To Build Trust and Unlock Innovation, Support Your Employees' Side Hustles

When our head recruiter speaks to a promising candidate, she asks about qualifications and what they seek in a team culture. If things are going well, she’ll ask this: “So, do you have a side hustle?” No, it’s not a trick question, but part of our recruitment and retention strategy.

Today, one in three working Americans has a part-time job along with their full-time employment, and an additional 24% hope to pursue a side hustle in the near future. While there is growing support of moonlighting among executives, it’s still often treated as an HR nuisance to be managed for fear of reducing productivity or incurring a liability that could expose trade secrets.

As a CEO who has now been at the helm of three agencies, my message is this: Embrace the side hustle. Not just because of its inevitable ubiquity, but because it’s good for business—the kind that encompasses the bottom line, employee mental health and brand values.

How it works

Our designers, strategists, editorial talent and communications specialists are already professional musicians, consultants, university lecturers and entrepreneurs on the side. Employees with side hustles comprise about a quarter of the team.

As long as they prioritize team and client meetings, our side hustle policy allows them the flexibility to engage in outside work during the typical 9-to-5 workday. And with managerial approval, they are able to go on part-time, temporary leave to pursue passion projects.

At the center of this policy is trust that employees know what they need to have full lives and will do their best at work on their own schedule.

With this policy in place, our organization has experienced higher retention rates among employees with side hustles and year-over-year growth that outpaces industry standards. In our internal employee engagement survey, 92% agreed that the organization supports them pursuing alternative pathways to growth outside of their discipline, and 100% of respondents said their talents and contributions are valued and respected.

Why it unlocks innovation

Research by the Academy of Management found that side hustles were more likely to enrich full-time work performance and improve psychological well-being on the job. The study connected the psychological and performance boost to fulfilling deeper motivations including prestige, financial stability, social connection, full project ownership and experiencing new tasks.

In satisfying these needs, side hustles can serve to energize and expand employees’ minds in a way that helps them innovate and bring creative solutions to their full-time work. This is particularly important for those who turn to their side hustles to prevent burnout from the sameness and social isolation of remote work.

For most, the side hustle represents the opportunity to meet needs not fulfilled by work while holding onto all of the opportunities their full-time work does allow. Only 17% of study participants reported that they would consider taking their side hustle full time, though I would argue that an employee leaving to pursue their dream is far preferable than resigning because of a work culture issue, burnout or for better compensation.

As for concerns that side hustles compete with your company’s core offering, this can be remedied through trust-based conversations between employees and managers and agreements that prohibit sharing proprietary information.

Who benefits? Everybody

Policies that encourage flexibility in how and when we work provide an overdue update to our definition of productivity. They reject the rigid notion of “company time” that is often revered in the 9-to-5 model, a dusty relic of the Industrial Revolution factory.

These policies build trust between employees and their companies through the understanding that they will be assessed based on how well they support their teammates and the quality of their work, instead of how desk-bound they are. They allow employees to show up as their whole selves, which has ripple effects for work culture. With recent research showing that people are 10.5 times more likely to resign because of bad workplace culture than compensation, supporting side hustles fosters a culture of trust and autonomy that serves everyone. 

In a PwC survey of C-suite executives, 77% said hiring and retaining talent is their most critical growth driver in 2022. But typical levers like hybrid work opportunities, compensation and benefits are becoming less of a differentiator in the industry, as most employers must improve in these foundational ways.

While policies that support side hustles are just a piece of the puzzle, they certainly can bring companies closer to creating a work culture that emphasizes trust, autonomy and balance.