Should You Encourage Your Team to Pursue Side Hustles?

Side hustles have become an increasingly common strategy for people to supplement income from their full-time job or create multiple sources of income by pairing multiple side hustles. Outside of the financial benefits, side hustles can help workers learn new skills, make extra money or pursue a dream outside working hours.

No longer a fringe activity but a permanent part of the modern workplace, side hustling brings troubling questions to leaders about their role in allowing or even encouraging their team to pursue side hustles—a term known as intrapreneurship. If you’re a leader at your company, consider the following. 

The Rise of the Side Hustle

Side hustles continue to grow in popularity because they permit additional financial and professional opportunities that a traditional working schedule simply can’t. Side hustles give people the chance to earn more money, start their own businesses or learn new skills, potentially leading to a salary increase in the future.

The economy, and its stagnating wages for workers, have contributed significantly to this development. Take the financial situation of most Americans, for example—37% have no emergency savings to fall back on. This has only made side hustles more attractive in recent years.About 34% of people started a side hustle in 2021. Popular side hustle ideas include starting an online store, blogging, and podcasting because each of these outlets are popular with everyday people (consider how nearly 120 million people listen to podcasts each month) and require minimal funds to launch.

As an executive, you need to recognize this trend for what it is: permanent and something you can potentially take advantage of.

Benefits of Intrapreneurship

Although it might seem logical to avoid permitting—let alone encouraging—side hustles for your team, there are actually several benefits your organization might reap if you lean into this recent trend.

1. Improved Employee Skills

Side hustles allow your team to stretch their creative and organizational muscles. This, in turn, gives them extra skills that could benefit your organization.

For example, imagine a middle manager in your company who wants to start a side business selling their own products. That middle manager has to learn a whole new set of skills to:

• Successfully market their company
• Make the products
• Sell the products to customers
• Adjust to customer feedback 
• Handle customer service needs

Even soft skills are inevitably learned on a side hustle. New business owners, for instance, need to know how to manage and prioritize their neverending to-do lists. They need to know how to deal with late- or non-paying customers—after all, 22% of digital invoices were overdue in 2021, according to invoicing software company, Wave.

When the manager shows up for work at your organization, they bring those skills to the objectives in their daily tasks. In some ways, side hustles can work as training crucibles you don’t have to pay for. In this way, encouraging side hustles is a lot like encouraging employee development without having to foot the bill for expensive seminars or training materials or forcing mandatory training on resistant team members.

2. Increased Employee Happiness

Let’s face it: no matter how wonderful your organization, many of the people working there likely wouldn’t be if they had the financial means to follow their dreams. Encouraging side hustles allows your employees to pursue their dreams, at least in a part-time context. 

Without intrepreneurial freedom, a negative pressure could eventually build up and result in several top-tier employees leaving to explore other paths.

But if you encourage—and actively support—your employees to start and run side hustles while working at your organization, you could nip this negative pressure in the proverbial bud. By encouraging successful startups and side hustles, you may actually increase employee happiness because your employees will:

• Have the opportunity to pursue their dreams while being financially supported by a regular salary
• Not have to quit their current job or worry about concealing their side hustle from their supervisor 
• Feel like they have increased control over their time and future

Your employees may also feel grateful to you or the company they currently work for. In the long run, this may lead to increased employee retention, trust and camaraderie. 

3. Saved Wages 

In some cases, you may also be able to save on wage costs by permitting or encouraging side hustles. Most side hustles do bring in a little extra cash, even if many of them don’t fully take off or allow your employees to quit their primary jobs.

Still, that extra cash could eliminate some wage pressure that would otherwise go to you and your financing department. If your employees make plenty of money from the paychecks you provide and from the funds from their side hustles, they will be less likely to ask for a pay raise or extra bonuses.

4. Higher Attraction for High-Skill Workers

Encouraging side hustles may have a long-term advantage by attracting highly skilled, motivated workers. Every company only wants the best of the best to work for them, and the easiest way to achieve this is to make your company an attractive place to work. Some of that has to do with culture and pay, sure, but there’s a lot more to it than adding a ping-pong table to the break room or monthly happy hours. 

What’s more attractive than a flexible work-life balance plus the opportunity to pursue side hustles or alternative means of income? Many go-getters may feel inspired to work for your company when they learn that they can pursue their dreams and bring home a healthy paycheck at the same time.

Potential Issues

Although it’s true that side hustles can bring benefits to your organization and that side hustles are more common than ever, there are several possible issues worth considering. First, if an employee’s side hustle does well enough, they might be inspired to leave your company for good. Second, some side hustles may steal employee attention and energy from your organization. 

Although these are potential downsides, they are far from guaranteed. What’s more, company executives can work to mitigate the risk of these disadvantages.

For example, keep an eye on what’s considered competitive wage in your industry and combine that with annual cost-of-living raises. This shouldn’t be a problem if you follow good financial planning, but it can also insulate you from employees fleeing in favor of a growing side hustle. 

Alternatively, implement company policies requiring employees to disclose any major side hustles before starting them. This helps ensure open communication and clearly defined boundaries between their side hustle and their primary job duties. 

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It’s likely a good idea to encourage your employees to have side hustles, even if it seems risky. Side hustles can improve the skills and value of your workforce, make your company seem more attractive and lean into the scheduling flexibility that’s likely a mainstay brought on by the COVID-19 pandemic. 

If your employees approach you with side hustle ideas, encourage them with. It’s far better than dismissing them and inspiring your employees to look at your competitors instead. 

Photo by Korneevamaha/Twenty20

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