What Employers Need to Know to Handle the Rise of Side Hustles

By Melinda Waters 

More employees today are taking on second jobs or “side hustles.” A recent survey by the American Staffing Association (ASA), conducted by The Harris Poll, found that 64% of U.S. workers plan to pursue extra work this year. For many, this isn’t a hobby or passion project; it’s a financial necessity driven by rising costs for housing, childcare, food, and transportation. 

This shift is especially strong among younger workers and parents with children at home. For employers, the growth of side hustles is more than a workforce trend—it’s a business issue with direct implications for engagement, productivity, and retention. 

Why Employers Should Pay Attention 

Financial Pressures Show Up at Work 

Employees under financial strain may struggle to focus, feel more stressed, and be more likely to experience burnout. Even high performers are not immune. 

Side Hustles Carry Risks 

Some employees manage their outside work without issue, but others may face exhaustion, conflicts of interest, or reduced performance. In some cases, outside work may overlap with or compete against your organization. 

The Trend Is Here to Stay 

Younger generations often see side hustles as normal. Simply banning them is unrealistic and may drive talent away. Employers need clear, practical strategies to manage this reality. 

How Employers Can Respond 

1. Review and Refresh Company Policies 

Most organizations have rules about outside employment, but many policies are outdated. Make sure your guidelines are clear, fair, and easy to understand. Spell out what’s acceptable (such as an online shop or rideshare driving) and what isn’t (such as working for a competitor or using company resources). 

2. Stay Competitive with Pay and Benefits 

The top reason employees turn to side hustles is financial need. Regularly benchmark pay against market rates and consider benefits that relieve financial pressure such as childcare support, commuter stipends, or tuition assistance. Competitive compensation is a direct investment in retention. 

3. Offer Flexibility Where Possible 

Side hustles appeal to employees partly because they offer control over schedules. Employers can take note by building flexibility into work arrangements through hybrid schedules, flexible hours, or project-based roles. Flexibility communicates trust and increases loyalty. 

4. Encourage Open and Honest Conversations 

Create a culture where employees feel safe disclosing outside work. Not every side hustle is a threat; many build valuable skills that can benefit the company. Open dialogue allows leaders to address risks early and also recognize opportunities. 

5. Watch for Burnout and Engagement Issues 

Managers should pay attention to signs of fatigue, stress, or declining performance. Regular check-ins can help spot issues early and show employees that their well-being is a priority. 

6. Look for the Upside 

Side hustles don’t have to be negative. Employees who explore entrepreneurship often bring back new skills, fresh perspectives, and innovative thinking. With the right boundaries, outside work can complement, not compete, with your business. 

Final Thoughts 

Side hustles are no longer an exception; they’re becoming the norm. For employers, this shift requires balance - protecting the organization while respecting employees’ realities. 

By setting clear policies, maintaining competitive pay, offering flexibility, fostering openness, and watching for burnout, leaders can manage the risks while also tapping into the benefits. 

Handled well, side hustles don’t have to harm your organization. They can strengthen trust, support retention, and even fuel innovation. The key is not to resist the trend, but to manage it with clarity and fairness. 

How are you handling side hustles in your organization? Share your stories (good, bad, or ugly) in the comments. 

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