Supporting Employee’s Side Hustle the Right Way

Author and Entrepreneur Michael Ray Newman discusses the benefits of supporting the side hustles of your employees.

July 20th, 2017   |    By: Keith Liles    |    Tags: Management, Employees, Startups Live, Staff, Recruiting

“Leaders who encourage employees to pursue their side hustles can be rewarded for that investment of trust. People gain skills and master new technologies through side hustles, which can end up benefitting their primary employer.”

–Michael Ray Newman, 3 Ways to Support Employee Side Hustles

Is it insane to empower employees when the result may be that they leave your company? What exactly is the story with employee side hustles? A number of different perspectives kick around these very questions in today’s Startups Live session.

Supporting Employee Side Hustles

What will you walk away with? You may very well leave the conversation reconsidering your employer-employee relations. You might adopt or alter policies to accommodate side projects – to better honor your employees’ talents and to extract the best of bright people in the service of your company’s aims for as long as it best advances both parties…

“So welcome everyone,” Wil Schroter got things rolling. “Today we’re going to dig into the topic of side hustles.”

“Also,” Steph Newton chimed in, “bonus! — Author Michael Ray Newman will be joining us!”

“Funny timing,” said Wil, “as I was reading the employee manual that 37signals (basecamp) published this morning: Basecamp Employee Handbook. One of the things they cover is ‘moonlighting’, the term before side hustle.”

“What was it that you liked about the moonlighting over at Basecamp?” Steph asked.

“They did a nice job of saying what was OK and what wasn’t OK to them. I think that’s the problem that most orgs face, especially startups. They don’t do a good job of explaining what is OK and what’s not. Basically where the line is drawn. The bigger problem is that it’s not usually a very clear line.”

“There’s often a small difference between side hustle and pursuits outside of this job. Is caring for your kids a side hustle? Not considered generally, but why is it fair for someone who has kids to leave to work on that and someone who doesn’t to leave and work on their side hustle?”

“Do people actually leave their jobs for a side hustle or is it a passion after hours?” Dr. Deborah Hecker asked.

“I think that is what side hustles usually are, right? After hours?” Steph answered. “Hence the moonlighting term, working by moonlight. Anyone here supporting employees on their side hustles  — Or been supported by your team when working on yours?”

“No one has to physically leave their jobs for a side hustle in most cases. This could be figuratively,” Wil clarified. “I think an after hours job used to mean that you physically went to your bartending job after hours. But for most startups, you never leave your laptop.”

“Oh, I thought it was something someone did apart from their main job=income and they might incorporate some of those skills into their work-work,” replied Dr. Hecker.

“I did support my employees in previous company, but it turned pretty bad for us,” Imran Siddiq responded to Steph’s question. “I lost good employees because they were lured by companies they did side projects for. But I would still do it, just in a better way though.”

“I’ve got a love/hate relationship with side hustles,” said Wil. “As a startup Founder, I think they are imperative and I even write about how you should keep your job until you’re ready to full vest into your new gig you’ve been brewing on the side.  As an employer, if I were doing a search on Linkedin and there was a box that said ‘Has Side Hustle?’, I wouldn’t check that box!

“I’ve had varying experiences with this as well, on both sides,” shared Derek Edwards. “More than anything else, I think it’s just important to have clear, established expectations for both parties. It can work really well for the main employer if they understand that you’re basically acting as a hired gun vs. someone in it for the long haul.”

“What do you think should be a clear guide?” Wil asked Derek. “A hard limit so to speak. Also, maybe worth noting – I think people doing side hustles while at startup companies can potentially be a bigger problem vs. working for big corp, because big corp may not need the same level of attention.”

Derek wisely suggested, “It needs to be established up front whether you’re someone who is acting in more of a co-founder/partner capacity vs. someone just there to help push some things along. If you’re a co-founder or key person in a smaller company, it’s really hard to have a side hustle and not have it turn into a conflict at some point.”

Elias Voelker waded into the discussion, “The way it’s talked about here, sounds more like things you do on the side – like x hours a week. How about temporary, yet full-time work? So do a 3-months consulting project to inject, say 50k into the company?”

