A major new study into the workplace by leading HR software provider www.CIPHR.com reveals the enormous cost to UK employers of their staff working on side hustles during working hours.
CIPHR.com asked more than 1,400 UK workers in full-time employment, a series of questions to unmask the real impact that the side hustle phenomenon is having on UK businesses. CIPHR’s research builds upon data released earlier this year by Henley Business School that found 25% of UK workers have an active side hustle.
‘On the side seems to be ‘on the job’
Key findings from CIPHR’s study revealed a shocking level of workplace disruption from work done ‘on the side’:
- 62% of workers who have a side hustle admit to working on it during their main employment
- 60% of workers with a side hustle admit they spend up to two hours per day working on it
- 32% of workers with a side hustle admit to pulling a sickie to further their personal activities
- 65% of workers with a side hustle earn up to £6,000 and 24% of workers earn up to £12,000 per year from their side hustles
- Worryingly, 33% of people with a side hustle say it is the same or similar to their main role or employer’s business – and
- 46% of people with a side hustle do not declare their additional income with HMRC
Cost to companies is huge
The findings of CIPHR’s research do not make good reading for employers.
With the CIPHR research revealing that 60% of those workers working up to two hours per day on their side hustles whilst in work, this adds up to 26% of an employer’s wage bill being spent on these workers working towards their own benefit, not that of their wage paying employers (assuming a 37.5-hour work week).
Utilising wage data published by the ONS, www.CIPHR.com calculates the cost to UK employers of this gross misconduct to be just over £15bn*. Factoring in the cost of ‘sickies’ on top of that makes the potential cost even more staggering.
CIPHR’s CEO, Chris Berry, says
“The concept of the side hustle or moonlighting, or whatever you want to actually call it, has become a reality of the modern workplace that simply cannot be ignored. Online platforms for selling your professional services as a freelancer or by the hour are commonplace and the ease with which people can conduct business has removed a barrier to entry for workers that simply would not have been accessible to them previously. Employers really need to take notice as the cost of lost productivity to UK employers is staggering.”
Competition – from your employees?
CIPHR also reveals that 33% of those surveyed said that their side hustle activity is similar to the business of their employer or their employed job role, meaning that employees are actively creating a conflict of interest between themselves and their employer. Furthermore, 36% of employees with a side hustle admit to using their employer’s equipment in the process.
The most common reason for having a side hustle is financial with 31% of respondents saying they do so because their main employer doesn’t pay them enough. However, the entrepreneurial spirit runs a close second with 28% of those polled saying they want to run their own successful business.
Chris Berry, CEO at CIPHR also commented:
“Employers need to actively address employees’ use of company equipment and time for personal gain. Some companies will allow their employees to engage in competitive businesses or may not be able to restrict them from doing so, depending on the line of work. The boundaries need to be set out clearly and where broken, enforced. This is not a new issue in reality but it’s one made all the easier by modern technology. The fact that so many respondents are also choosing to not pay the proper tax from their side hustles is also a huge cost to the whole UK purse. It hurts everyone.”
For more stats and information on this study visit the CIPHR blog: www.ciphr.com/news/two-thirds-work-on-side-hustle-on-employers-time