The Necessity Of The Side Hustle In The Age Of AI

By Yali Saar

One thing that older executives may not realize is how many of their younger employees have “side hustles” – second jobs and small businesses that compete for employee attention. An astounding 53% of Gen Z, half of Millennials and 40% of Gen X now have a side hustle, and 44% believe they will always need one.

Kelsey Woodin, a 34-year-old mother of two young boys in Santa Maria, California, works a full-time day job at a supplement company while running her own wedding coordination and event-planning business on nights, weekends, and during her lunch hour – frequently from her car.

“That’s what it takes right now in California,” said Woodin, who launched Woodin You Like To Party in 2019 – not only because she excelled at party planning but also because she was “tired of living paycheck to paycheck” and struggling to afford a family trip to Disneyland.

Azia Lavonne, 25, works a full-time job at a medical practice in Raleigh, North Carolina while attending graduate school and running her own side business, Strength in Neuro, doing neuromuscular training and injury prevention with dancers and other athletes. She hopes to open her own wellness center someday.

“My business is something that I am super passionate about,” Lavonne said. “You feel really good when you have a purpose. I am waking up every day to do this thing that helps me, but it’s also really helping other people.”

Americans have been starting businesses at record rates since the pandemic hit, but few have illusions of running corporate empires. Eighty percent of small businesses are run by a single person offering freelance services, often to supplement their income during a period of economic disruption.

It’s easy to see why. Housing, food, and fuel costs have climbed sharply in the past four years, not just in California, but in cities across the country.

While deindustrialization and globalization have cost Americans millions of manufacturing jobs in the past few decades, knowledge economy workers now face their own existential threat in artificial intelligence. The tech sector has already laid off hundreds of thousands of skilled workers over the past year, and McKinsey estimates that AI could replace 12 million more jobs by 2030, with the greatest impact on low-wage earners.

Black and Latino workers and women are driving the greatest growth in business creation, as they attempt to reap the full benefits of their labor and gain financial independence.

“I feel very confident that wedding planning and event coordination is something AI can’t take control over,” Woodin says. “AI can’t be there to tell you how and when to walk down the aisle and which decorations go with what. I’m a person – I’m gonna give you that personal touch.”

As the CEO of Tailor Brands, a comprehensive business-building platform that has helped hundreds of thousands of small business owners like Woodin and Lavonne navigate the challenges of fledgling entrepreneurship, I’ve gleaned insights companies can use to manage employees juggling multiple commitments.

Start by dropping assumptions that employees with a side business are a problem. Robert Weiss, CEO of Roar Social, a new Gen Z social media platform that raises money for social causes, has managed many young employees at his fully remote company. “Often the busiest employees manage their time best,” Weiss said.

Weiss believes flexible policies help companies attract and retain talent. “Having a culture that supports an employee’s side hustle is critical for any modern company. As long as it doesn’t interfere with their primary job performance, a side business can often make for a happier employee. Allowing an employee to pursue something they are passionate about while making ends meet definitely helps retain talent. And, an employee may even gain business skills that could prove useful to my company as they advance.”

Margaret Hinch, CEO of Thought Lens, a Human Resources consulting firm, advises managers to set clear expectations and maintain open communication. “I think it is common, especially for young folks buried in debt, to be working multiple jobs in order to survive in certain cities,” she said. “What an employee does on their own time off the job – whether it’s nights or weekends – is not necessarily the business of the employer, and the employer can’t forbid it unless it’s competition. That’s what I typically see in agreements – people asking for disclosure if it can impact the current employer.”

On rare occasions when employees let side gigs distract them from their main jobs, it’s usually obvious from work performance. Hinch advises direct conversations and encourages employers to set policies specifying that employees must be reachable within 15 minutes during specific work hours.

Like Weiss, however, Hinch believes that a side business can feed workers’ souls, pad their incomes – and also can benefit their employers. “With technology, one of the biggest skill sets is learning how to pivot and change and continue learning,” Hinch said. “I actually think people who have multiple jobs or multiple interests are the kinds of employees that you’re probably going to want in the workplace.”

Woodin launched her event planning business just before the pandemic crashed and burned every party for months. Despite that tough start, she’s now fully booked with events each weekend and can finally afford that family vacation. “I’m actually surprising my kids and taking them to Disneyland,” she said. “It’s because of all the work I’m doing right now that I’m able to do that for them.”

– Yali Saar is co-founder and CEO of Tailor Brands, a comprehensive business-building platform helping entrepreneurs start, manage and grow their businesses. From legal incorporation to expense management and branding, Tailor Brands provides all the tools, services, and personalized guidance needed to build a successful business – all on a single dashboard.