Why side gigs are the new norm and what companies should do about it

If you’ve ever discovered that one of your employees had a side hustle, you’re not alone: studies show almost 90% of job seekers in the U.S. have done part-time work on the side (sometimes even on company time). 

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Employers are wary of this trend. They don’t know how side gigs affect engagement, productivity, and team loyalty, and they don’t want to pay employees for working on other companies’ projects. As a result, some organizations have banned moonlighting. But others are taking a different approach, using side jobs to develop employees and strengthen their business.

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In this article, we'll discuss why full-time employees look for part-time work and suggest ways you can turn this challenge to your company's advantage.

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Figures and facts

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First, let’s define our terms. If an employee earns extra money by running a business or freelancing in addition to their main job, we call it a side hustle.

Then there’s overemployment, when someone has two or more full-time jobs, often without their companies knowing. This can lead to lower productivity and raises ethical issues.

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According to a Bankrate survey, 36% of American adults have side gigs, with more than half (52%) of respondents starting within the last two years. The Express Employment Professionals-Harris Poll found that 41% of respondents work part-time while on the clock at their primary job, and 57% don’t see this as a problem as long as productivity doesn’t suffer.

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Interestingly, there’s a generational divide over this question: 67% of Gen Z and 64% of millennials say it’s fine to do Job B while at Job A, but only 44% of Gen X and 34% of baby boomers agree.

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Side gigs are especially popular among Gen Z and millennials:

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Not only are younger generations more likely to moonlight, but they also report higher incomes from doing so, with millennials earning an average of $1,129 per month and Zoomers earning $958. Business Insider, citing Morgan Stanley projections, reports that part-time work could become a $1.4 trillion industry by 2030 thanks to generative AI.

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Why people want side hustles

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1. Additional income

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The main reason people moonlight is to cover expenses (61% of respondents) or to increase their savings (51%). A third of those who use side gigs to cover their everyday expenses say they expect they’ll always need to do so.

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2. Future-proofing

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Some people see side gigs as a way to hedge against an uncertain future. Creating diversified sources of income helps offset the risk of losing clients, getting laid off, and so on.

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3. Gaining skills

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Another reason people get side gigs is to learn new skills and try their hand in a new field. This is one way to prepare for the freelance economy that Reid Hoffman, co-founder of LinkedIn, has talked about. He predicts the traditional 9-to-5 job will disappear by 2034, and people will start combining multiple roles simultaneously. 

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4. A step toward freedom

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According to CNBC, 50% of Zoomers see side gigs as the first step toward entrepreneurship, which will allow them to abandon traditional careers, gain flexibility, and influence the world.

Similar trends are seen among older millennials: they say multiple sources of income will help them tap into all of their strengths and build their portfolios. Beyond increasing their income, they hope this will give them greater job satisfaction and control over their lives.

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How we got here

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Finding a part-time job or one-off project is easy now, but it wasn't always.

Josh Bersin has nicely summarized how the employer-employee relationship has changed and why part-time work is now commonplace.

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According to Bersin, work relationships have gone through three main phases.

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Phase 1: One employer, one career (1960s–1990s). More often than not, people had stable work lives, working for one company their whole careers.

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Phase 2: The rise of choice (2000s–2018). With the advent of online job boards, people’s range of choices expanded. Moving from one company to another got easier and less effort-intensive. Companies began thinking more about their employer brand and employee engagement.

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Phase 3: The pixelated workforce (2019–). With the gig economy, people’s options have exploded. They can work part-time while they study or take care of children or parents. And companies don’t have the same incentives to hire full-time employees, since now they can find people for specific projects or part-time work.

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Part-time work thus has gradually become the norm. This sea change means it’s time for companies to reconsider their approach to talent management, introduce flexible work conditions, and think of mutually beneficial arrangements to offer professionals.

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The rise of freelancing

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Side projects often serve as launchpads into freelance careers. According to Upwork, freelancing is becoming increasingly popular: 64 million Americans — almost 40% of the U.S. labor force — have done it. Some are even freelancing full-time, with the number of workers doing so rising 6.5% in 2024, to 27.7 million people.

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Companies are actively capitalizing on the trend. For example, 90% of tech company executives are open to hiring freelancers during peak workloads, and more than 28% already integrate them into daily operations. More than 21% rely on freelancers almost every day, and more than 30% use them two or three days a week.

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Freelancers aren’t just for overcoming emergencies — 68% of companies say the main reason they hire them is to get access to professionals with unique experience.

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Case studies

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How do companies view employees with side gigs? It varies.

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Some companies discourage or prohibit moonlighting, saying this is necessary to protect intellectual property and trade secrets. For example, Apple employees must warn their managers in advance about any paid work outside the company. (At the same time, there are cases when part-time work helped people land jobs at Apple, as for this employee, who says it was the side projects he cited at his interview that sealed the deal.)

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Other employers are trying to turn the part-time trend to their advantage. For example, Blackthorn has switched to a four-day week, forbids employees to work extra hours, and asks them to find side gigs. The company believes such projects help employees grow and provide useful experience they can apply at their main jobs.

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Even some major companies take a similar approach. For example, Google allows employees to spend 20% of their time on outside projects, and 3M’s maximum is 15%.

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Facebook tries to integrate side projects in a different way, organizing hackathons where employees brainstorm and create solutions that could improve the platform’s user experience. The main rule of the hackathon is that you can't work on anything even remotely related to your day-to-day work.

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Another interesting example is Keap (formerly Infusionsoft). It encourages employees to start their own projects by giving them a free license to its small business software. Using the product this way is meant to give employees better insight into customer needs.

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What companies should do

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But if there’s no one-size-fits-all approach to part-time work, how should organizations respond? Here are some things to consider, no matter which strategy your company adopts.

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1. Have a clear policy

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Half of workers say their employers don't have a code of conduct or policy that governs moonlighting during work hours. And only 42% of hiring managers say their companies have up-to-date policies to prevent disputes.

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Without a clear policy, managers won’t be able to respond confidently and consistently when questions about side jobs arise. For this reason, whatever the policy ends up being, there needs to be one, and it needs to be in writing.

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2. Focus on results, not time spent

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It isn’t the best idea to peer into an employee's screen, trying to figure out what exactly they’re working on at any given moment.

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Instead of managing people, focus on managing results. If employees are doing good work and meeting deadlines, and the company is hitting its targets, consider whether a crackdown on side jobs is really necessary.

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3. Foster an entrepreneurial environment

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The truth is that even if employees don’t have side gigs now, there’s a good chance they’re thinking about getting one. See if there are ways you can turn this to your advantage in the spirit of Facebook’s hackathons and Keap’s side projects. Might your company actually benefit from employees who have the freedom to try other things?

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4. Hire freelancers yourself

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Whether or not your own company encourages moonlighting, you can hire moonlighters from elsewhere!

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Working with freelancers gives you access to experts with deep knowledge even as you save resources. This could be not just mid-level professionals, but also fractional leaders at the C-suite level. They can help solve complex problems thanks to their diverse experience — and they’re much cheaper than a full-time executive.

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Discuss your experiences with colleagues, experiment, and analyze the results to find the solution that’s best for your company. And stick with Mellow — we’re following this trend closely, and we’ll be sharing more juicy news and research as we find it.