A recent Bank of America survey found that 62% of Gen Zers and 56% of Millennials started a side hustle since the pandemic began. The survey found that the key motivators were that 53% wanted to earn extra money while 36% wanted to effectively fill their free time. But there is no doubt that the pandemic spurred innovation and business creation. The U.S. Census data showed new business formation rose by 42% in 2020. The gig economy is making way for the hustle economy.
What does this mean for corporate America?
Multiple studies have shown that having a side hustle actually boosts full-time job performance. One study found that having a side hustle boosted energy and positive emotions which, in turn, boosted performance. The researchers believed that having a choice in their side hustle left employees feeling empowered. The study also surveyed coworkers who reported better job performance from their side-hustling coworkers on days following side hustle experiences. As a career coach, this makes sense to me because Ive repeatedly seen amongst my students and clients that developing enthusiasm and purpose in one area tends to leak more fully into their lives.
It is important to make the distinction that a side hustle is not a part-time job. It is something you create for yourself, a way to make money while pursuing an interest, hobby, or passion. According to Side Hustle Nation, the most popular side hustles are online businesses (blogging, online courses, and affiliate marketing), freelancing and consulting, eCommerce, investing (real estate, crypto, stocks, etc.), self-publishing, local services (cleaning, notary services, pet waste removal), and gigs (DoorDash, Uber, etc.).
Corporate America has a lot to benefit from tapping into the hustle economy. The U.S. Bureau of Labor Statistics (BLS) reports that employee benefits make up 31% of an employee’s compensation. Hiring side hustlers and freelancers can save money not only in employee benefits, but in infrastructure such as maintaining office space, computers, and supplies. Additionally, employers can hire the right person for the job. Companies have the luxury of hiring experts for services that are not needed on a full-time basis. Outsourcing also frees up employees to focus on high-value work. Hiring outside contractors keeps companies agile when scaling to meet business demand.
However, there are some drawbacks.
It can be difficult to maintain corporate culture and worker engagement and outsourced workers may not be committed to the long-term needs of the company. Companies will need to demonstrate a commitment to all workers, whether they are employees or contractors, understanding that contractors may leave and return. Companies should focus on turning their contractors into ambassadors for the company.
Working a side hustle may sound glamorous, but it is not without its own hurdles. The biggest challenges to the side hustle economy are growth and marketing as well as finding time. But there are plenty of benefits. Working for a variety of companies helps grow skill sets and exposes workers to more opportunities. Side hustlers experience more independence and freedom.
The side hustle economy is just getting started. Experts predict that by 2027 freelancers will account for 86.5 million workers or more than half of the country’s workforce. Aside from necessity, the rise in side hustles is largely connected to advances in technology, low barrier to entry, and an increased interest in flexibility and freedom.