Employee Moonlighting: 4 HR Ways to Prevent It

Moonlighting is a side hustle an employee with a full-time or a part-time job takes up, for one of three main reasons- to fulfil their need for additional income, to pursue a passion or to enhance their skills.

Moonlighting has become more common than ever these days and is plaquing, especially in the IT, tech, health, and education industries, creating much stir among industry leaders, startup founders and HR departments of organizations.

The CEO of Wipro, Thierry Delaporte said he is OK with someone having a side hustle but with absolutely no conflict of interest, and the chairman of the company Rishad Premji openly expressed his dislike for moonlighting. He further justified the sacking of 300 employees saying they were caught red-handed working with direct competitors.

On the other hand, there are some companies that do allow moonlighting. Deccan chronicles reported that Swiggy allows its employees to pursue side hustles under their pioneering moonlighting policy.

Some of the apparent reasons why business leaders are against moonlighting are- security threats to critical data and information, declined productivity and other ethical concerns.

What is a moonlighting employee?

A moonlighting employee is one that takes up a side job, outside the hours of his regular job to make ends meet, earn extra money without the knowledge of his full-time or regular job employer. A moonlighting employee while doing a side hustle may even use your company time and resources secretly, as an aid to get by their second job. Moonlighting employees grew in number during recent years as they were allowed the flexibility to work remotely without proper monitoring from the company’s end.

Types of employee moonlighting

Employee moonlighting is of diverse types, depending on the employee’s need. The 4 main types are-

1. Blue moonlighting

Not everyone is equipped enough or can handle a side hustle along with a regular full-time job, regardless of the reasons. They tend to become unproductive in of the two jobs or even both the jobs. This failed attempt at dual employment of an employee is called blue moonlighting.

2. Quarter moonlighting

Quarter moonlighting is when an employee takes up a part-time job that lasts for about 2-4 hours after their regular working hours.

3. Half moonlighting

In half moonlighting, the employee leaves almost no time for himself as he spends nearly half his free time after his full-time job in a part-time job that requires almost just as much effort as the full-time job to earn extra money.

4. Full moonlighting

This is when an employee successfully manages to handle two jobs simultaneously, a full-time job and a side hustle.

How does the tech industry play a role in enabling moonlighting?

It would not be right to solely blame the employee for moonlighting. We will tell you why. It is in the nature of an employee, a regular office going individual working a 9 to 5 job to wonder about an alternative path and think of making an extra income to afford a better and more comfortable lifestyle.

And honestly, working after your regular hours on a different job is not illegal, as long as you do not have to misuse the resources of your regular job to get it done and is not affecting the quality or productivity in your full-time job. But in reality, only few come through, which is why organizations are mostly against moonlighting.

Former director of Infosys, Mohandas Pai had stated that moonlighting is much more common among the entry-level salaried employees while compared to those in bigger, prominent roles.

Some of the major enablers of moonlighting were-

• The PANDEMIC, when everyone was required to work from home, giving them an increased opportunity to pick up side
• Failed system of monitoring remote working employees, giving them the opportunity to wander a new path.
• Surge in gig opportunities tempting people to make quick bucks.
• Higher level of technology that made it easy for moonlighters to work with bigger companies located miles away from them.

What are the drawbacks of employee moonlighting?

Moonlighting causes the overworking of an employee, as they have multiple jobs and responsibilities to handle, resulting in chronic stress, poor work-life balance not just affecting your health but also your productivity.

Some of the major drawbacks are-

1. Productivity downfall

Working multiple jobs causes physical and mental fatigue, further leading to weak memory, lower engagement, performance, and productivity.

2. Conflict of interest

If employees take up jobs from competitors, it can create a conflict of interest in the workplace. Helping your competitor develop related products or services in plain words is just unethical. You are basically cheating on your current employer that may have a financial impact on their business. It is a big NO.

3. Compromises confidentiality

If the employee takes up a similar job at another company, there can be an elevated risk of breach of confidentiality pertaining to products, data, or other trade secrets.

4. Abuse of company resources

Using the company’s resources such as company laptops, software, or other resources for their side hustles or second jobs is not right. It leads to abuse of resources.

But moonlighting is not illegal, and it mostly depends on individual company policies.

What are the 4 effective measures that HR can take to prevent moonlighting?

Increased job satisfaction and higher employee engagement, better benefits can definitely help manage moonlighting to an extent. Additionally, the involvement of HR in the matter can prove to be far more effective than you anticipated.

Let us take a look at how HR can be instrumental in preventing employees from moonlighting.

1. Open Communication with employees

HRs are known to be people’s people! Use this to your advantage. Appoint an HR expert and have open communication channels with your employees. Talk to them about why they are feeling the need to resort to moonlighting.

If they want to pursue a passion or need an additional income, as their employer you can offer them a flexible schedule allowing them to balance both. But do talk to them about effects of moonlighting on their business.

2. Create a moonlighting policy

You can have the HR department draft a proper moonlighting policy that can help prevent moonlighting from affecting your business. Before creating a moonlighting policy make sure you have addressed the following questions-

• Are employees prohibited from working in other industries or unrelated fields after working hours?
• Do employees need to notify their managers before taking on an additional job?
• What will happen if a staff member takes a second job without prior approval?
• How will this affect the employee’s right to the benefits you provide?

You can add one of these to the employment contract or agreement with the aid of right legal advice, making sure that you are not violating the state employment laws.

1. Non-compete

Employees agreeing to not work with a competitor for a specific time after the employment period.

2. No performance hinderance

Set out an expected performance from the employee. Ensure that they treat this as their main/primary job and that their side hustles will not interfere with their performance. HR experts draft this after seeking the right legal advice.

3. Do not think twice about taking disciplinary actions when necessary!

No, we are not saying you need to be hard on your employees. But in this case, if moonlighting is affecting the quality of their performance, then you must take the necessary action.

Here are some disciplinary actions you can incorporate-

• Issue warning letters if their graph of productivity has been lowering over time.
• Order suspensions if the moonlighting employees are performing poorly.
• Terminate the employees compromising confidential company information.

4. Track employee time and performance using effective productivity tools

After all your efforts of making a policy, talking to them about the consequences, provision of flexibility, if you are still worried about moonlighting employees, you can use an activity tracker, a tool that can be easily installed in computers.

• A versatile software can be linked to the timesheets to determine and validate the work being performed by employees on a daily basis.
• Project time tracking software is one of the effective ways of ensuring your employees do not take up additional jobs.

Closing words

Moonlighting can result in overworked, exhausted, unprofessional, and unproductive employees at the workplace failing to utilize their potential to the best of their abilities. HRs are the first line of individuals in a company capable of having a heart-to-heart conversation with your employees/colleagues about their problems, whether they are moonlighting or not, how moonlighting can affect their regular jobs and chances of progressing in their careers if they lose balance.

With the necessary information its easier for the HR to help boost job satisfaction, improve employee engagement, and define clear expectations via a moonlighting policy without snubbing the expectations and needs of employees.