Are Your Employees Moonlighting? Let Them

A new source of outrage has appeared on the horizon: moonlighting. Companies are cracking down, or warning that they will crack down, on employees who earn money on the side doing work for other companies or for themselves. It hasn’t fully taken hold yet, but the rumblings are out there, and moonlighting will likely soon emerge as the latest cause for gnashing teeth in the management suite.

Maybe your employees drive for Uber in the evenings. Or they take on contract work part-time that they can do from home. They start their own business, or they make money doing something other than what we want them to do, which is to devote themselves above and beyond to the company that employs them “full-time”.

Moonlighting has something in common with the last cause for a similar worry, quiet quitting, in which an employee stops devoting themselves to their work as wholeheartedly as we want them to. Both are taken to be signs that workplace culture is fraying and that the bonds between employees and their “work family” are weak. Both phenomena have been met with consternation and retribution. The solution many turn to, in both cases, is to identify guilty parties and terminate them.

As responsible leaders, we encourage employees to pursue their personal interests, volunteer their time for good causes, and live the best lives they can, so that they stay happy and productive. But then, for some reason, if what they do involves making some extra money, then they have crossed a line and we cannot bear it.

We must understand that moonlighters are not the natural enemies of innovators. If anything, moonlighters are our unacknowledged, disengaged innovators. By doing extra work elsewhere, they are resisting the status quo, refusing to accept things as they are, and making changes in the name of greater effectiveness and prosperity. They have that much in common with the most forward-thinking entrepreneurs.

Accept the Inevitable

Although it is drawing more attention than ever, moonlighting is not a new phenomenon, and in fact, it is almost an inevitable one. Most people like making money. Some people — many people — are willing to give up some of their leisure time in order to earn more of it. They have the energy, they are willing and able, and companies are hiring part-time workers all the time.

If anything about this is new, it is the sheer proliferation of moonlighting opportunities. Uber, Lyft, TaskRabbit, Upwork, DoorDash, Instacart, and Fiverr are just a handful of the tools that make it easy to find something to do for extra money, whether it’s driving, editing, shopping for other people’s groceries, developing software or assembling new furniture. People who want to make more will find opportunities.

And let’s face it: many of our employees need the extra cash that comes from extra work. Some of them are saving for a new home. Others need to pay off student loans. That, as it happens, is the reason I spent some of my time moonlighting, early in my career. I had to pay off loans and wanted to do it as fast as I could, so put in extra hours. And it worked.

There are more than forty working hours in a week. And just like with cooking a meal, the work we do is not perfectly linear. There’s no point sautéing the bell peppers until the chicken is done roasting — and so why not, while you’re waiting on what’s in the oven, wash the dirty dishes that have been sitting in the sink all day? Why not let our people occupy themselves in their inevitable downtime in whatever way they wish?

When Should We Be Alarmed?

There are, of course, limits to most things in life. Moonlighting is no exception. We must have boundaries.

If someone is moonlighting for a competitor, then by all means, that must be addressed. If someone is starting a competitive business, then a conflict of interest has arisen – and that is unacceptable, though if we’re being honest, it happens all the time, particularly with talented individuals who are not being fully leveraged and rewarded in their organizations.

And we should not tolerate the sharing of trade secrets in the course of moonlighting. The inadvertent disclosure of intellectual property is a real risk, as someone might overestimate their ability to compartmentalize their work, to keep one job separate from another, and overshare without even realizing it. But that is not an inevitability, and it should not be treated as such.

There are limits to what organizations can allow. But barring circumstances like these, banning moonlighting is a stark overreaction, and there are things we can do to prevent it from becoming a real problem without resorting to tyranny.

1. Look for Root Causes

Moonlighting is not an issue in itself. It’s a symptom if anything — an indicator that tells us something is up. It’s the check engine light coming on, a suggestion that we may not be getting something right.

Moonlighting can arise in response to many factors: poor engagement with our employees, inadequate compensation, limited rewards, and career growth opportunities, or just plain lack of personal fulfillment.

We can’t necessarily fix all of those things –  and sometimes it’s not about us at all. Sometimes people just need the extra income. But we can look hard at how we’re running our organization and think about where we’re falling short. What are we not doing to ensure our employees feel right at home where they are? What else can we reasonably offer them that will keep them happy and devoted to us – if that is something we strive for?

2. Make Our Position Clear

Probably the most effective measure we can take is to craft a reasonable, clear, and transparent policy when it comes to moonlighting, and communicate that to our employees. We can set limits. We can ensure that all understand there are lines that cannot be crossed, points at which moonlighting has ventured into sheer dishonesty or conflicts of interest.

I’ll say it again – moonlighters are the ones who take action. They likely possess the characteristics of the most cutting-edge innovators, and by working outside the company they are revealing themselves as such. Let us allow for that, without compromising ourselves, by setting the loosest limits on working elsewhere that we can, but articulating those limits with utter clarity.

3. Harness Moonlighters’ Energy

A moonlighting employee is driven, motivated, and energized. They are willing to put in extra hours for extra compensation. Let us ask ourselves: what have we done to make the most of that? Is there a more rewarding way we can redirect their reserve energies not to other companies but to ours?

It’s not at all out of the question, too, that moonlighting only fortifies our people, and makes them better innovators. Who knows? Maybe Cheryl, our Senior Product Manager, does some contract work on the side. She does it to make extra money, but it has the added benefit of keeping her on her toes. She sharpens skills over there that she uses all the time in her primary role, and it only makes her better at her job.

Moonlighting can be a kind of continuing education in this way. We don’t balk at employees attending professional conferences that have the same potential benefit – and so why be up in arms about this?

The Bottom Line

I believe that banning moonlighting is absurd and counter-productive. It punishes entrepreneurs and innovators who don’t accept the status quo in their life. It’s bound to make them disengage from their work, or even quit. We cannot treat our employees as antagonists. Nowhere does it say we have to glow with approval when we see how they spend time off the clock.

We must resist the urge to start a witch hunt, and instead either address the underlying problems that give rise to moonlighting — or, better yet, take a deep breath, implement sound policies, and simply stop being paranoid about it.

If we want to retain our most innovative employees, then let’s set them free. People who want to moonlight will do so. People who abuse the system will be caught. And you’ll attract the innovators who want to stay in your company.

This article originally appeared in HR Leadership Excellence on December 5, 2022

‍