Oct. 19, 2025

Why Side Hustles Skyrocket Staff Morale

Interviewing Chip Higgins, author of The Bizzics Way: Powering Your Small Business to Maximum Momentum, allowed me to reflect on how side hustles are increasingly common, and employers are seeing clear benefits. Employees engaged in passion projects often perform better in their primary roles. Instead of being a distraction, side gigs can energize and upskill staff. With one in three Americans having a side hustle, organizations gain from the additional skills their workforce develops. Ultimately, side hustles enhance employee effectiveness.

Side Hustles Raise Performance

Employees with side hustles excel because their side projects provide positive energy, boosting motivation and engagement at work. Research from the University of Iowa shows employees frequently perform better after a rewarding side hustle experience. While minor distractions may occur, the overall benefits to performance and morale are substantial. Psychologists note that a fulfilling side hustle helps employees reframe their purpose and recharge. Engaging in rewarding projects provides mental detachment from work stress, so employees return refreshed rather than burned out. A side gig can relieve stress and boost motivation, benefiting both the individual and the employer. Similarly, positive hobbies or exercise routines improve mood and energy.

Why Employees With Side Hustles Bring Fresh Perspectives

In addition to emotional benefits, side hustles help employees develop new skills and sharpen existing ones. Side projects often provide experience in areas not covered by their primary role, which may be applied in the workplace. For instance, managing an online store helps develop digital marketing skills, whereas freelancing as a graphic designer can foster creativity and improve communication. Over time, these abilities make employees more effective and innovative. Side ventures foster an entrepreneurial mindset, teaching employees to plan, prioritize, and solve problems efficiently. Managing even a small side business builds practical skills such as budgeting, customer service, and content creation. Employees with side hustles continuously improve in key areas, including:

Time management and efficiency (balancing multiple commitments forces better planning and prioritization).
Marketing and sales (the skill of promoting a product or service and understanding customer behavior).
Creativity and adaptability (innovating new ideas for the side gig and pivoting when challenges arise).
Customer service and communication (dealing directly with clients or users outside one’s main job).
Financial savvy and budgeting (handling a side venture’s income, expenses, and taxes).

These skills directly benefit employers, since side hustles provide real-world entrepreneurial training, making employees more resourceful and proactive. Managers gain since they leverage this expertise to strengthen company projects. Encouraging side gigs, as long as they do not interfere with primary duties, enhances job performance, loyalty, and innovation.

The Importance of Balance and Boundaries

Employees with side hustles carry some risk, so maintaining balance and clear boundaries is essential. Employees should keep side ventures outside working hours and avoid conflicts of interest. Separating both roles helps prevent distraction and fatigue, allowing employees to benefit from side hustles without compromising their main responsibilities.

Managers should set clear expectations and enforce reasonable rules, such as prohibiting the use of company time or resources for side projects and avoiding direct competition. Flexibility is essential, as employees will always have outside interests. The focus should remain on job performance. If a side hustle affects work quality or timeliness, address it through standard performance management. Supportive policies help employees thrive and benefit the company, while overly restrictive rules may lead to employee disengagement.

How People Managers Embrace Side Hustles

Forward-thinking organizations view side hustles as opportunities. Managers and HR leaders benefit from open dialogue with employees about their side projects, focusing on skills and motivations. This approach supports personal growth and reveals talents valuable to the organization. Side hustle experience on a résumé often signals creativity, self-motivation, and a willingness to learn. As with training, employees should be encouraged to apply new expertise gained from side hustles. Recognizing these contributions sparks innovation and helps employees feel valued. Aligning personal growth with organizational goals builds a sense of partnership. Fostering a culture of trust and flexibility is essential. Managers who focus on outcomes rather than micromanaging encourage engagement and loyalty. Valuing autonomy and offering flexibility, such as remote work or adjustable hours, helps employees balance commitments and supports morale and retention. Embracing side hustles drives innovation and builds a more adaptable organization.

