Why the side hustle matters so much - Meaningful work - John Dore - I by IMD (2024)

My daughter recently threw herself out of a plane while strapped to an Australian man she had only met that morning. Thankfully, she only told me this after the event. After watching a video of her landing safely on a beach, I poured over the adventure holiday firm’s website, noting that the company always uses two parachutes, a main parachute and a reserve, designed to work independently of the other.

It seems many of us today are managing our careers and future selves in much the same way — packing not just one parachute but two. In a world of uncertainty, if you want to future-proof your career and prospects, it would be foolish to focus your efforts wholly on where you are. If you have more to give at work — and many reading this will — your most viable future outlet is often likely to be elsewhere.

People have decided to play elsewhere

Gary Hamel once memorably said, “Life is too short to be spent on inconsequential problems,” and for too many employees — even senior managers, the internal machinations of large companies are increasingly felt to be pointless and tiresome. Firms may be ambitious for the future, but as Peter Hinssen, a serial tech entrepreneur, puts in his book The Day After Tomorrow, too many hours are spent on sorting out “the sh*t of yesterday.”

The old motivation levers are now less effective, and employees expect their work to fulfill them in more meaningful ways. A study conducted by Harvard Business Publishing in 2022 found that 90% of the global employees and executives polled responded that “their work should bring a sense of purpose to their life.” While organizations belatedly strive to define their purpose, the clouds are gathering. The future rewards of hard work now seem less certain, with AI and machines poised to replace many roles. Many employees realize that what got them there won’t get them elsewhere.

Meanwhile, something strange is happening, posing an intriguing puzzle for organizations and their leaders. According to Barclaycard, one in 12 people in the UK, the equivalent of 6.5 million in the country, now have a side hustle. This is not just a UK phenomenon but a growing global trend. A recent Michael Page survey of employees in continental Europe found that 62% are seriously thinking about or have already started a side hustle.

The methodology varies worldwide, but other large sample studies reported that 34% of people in Hong Kong and 54% in Singapore are already engaged in a side hustle. One recent survey in the Philippines found a remarkable 77% reporting an active gig outside their full-time job. In April, Market Watch in the US found that more than half (54%) of Americans say they’ve adopted a side hustle in the last 12 months, with younger workers the most likely to take on a side gig. A significant proportion of those with side hustles are professional and well-paid employees, and for these, the hustle is about so much more than earning extra cash. Employees find their most productive, imaginative, and satisfying hours are self-determined and devoted while moonlighting away from the orbit of the employer.

After the deleterious impact of lockdowns, growth has returned for the small owner-managed enterprise. The New Startup Index, recently published by Nat West, found that over 900,000 new companies were incorporated in the UK in 2023, making it a record year for new businesses. A good barometer for the global growth of the side hustle is the exponential growth of unique online stores hosted by the internet services platform Squarespace. In 2020, Squarespace hosted 12,748 stores globally. In early 2024, this was 300,000 — a 2,000% increase in just four years. Over half of these stores sell less than ten different products. These micro-enterprises are facilitating the side hustle in a way not seen since Taobao (part of Alibaba group) transformed the e-commerce market for small businesses in China.

For many, the side hustle is a necessity caused by the cost-of-living crisis to cover debts or to make up for low pay. But whatever the motivation, there is often a personal development dividend. Side hustlers gain from the stretch, adventure, and learning from their chosen pursuit, but for an employer, the energy created is lost. The benefits of new ideas, or personal growth, are not seen by an employee’s managers, colleagues, or clients. 

This is not just about fickle “Gen Z-ers,” as the side venture is also attractive to older, experienced employees. Expediting a move to the next level, or a desire for more purpose and meaning, is often the motivation. For the ambitious of any age, the side hustle seems to be the better outlet for their energy than their primary employer.

What does playing away look like?

Side hustles come in many different forms, and new opportunities are emerging. Most hustles are small and serve a personal interest, rather than a money-making exercise, though some, if scaled, can be hugely lucrative. Being a content creator has never been easier or more popular, whether via YouTube, building a podcast audience on Spotify, or reaching a multi-channel online following across a range of platforms.

Many of these platforms have become outlets for selling books, t-shirts, and merchandise, and e-commerce platforms like Shopify, Wix, and Weebly, and a dozen others have grown to serve online demand for quirky, unusual, and bespoke gifts. Others use their creativity in a more traditional way as photographers, videographers, copywriters, painters, pottery makers, or by using their valuable craft skills to design clothes or make and sell handmade goods.

Professional expertise can be monetized through bookkeeping, social media marketing, advisory, and consulting services. Those with some capital might look at property development and renovation while monetizing their assets through Air BnB or direct letting. The outdoors appeals to others, as does being a local history tour guide, walking dogs, valeting cars, gardening, and arranging cycle and hiking tours. Some resell used or vintage goods, rare vinyl records, comics, and fan collectibles.

With the arrival of Chat GPT and other AI tools, expertise in understanding the future of knowledge, technology, and content generation will create a huge new market for individual expertise that large firms are too big or too slow to capitalize on.

Over two-thirds of respondents, many of them senior managers in large, well-known companies, are actively working on something “elsewhere” from their normal day jobs

A bridge to your future self

In May 2024, I ran a poll among my network to gauge their appetite for side hustles and motivation. The results are small in sample size but insightful among a largely professional segment. Over two-thirds of respondents, many of them senior managers in large, well-known companies, are actively working on something “elsewhere” from their normal day jobs. Twenty-nine percent responded, “I wish I had a side hustle, but I have no time to play.”

Only 6% said their side hustle was a “necessity” because they needed the additional income. Those with an active side hustle saw it as fulfilling some other purpose, either in satisfying some personal “passion” (41%) or as “a bridge” (24%), a different role that they hope to do in the future. This second parachute may not be fully deployed yet, but it is a way to navigate a possible new direction without committing to the risks that an untested career switch might involve.

What can employing organizations do?

Hybrid work is hugely popular with employees, but it also risks loosening ties between employer and employee and, more worryingly, between employee and employee. It appears that those with a side hustle have adopted a kind of polyamorous attitude to their employment, with more passion found in their adventures off-piste. This trend should worry employers, but only the most enlightened are likely to do anything about it.

Organizations need to realize that they, too, need to provide more scope at work for adventure, fun, and professional stretch and to institutionalize its importance. I recently met up with a friend at Google. Only a few years back, he had benefited from the firm’s policy of allowing 20% of the workweek to be dedicated to interests outside of his regular job responsibilities. He did not use that time to double down on learning another coding language or shadowing a mentor. Instead, he enrolled in a city technical college and on Fridays, he learned how to maintain and restore old motorcycles. Very few firms do this, and he admitted that even within Google, such an indulgence would be much more difficult now.

Firms need to do more to encourage experiments, create new opportunities, and give a clear sense of what is independently possible within the scope of the firm. Many senior leaders talk of the need to “unlock the creativity,” harness the “entrepreneurial spirit of their people,” and encourage their talent pools and new hires to work together on innovation. Often, this is less about improving productivity in an aggregated sense across the firm than gaining more from the discretionary effort of the most talented, ambitious staff. It is one of the reasons smart companies and future-focused CEOs continue to invest in learning and development, internal collaboration workshops, and even sponsoring executive education from major business schools.

Their efforts are laudable, but they will need to work even harder to turn the tide. Much of the discretionary effort they seek to capture is already being deployed during late nights, busy weekends, and on vacation. There is no lack of human initiative, invention, or entrepreneurial spirit to power growth within organizations. The problem, though, for these firms and their executive leaders is that the passion and creativity sought are already being energetically deployed. Elsewhere.