How to Support Your Employees’ Side Hustles

Employee side hustles can boost workplace productivity, engagement, and retention. Plus, they are easy to support (or at least allow).

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How to Support Your Employees' Side Hustles

Here's what you need to know:

  • A study found that side hustles can boost employee morale, productivity, creativity, and focus in the workplace
  • Small businesses can reap the rewards of employees having a passion project or moonlighting outside of work if they craft policies that allow and support employee activities outside the workplace
  • To support your employees’ side hustles, use upskilling resources, highlight employee projects, and create outside activities policies
  • Involve speakers from related disciplines and implement time-tracking solutions

About 45% of Americans have side hustles — so there’s a good chance many of your employees do, too. And there’s a chance this shift towards side hustles benefits your business.

A study from the University of Iowa found that side hustles can boost employee morale, productivity, creativity, and focus in the workplace.

In other words, employers and small businesses can reap the rewards of employees having a passion project or moonlighting outside of work. But only if they craft policies that allow and support employee activities outside the workplace.

To understand why employers should add side hustles to their professional development benefits, we must look at why employees pursue side hustles. Then we can look at actionable steps you can take today.

Why do employees pursue side hustles?

There are 2 reasons that employees start a side hustle:

  • Passion projects
  • Added revenue streams

Depending on their side project, they may or may not eventually leave to focus on their side hustle. For example, there’s a huge revenue difference between a self-published author and a moonlighting web developer. Both are considered side hustles, but the primary reason may be different.

In fact, the biggest motivator for starting a side hustle is independence. Nearly 40% of people with a side hustle say they wanted more personal freedom.

When you couple this mix of motivations with professional development resources, you can potentially turn upskilling and side hustle support into an employee benefit.

And there are good reasons why you should do this. Not only is it relatively cost-effective and hassle-free, but side hustles can have a positive impact on your workplace environment.

Why turn side hustle support into a benefit?

Side hustles either make employees more financially secure or give them joy. Both of these results inspire employee motivation, productivity, satisfaction, and an overall sense of employee well-being.

And if you, as a company, help them to pursue their passions, you can inspire employee loyalty. They will feel valued. And they’ll be less likely to leave.

If employees can improve their financial situation with a side hustle, they may not look for another job that pays more.

Furthermore, if employees can improve their financial situation with a side hustle, they may not look for another job that pays more. This is especially true if they believe the workplace is a positive environment.

5 ways to support employee side hustles

The most natural way to support employee side hustles is to integrate this element with your professional development and employee recognition practices. The following 5 examples are cost-effective and easy to implement.

1. Use upskilling resources

The easiest and most cost-efficient way to support employee activities outside the workplace is to invest in broad upskilling resources. For example, websites like Coursera, Skillshare, and Udemy offer a wide range of courses that can help employees with their professional and creative goals.

Letting employees know that they can use these resources outside of the workplace or their role is a great way to highlight their value.

2. Highlight employee projects

Another simple way to support side hustles is to publish employee accomplishments on social media, internal newsletters, or other platforms.

Did your employee just publish a book? Obtain a patent? Launch a new online business? All of these milestones can provide insights into motivation for other employees and foster a better sense of community.

3. Create outside activities policies

In some cases, it can be helpful to create an outside activities policy. These rules would be included in the employee handbook and would help answer questions like:

  • Whether or not employees can use company assets or equipment
  • If they can take time off for side hustle-related events
  • Defining conflict of interest activities
  • If there are limits to how much office time they can use for their activities

4. Involve speakers from related disciplines

It’s common to invite speakers or host workshops to help with employee professional development. Instead of always choosing individuals from a specific role or department, you may want to add a few “wildcard” seminars from different professionals.

This can provide an array of experiences for your employees and get them thinking creatively and outside their field.

Likewise, you can ask employees to discuss their side hustles or what they’ve learned.

5. Implement time-tracking solutions

You can allow employees to track time on their personal projects from their task board if you use one. This gives you more visibility on how professional development resources and work time are spent and helps employees manage their time more effectively.

You could even choose to have these “side hustle” hours be non-billable, so employees are not paid for the time tracked on their side business.

Or you can choose to allow employees a certain amount of time towards their side hustle per day or per week that will be wrapped into their regular hours or paid breaks. Many employers use employee time tracking tools to help track employees’ hours worked.

Dealing with conflicts of interest regarding side hustles

Regarding side hustles, it’s important to consider if an employee’s gig may conflict with the company’s objectives. The last thing companies want to do is to fund and support a competitor.

Typically, employment contracts should include some clauses about non-competition and non-solicitation. These elements should be included within the outside activities policy as well.

This goes for moonlighting and freelancing gigs as well. A marketing professional, for example, should be allowed to consult for other businesses — as long as they aren’t giving advice to their employer’s competitor.

Your non-competition clause may include:

  • The duration of the non-competition clause
  • Where the agreement is considered legal
  • What constitutes a breach of agreement
  • What counts as competition

A sample non-complete clause you can customize is:

“The Employee agrees that for a period commencing on [Date] and ending on the [Date], and thereafter, through the later of (a) the period ending on the first anniversary of the Termination Date or (b) the period ending after the Severance Period (collectively, the “Restrictive Period”), they shall not, directly or indirectly or directly that constitutes as a direct or indirect competitor. Nothing contained herein shall be construed to prevent Employee from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market if Employee is not involved in the business of said corporation and if Employee (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934), collectively, do not own more than an aggregate of 3% of the stock of such corporation.”

Many employers may already have an anti-moonlighting clause in place.

This clause prohibits employees from working for a second employer outside of the office. If you plan to support employee side hustles and have such a policy, the anti-moonlighting clause should be removed.

Using a non-competition clause instead can provide security that your employee is less likely to work for your competitors.

What are more ways for employers to boost retention?

At the end of the day, employee side hustles can boost productivity and engagement. Which, in turn, improves retention and loyalty.

And while allowing employees to pursue their passions is an “easy” win for most employers, there are even more strategies you can use to boost employee well-being and keep turnover costs low.

For more on employee retention and engagement, check out our complimentary guides and resources:

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