Before proceeding let’s define a side-hustle
A side hustle is any job or activity that generates extra income outside of a person’s primary employment.
Whether you should “allow” it or not is nuanced. But also, not really.
Reasons employees want side-hustles
Before we tackle it, let’s understand it.
Not all side-hustle motivations are the same. And they indicate different things. The common ones I see are:
Financial
Extra income being the most obvious one. Maybe they want to get something their normal salary doesn’t cover, or they don’t want to spend their salary on a toy, trip, etc.
It’s not necessarily a strong red flag for you. Especially if it’s seasonal or short term.
Then there’s income diversification, reducing dependency on one employer. That’s smart.
Sure, it could be an orange flag if you fear they “don’t need you.”
But then again, are you an employer or a hostage-taker?
Career/Skill development
Some people want to learn faster than your org chart allows.
They want to experiment freely, without layers of approval, risk-aversion, or politics.
That was always my main motivation.
A side project is an environment I fully control.
And if a test works and it’s relevant, then, the main job wins by inheriting a tried-and-tested idea.
Yes, this can be dangerous for retention if someone discovers they enjoy leadership or entrepreneurship.
But if your fear is that your top people might grow too much, then what you really want isn’t top performers. And that’s ok, just don’t expect top performance.
I want a growth-minded top performing employee but they’re not allowed to grow too much or perform too much.
Personal Branding
Another big reason people start side projects is to build a personal brand.
That might sound selfish on the surface, but it’s often a win-win.
When your employees write, speak, or share ideas publicly, they become visible experts. That visibility reflects back on your company, as a place that attracts capable, credible people.
It’s free marketing and trust-building you couldn’t buy through ads.
When your team is seen as industry voices, it raises the perceived quality of your whole organization.
Companies with employees who have strong personal brands often recruit easier, sell easier, and retain better, because they’re seen as where the good people are.
If you think an employee having a personal brand and doing some public speaking is bad, imaging having an employee nobody wants to listen to or takes seriously.
The thing about top performers
The thing about people who are top performers, is, believe it or not, that they perform.
Low performers almost never have side-hustles. They see work as a chore to avoid, not as something to build or experiment with.
So if no one on your team has ever brought up side-hustles, that tells you something too.
The Fear: “What If Their Side-Hustle Outgrows Their Job?”
That’s a bit like fearing your spouse will get fit and then leave you.
It comes from insecurity.
Imagine telling your partner not to go to the gym because you’re afraid they’ll become more attractive and leave.
You’d come off as controlling — and ironically, that behavior is what drives people away.
Same with employees.
Reality Check: Few Side-Hustles Replace Full-Time Jobs
From what I’ve seen, less than 1% ever make more than the main job.
If it happens, ask better questions:
- Is their side-hustle similar to their current role?
- Could they move to a position in your company that better uses their strengths?
- Are they too low in the org to make real impact?
Ask yourself:
“How did I misinterpret the value this person creates, and how can I put them somewhere they can win bigger?”
Because self-employment is hard. They know that.
You might be able to give them the same autonomy and impact inside your company that they’re finding outside it.
There’s no abundance of smart and driven people, why not try and retain them?
So the conclusion here.
If your employees are asking about side-hustles, congratulations!
You’re attracting ambitious, growth-oriented people.
Don’t mess with the mechanism that makes them great. ( in other words, let them hustle, outside work hours, in ways that don’t negatively affect the main job ).
If you fear their side-hustle outgrowing their job, that fear comes from insecurity, not strategy.
And if their side-hustle does outgrow their job, see if you can move to a place that fully uses their skills.
Winners want to win.
Let them.
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