In recent years, there has been a significant rise in the popularity of side hustles, also known as freelance work or gig economy jobs. Side hustles refer to the additional jobs or projects individuals undertake alongside their primary employment. This trend has gained momentum due to technological advancements, a desire for greater flexibility, and the pursuit of additional income streams. 

However, the increasing prevalence of side hustles has impacted both HR departments and the companies they serve. This article explores the rise of side hustles and examines how it has transformed the HR landscape and influenced organisations.  

Several factors have contributed to the surge in side hustles. Firstly, the gig economy, fuelled by platforms such as Uber, Airbnb, and Upwork, has made it easier for individuals to find freelance work and monetise their skills. 

The desire for greater work/life balance and flexibility has led many employees to seek alternative means of earning income while maintaining their primary jobs. Economic uncertainties brought about by the COVID-19 pandemic also have motivated individuals to create multiple income streams as a means of financial security.

In September last year, 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.

Amplify HR managing director Karen Kirton said the rise of side hustles had also introduced new dynamics within the workforce. 

Employees are increasingly looking for employers that support their entrepreneurial aspirations and offer flexibility in managing both their primary jobs and side gigs. This has put pressure on HR departments to adapt their policies and practices to attract and retain top talent, while also ensuring business interests are protected.

Organisations that fail to recognise and accommodate these changing expectations may find themselves at a disadvantage in the competition for skilled workers.

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. 

Defining the company approach

It is imperative for HR departments to understand the potential advantages and disadvantages that side hustles bring to the table.

“There are currently two schools of thought around this. The traditional school of thought, which many companies still have, is that it was generally frowned upon to have secondary employment,” Ms Kirton said.

On the flip side, employees engaged in side hustles often bring new skills, fresh perspectives, and innovative ideas to their primary jobs. They may acquire valuable experiences and networks outside of the organisation, which can be leveraged to enhance organisational performance and foster collaboration.

However, there are some potential issues that can arise. Employees involved in side hustles may find themselves in situations where their personal interests conflict with the interests of the company. For example, an employee working on a side project in a similar industry may be exposed to sensitive company information or may compete directly with their employer. This can raise ethical concerns and compromise the organisation’s trust in the employee.

Another challenge is that juggling multiple commitments can affect an employee’s ability to focus and maintain productivity. Side hustles can be time-consuming, leading to divided attention and potential conflicts in meeting work deadlines and delivering quality results. This can impact the employee’s overall performance and, consequently, the company’s productivity.

Side hustles can also raise issues related to intellectual property rights and confidentiality. Employees working on personal projects may inadvertently use or disclose company-owned intellectual property, potentially leading to legal disputes. Ensuring that employees understand their obligations regarding intellectual property and confidentiality is crucial to protect the company’s assets.

Implications for HR departments

Addressing this new aspect of work requires a proactive approach. Implementing clear policies and guidelines regarding side hustles, emphasising open communication, and establishing mechanisms for conflict resolution can help minimise the negative impact on both employees and organisations. 

Companies should aim to strike a balance that allows employees to pursue their entrepreneurial ambitions while ensuring the company’s interests are protected.

This includes:

  • Talent acquisition and retention: HR departments need to be proactive in understanding the motivations and needs of employees engaged in side hustles. Attracting and retaining talent may require offering flexible work arrangements, including remote work options, adjustable schedules, and the possibility of project-based or contract work.
  • Policy development: HR policies must be revised to address the legal and ethical implications of side hustles. Companies need to establish clear guidelines regarding conflicts of interest, intellectual property rights, non-compete agreements, and data security to ensure that employees’ side hustles do not compromise the organisation’s interests or create conflicts within the workplace.
  • Work/life integration: The concept of work/life integration is gaining prominence as employees juggle multiple roles and commitments. HR departments can support employees by promoting a healthy work/life balance, encouraging open communication, and providing resources for managing stress and burnout.
  • Upskilling and reskilling: The rise of side hustles highlights the importance of continuous learning and skill development. HR departments should invest in upskilling and reskilling programs to help employees adapt to evolving job requirements, stay competitive in the gig economy, and contribute effectively to the organisation.

“There needs to be some guidelines in there. First, the business needs to decide are we going to encourage this or are we just going to accept it as it happens, and that will then dictate the type of policy that you have,” Ms Kirton said.

“The important part is focusing on the type of work employees are going to be doing in that side hustle, potentially their hours and their days, so you can understand that fatigue element because of the work health and safety obligation.

“The policy should also look to examine if they are doing something that perhaps doesn’t directly compete with the company itself or that it might be an internal IP issue. Ultimately, it will be important to consider how we manage the businesses and employee needs to be within that policy or code of conduct.”