“That’s a really good question,” said Wil. “I think doing work that keeps the Founder/Partners lights on (paying rent, etc) is imperative. It’s so rare that you can build a company without auxiliary income.”

“Guidelines are must,” Imran spoke up. “I allowed 10 percent payed time for personal projects, but people did side projects for cash and usually did not learn anything, because they took stuff they were comfortable in.”

“What about creating projects internally that are off the beaten path?” Wil suggested as an alternative to hustles outside of primary employment.

“That should work,” Imran replied. “We shifted to hackathons where our employees could compete with others – brought a lot of energy and better results… they could win cash plus lots of confidence…”

“I really like how in Michael Ray Newman’s article, he says ‘Ask employees to identify a new side hustle every quarter and to give you a progress report on their long-running projects.’” noted Steph. “Keep the conversation casual, but hold your employees accountable with legitimate follow-ups. When employees know you truly care about their well-being, they will buy into the mandatory responsibilities you set for them in the workplace.”

“Encourage and be involved with people and their personal and professional goals,” counseled Michael Ray Newman. “People are going to work on your projects and their projects during work hours and after. Pretending like they don’t exist is the wrong thing to do. If we get involved it will build loyalty & tie them more closely to you. People don’t care how much you know until they know how much you care… About them.”

“We ask everyone to spend 85% of their time working on their task within our companies. (keeping the plates spinning) Then we asked them to spend 15% of the time about building what if’s, crazy scenarios, and what they might look like if they could get the idea to work.”

“Harry’s (razors) is excellent at promoting this…” said Nicole Mitchell, “from founders of other companies, comedians, musicians, filmmakers, etc…. their employees are welcome (and expected) to have passions and out them from the beginning… and they’re encouraged to show off their skills wherever applicable at work! From jingles, skit videos, thoughts on how to approach challenges collected from the bottom-up…. They see everyone’s potential and benefit from it as a company while providing valuable experience and building up ppls confidence as they shine in their areas of expertise. Introduce folks like ‘here’s our resident DJ… enjoy her while you can at the Xmas party because we just know she’ll be on tour overseas with [insert your favorite artist here] one day soon!’”

“Very interesting!” said Steph. “I feel like that is something you need to start with from day 1 — might be hard to implement.”

“Yeah, they got it right from the start – a great model. They assume best intentions, give ppl space to be themselves, and it keeps things interesting and exciting. Everyone is so appreciative that it rarely gets abused. Being data heavy helps with that, too (when you’re working, it literally shows). It removes suspicion/over-the-shoulder management. As long as you’re meeting/exceeding job expectations, you should be able to do your thing without a doubt!”

“I could imagine that encouraging people’s outside interests/entrepreneurial spirit would build loyalty and feelings of someone caring about their growth,” said Dr. Hecker. “How do you think that impacts people?” she asked Michael.

He responded, “We for sure have lost some great people, we put a lot of training into our people personally and professionally.”

“We encourage their development as a person. I know that if we build the right people they will build the business and that’s created a culture that has driven more people to use than we can hire.”

“Does it take a certain type of leader to feel comfortable opening the concept up?” asked Dr. Hecker.

“There are four types of leaders. We have seen all types have success in implementing this methodology.”

“I can see where it would be a win/win- for the individual and the company,” continued Dr. Hecker. “If someone isn’t happy doing what they are doing at the company, the side hustle would be a catalyst for an already existing problem.”

Michael replied, “We hire ‘A’ players only. This means I surround myself with people who are much smarter than me in the areas I’m weakest in & then I asked them to match my effort:100:%. When that is done they stop making a living and start designing a life.”

“Hey everybody! Sorry I’m late,” Ryan Rutan joined the party. “I was at my side hustle! (aka a dance camp drop-off.)”

Though anything but a side project, in the scheme of employment, parenting is the side hustle of all side hustles.

Dr. Hecker’s mind leapt at the thought of children. “It’s like kids knowing their first responsibility is to finish their homework, then they get to indulge their passions.”

