonville, Fla. \u201cPeople are looking for the next thing. They could be testing the waters.\u201d <\/p>\n

That\u2019s what happened with Sana\u2019 Walker, SHRM-CP, who, after a decade working for other organizations, now owns and operates the website HR Girlfriends and offers HR consulting and training services. <\/p>\n

She took over the site in 2013 while working a full-time job. The side gig was \u201ca passion project,\u201d Walker says. But she knew it could be more, so she spent her days focused on her full-time job and her nights and weekends developing the site, which provides support to women in HR looking to grow personally and professionally.<\/p>\n

In 2020, she \u201ctook a leap off the W-2 road,\u201d quitting her full-time job to focus solely on the site. <\/p>\n

\u201cIt seems very sexy to be your own boss, until you are your own boss,\u201d says Walker, who charges people to become members of the site and also supports the venture with money earned from her training and consulting work. <\/p>\n

But she has no regrets. <\/p>\n

For others in HR who are thinking of parlaying a side gig into a full-time business, Walker\u2019s first recommendation is to create a business plan. <\/p>\n

\u201cIt helps you think of all the components required to be successful in business,\u201d <\/p>\n

she says. \u2014S.L.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Go With It<\/p>\n

By day, Paige Hackathorn works as a recruiter for Natural Grocers, a Lakewood, Colo.-based chain. By night and on weekends, she photographs bands performing on the local music scene. She began snapping photos on her cellphone for fun. As her skills improved, she upgraded her photo gear and now gets paid for her side gig.<\/p>\n

\u201cI love having this as an outlet,\u201d Hackathorn says of her photography gig, though she notes, \u201cI don\u2019t do anything that would interfere with my day job.\u201d<\/p>\n

Natural Grocers has 100 locations and about 5,000 employees. While it has a policy that restricts employees from working at comparable natural grocery stores and employees also must adhere to a confidentiality agreement (Natural Grocers makes its own trail mix and roasts its own coffee beans, for example), Hackathorn says the company doesn\u2019t discourage employees from having side hustles. <\/p>\n

Some employers not only tolerate but also support employees\u2019 side gigs. Chicago-based software platform ActiveCampaign, for example, encourages its 1,000 employees worldwide to use the company\u2019s platform for personal and professional ventures\u2014whether that\u2019s to grow a side business or work on a personal project, such as planning a wedding. The company benefits from employee feedback about the platform.<\/p>\n

\u201cHR teams must recognize that there is a real business benefit in supporting employees\u2019 passion projects and side hustles,\u201d says Michael Rico, the company\u2019s chief people officer.<\/p>\n

Finch Grace, who is a product marketing manager at ActiveCampaign, uses the platform to help sell her nail polish line. Grace started the business in her spare time about nine years ago when she worked for another company. She calls ActiveCampaign\u2019s attitude \u201crefreshing.\u201d<\/p>\n

The company has an employee agreement in place that requires workers to protect the company\u2019s proprietary information and also sets employee expectations about work performance and output, Rico says.<\/p>\n

\u201cTrust is our No. 1 value,\u201d he notes, and employees are expected to attend to their side gigs after hours.<\/p>\n

So far, there haven\u2019t been any concerns with \u201cfolks double-dipping or neglecting their core ActiveCampaign activities,\u201d Rico says. \u201cWe want people to thrive in both their work lives and their personal lives.\u201d  <\/p>\n

Susan Ladika is a freelance writer based in Tampa, Fla.<\/em><\/p>\n