The Dark Side of Side Hustles: One Person’s Seven-Year Journey

Tom Blake spent seven years testing over 100 side hustles. He learned about hype traps, choosing the wrong focus, failing too slowly, and neglecting core ventures. His experiences highlight risks employees should consider before starting or continuing a side hustle. For example, phone farming uses multiple smartphones to generate passive income or digital rewards by running automated tasks for reward-based apps. While phone farming generates little money, it taught Tom the importance of being critical and cautious, a skill that translates to detecting phishing attempts by defaulting to skepticism and requiring evidence. Furthering this thought process, think through these definitions:

Wrong bucket selection. Tom Blake classifies side hustles into four types: quick cash, delayed cash, career fuel, and high-leverage. Most beginners choose high-leverage for its promise of scale, when they may actually need immediate cash flow or skill development. Misclassification wastes time and limits progress. The key lesson is to select the proper focus for current needs.
Failing too slowly. Tom advanced at a pace that hid growth opportunities. Learning about how he handled all tasks himself and published infrequently created a false sense of progress. Improvement came when he set clear goals, focused on effective strategies, and outsourced low-value tasks. In the workplace, this is similar to project drift. Setting weekly targets and tracking progress maintains momentum.
Starving the Golden Goose. Many pursue new ideas before their main venture is stable. Tom advises against starting unrelated projects that divide time and attention. Focusing on what core side hustle supports in relation to sustainable growth.

What Managers Should Take From The Dark Side of Side Hustles

Screen for clarity in interviews if a side hustle appears on a candidate's resume. Ask candidates to explain which category their side hustle fits into and why. Listen for realism and practical thinking.
Ask about the results candidates achieved from their side hustle and encourage them to maintain healthy boundaries, such as not working on side projects during company time. Company performance must remain the priority.
Assess how candidates or team members view resources and whether they treat time as if it is capital. Ask about the economic or learning return of their side project, and value practical decision-making alongside ambition.
Avoid judging employees for their side hustles. The value of a diverse team lies in the unique strengths and perspectives each member brings. Celebrate diversity through actions and contributions.

What Employees Should Take From The Dark Side of Side Hustles

Set deadlines if a tactic does not show movement by a pre-set date or metric, pivot, or stop.
Protect the Golden Goose. Do not launch a second venture that starves the first.
Take profits and lower fixed costs. Most side hustles will not replace a primary income quickly. Focus on the skills gained and how they will also benefit an employer. One way to increase earnings is to help an employer achieve greater success, which leads to higher compensation.

Conclusion

Employees with side hustles often perform better at work. Their additional pursuits bring happiness, new skills, and a sense of empowerment that translates into greater productivity and creativity. With clear boundaries and support, side hustles become assets rather than distractions. Managers and HR leaders gain more engaged, innovative team members, while employees pursue their passions and excel in the workplace. When considering candidates or team members with side businesses, remember the potential benefits. Side hustle employees typically become star performers, bringing extra energy, expertise, and enthusiasm to drive organizational success.

From my experience performing stand-up comedy as a side hustle, there were many nights when the thought, “What is the point of doing this?” became top of mind. Then the pandemic attacked many of our careers, and in-person events suffered. In contrast, holding a full-time job as a sales manager for a software solution designed primarily for in-person use meant the risk of losing my livelihood while supporting a family was terrifying. Reflecting on that time, the skills that carried my career were the ability to be creative, think strategically, and pivot quickly while answering the following questions:

What does our ideal customer want to gain from this time of change?

The nights of bombing behind the microphone taught me that this time is temporary, and the questions that needed an answer were:

What skills are required for improvement so we all win as one unit?
What sets us apart from the competition to conquer the market?
What would need to be true for this team to win?

We started a project with these questions being the framework for our discovery, and three months later, sales rocketed to over 200%. To the person reading this, wondering, "Will my side hustle ever become a reality?" Professionally, the wrong questions are being asked to align with answers that move desires closer to real-world results. Questions that will bring results into reality are:

What skills will be gained that are leverageable for the team and will benefit from my talent?
What interpersonal skills may be enhanced as a result of the journey with this side hustle?
What is the worst thing that will happen if I fail?

The last question is crucial to consider; it means we are still here and have the opportunity to keep moving forward together. Failure is an event, not a person. Being able to accept feedback is a non-negotiable life skill that many people struggle with. The good news is that, in reading this blog, we now have a chance to reflect on the internal feedback of what we want to achieve. My one call to action is to pick one thing that has been a failure from having a side hustle and define it as an event, then answer what was learned from it, if still alive, and able to leverage it as a learning experience, then acting on the side hustle was a success.