“For sure,” said Michael. “Give them space to create. But don’t be afraid to pull out the white gloves. ALWAYS inspect what you expect! He added, I run my companies like I run my family. Most of my learning and advice came from my mom: #proofsinthepudding”

“My experience is that if you get too draconian with your management, people wind up still doing what they are going to do, just without telling you (same as parenting),” added Wil. “You can force 20% more control, but ultimately it costs you in cultural appreciation.”

“We’re a bit different at, but we expect everyone to leave. We help people build their dream startups all day. It would be silly to not expect our own team to do the same. Frankly, it would be hypocritical.” He then directed everyone’s attention to a relevant article:

“I can see this being somewhat generational,” observed Dr. Hecker. “I mean in the past, people’s professional growth was more linear. Millennials approach life differently. Or people don’t have the financial stability that older generations did, so they get interested in other pursuits, possibly making extra money.”

‘While it is true that 21% of 18-35 year-olds have changed jobs in the past year, us youngins’ don’t actually “job-hop” any more than Gen-Xers did at our age,’ Steph quoted the article for the day. And then directed everyone to research that supports a generational shift:

“I think it’s a net positive if there are far more opportunities for people to pursue in the world,” interjected Wil. “Job hop or not – it’s about increasing opportunities.”

“It may be a chicken and egg thing,” began Jeff Sherwood, “but as we have seen companies less likely to keep people until retirement the need to keep skill fresh and develop other income seems natural.”

“On that note,” Elias offered: It was widely agreed that this is a must read.

“As neither a Gen-Xer or a Millennial, this is not something I would have thought to do when I was younger, kept the conversation going through the lens of generational difference.”

“If someone told me ‘I want to be at until I retire,’” said Wil, “I would never hire them.”

(Steph Newton may have slipped through the cracks here.)

“Why’s that?” Sherad Louis-Charles asked Wil.

I want people with ambition beyond our 4 walls. And frankly it has to do with the fact that I want people to get so inspired to start a startup that they leave for that reason.”

“Yes, I believe this is one reason my companies have had so much success with this type of culture,” said Michael. “We train a lot on generational communication for all types of companies all over the world. Millennials want to collaborate and we encourage that, but one thing that’s come out of that is a new term called ‘competitive collaboration’. Gives millennials a different mindset and perspective of what they can really achieve. Whether they be with our company or somewhere else. Growth and change is going to happen. We have to always be willing to be on the forefront of change to stay relevant. #transparency”

“It is important not to fear people’s needs to grow and move on,” said Dr. Hecker.

“Great point. Example: two coaches playing against each other in a football game. They both want the same thing… to WIN! However, both of their game plans are completely different. You may not be a fit on one team and that’s OK. You could always go find someone else to play for.”

“I feel we have overwhelming success in truly helping our people design their life and not just make a living. Because they know that we are completely invested in them.”

“Are we also inadvertently underscoring the concept of work/life balance?” wondered Dr. Hecker.

“Yes, about work/life balance. If you can help your people find their true passion they may become ‘intrapreneurs’ for us or maybe their own entrepreneur for them self. Either way, it’s a WIN. We don’t want someone working for us if they are not truly passionate about their life and what they do. That’s why having a side hustle is so important.”

“I would work for you any day!” Dr. Hecker enthused. (And who wouldn’t want to work in that environment… if you had to work for someone else).

And just like that, it was time for Steph to say, “Alright — looks like we are coming up to the top of the hour! Y’all can still chat away — but wanted to give a huge thanks to Michael Ray Newman for joining us today!”

He responded, “I’m very grateful to have the opportunity to hang with y’all for a while. Hit me up on twitter @ZZICEO or LinkedIn under Michael Ray Newman. Always start my day with something POZ hope you do to #WIT”

About the Author

Keith Liles

Keith Liles is a freelance writer who loves travel, music, wine, hiking, poetry, and just about everything. He practices saying “yes” to life vigorously, rehearsing for the phone call when he’s asked to tour with Bruce Springsteen and the E Street Band. Follow Keith on Twitter @KPLiles.

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