The Slippery Slope of a Side Hustle

In today’s fast-evolving labor market, the ‘side hustle’ phenomenon has become more than just a trend, it’s now a reality for the majority of workers.

Recent surveys show that nearly 90% of American job seekers report having worked a side hustle, and41% admit to juggling that gig alongside their primary job…even during work hours.

This got us thinking, what does this shift to side hustle culture mean for employee engagement, performance, and long-term retention?

At its core, side hustle culture is a reflection of the current economy workers are living in. Rising living costs and stagnant wage growth have made supplemental income a fundamental part of many employees’ financial planning. In fact, according to one report, 72% of US workers now rely on at least one source of secondary income, and 38% say inflation significantly increased their need for additional work. From this perspective, side hustles become those important financial buoys in an unpredictable economy.

But there’s another side to the story. When employees’ attention is divided, their engagement at work can suffer. Data suggests that when side gigs encroach on the workday, managers notice the impact: employers flag lower productivity (50%), decreased focus (47%), andreduced engagement (37%) when employees double-dip during company time. That could be considered a little more than a harmless distraction.

So why is this happening, and what can employers do?

First, many side hustles stem from unmet needs. Whether it’s financial pressure, lack of career growth, or a desire to develop new skills, employees are signalling that their primary jobs aren’t fully satisfying those needs. Left unaddressed, this dynamic erodes at employee engagement and can significantly impact organizational morale.

Here’s a few ways employers can respond to this:

• Listen First, Act Second – understanding why your employees pursue side gigs can reveal gaps in compensation, career development, or workplace culture. Use surveys, stay interviews, and exit interviews to gather real and actionable insight.
• Clarify and Communicate Policies – half of employers currently lack clear guidelines on outside work during business hours. With thoughtful policy design, you can set expectations while still respecting employees’ autonomy.
• Reframe the Narrative – instead of viewing side hustles strictly as a threat, think of them as opportunities to engage ambition. Many employees use side gigs to build skills that could benefit your organization; some progressive companies even support passion projects as part of professional development.
• Enhance Engagement Internally – competitive compensation, clear career paths, flexible work options, and learning opportunities reduce the need for outside income and increase loyalty.

At the end of the day, side hustle culture isn’t going away. It’s a sign of ambition and resilience, but also a clear signal that many employees feel their core job isn’t meeting all of their needs. Employers who understand the motivations behind this trend will be best positioned to keep their workforce engaged, productive, and loyal. If you would like to discuss how we can help ensure that side hustle culture is seized as an opportunity for your company, please do get in touch with us today!