Business Maverick

INCOME GENERATION

Side hustles can have unexpected benefits for employee and employer alike

Employees can face significant consequences for not disclosing their side hustles to their employers. (Photo: iStock)

‘Side hustle’ has become an ubiquitous term for earning an income in addition to one’s primary job, with this trend significantly more appealing for employees than their employers. But, experts explain, if done with support and transparency, taking on more can benefit everyone in unexpected ways.

People with an extra job tend to work longer hours at their main job – an average of 10 hours a week more than those who do not have side hustles, according to Jon Foster-Pedley, the dean and director of Henley Business School.

People taking on more than one job seem to be particularly loyal. Foster-Pedley says that a study by the school in 2019 showed that although an extra job may supplement one’s income by up to 25%, most South Africans said they would not leave their main employment – even if their other options looked promising.

More South Africans are holding down an extra job, with 27% of respondents saying they had more than one job.

“They’re doing it for various reasons; mostly to make ends meet in an economy where pay increases have not kept pace with the cost of living, but also to explore their dream job, which they wouldn’t otherwise be able to do,” Foster-Pedley explains.

Younger side hustlers tend to be motivated by income, whereas older practitioners seek passion.

The Covid-19 pandemic and its effects on the workplace may be a good thing for side hustlers and the economy.

“There’s a greater realisation, thanks to Covid-19, that there’s an opportunity to create a win-win scenario and help, indirectly, create jobs, especially in the SMME space, since almost 86% of our respondents were employing between one and four people in their side businesses,” Foster-Pedley says.

Morne Patterson, financial director at digital solutions company 1-grid, says during the Covid-19 pandemic, there has been an increase of people looking to start a side hustle. Although there has been a “high turnover” in people opening e-commerce shops, side hustle projects include anything from offering plumbing services to selling beauty products.

“A side hustle is not just about creating a second income stream – that’s only one part of it,” Patterson says. When employees do things “on the side” that motivate and encourage them, this positively affects them overall, including in their main job. “So, because of that, we believe that side hustles are important, and that they are being encouraged more and more in today’s society.”

Kerry Morris, CEO of business solutions company The Tower Group, says: “In my experience, I think most South African employers are aware of the employment situation in our country and don’t have a problem with employees having a side hustle to create a better life for their families.”

She agrees that there is strength in allowing and fostering this because, often, “one’s side hustle creates a happier person as they are achieving something on their own, creating more income in their household and, generally, I have seen this boost an employee’s confidence and spark of enthusiasm, which they then bring into the workplace”.

Both Morris and Patterson mention staff members who have pursued side hustles, such as a catering business or complementary tech services, which ended up benefiting both their companies and the employee.

Morris says they gave their employee the support she needed to help her business “lift off the ground”. The employee subsequently resigned to jump into her side hustle full time. “It is always a great feeling, knowing that, as an employer, we were able to be a part of someone’s journey to being an entrepreneur,” she says. It is important to question whether there is a conflict of interest.

“You need to ask yourself, ‘Am I eating my employer’s lunch by doing this?’,” Patterson says. He believes that, as long as there is transparency and clear expectations, a side hustle should not have a negative effect on the primary employment relationship.

“It can only be good for the employer,” he says. “People who are motivated, [who] are having fun, are more productive.”

This includes when someone is starting an extra project primarily for the income.

Advocate and legal director Tertius Wessels explains that, legally, employees are not explicitly limited to just one job, even though the regulations differ between sectors.

The retail motor industry, for example, prohibits “out-work”. Other employers may include a prohibition against multiple employments in their contracts.

Wessels says: “These clauses are generally considered reasonable given that employees have a common-law duty to act in good faith and to devote the whole of their time, during ordinary working hours (and in some cases even after ordinary working hours) to furthering the interest of their employer.”

Wessels recommends that the issue be approached “thoughtfully and there needs to be an agreement regarding the same, preferably in writing”.

He adds that when an employee is uncertain, they should disclose or discuss their side hustle. DM168

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