The Real Competition with Non-Competes

My home state of Minnesota has just become the fourth in the nation to ban non-competes in nearly all employee agreements. While employers now worry about the outside world poaching employees and ideas from their organizations, they are likely missing out on the real competition which lies right within their four walls.

When most people think of a non-compete, they usually envision a scenario where a Walmart employee is unable to work at Target, or an executive at General Mills is prohibited from leaving to work at Kelloggs. Traditionally, this has been the case, but not enough people realize that employees are not necessarily considering the competition as a new option, but rather their own business or entity.

We are now in the era of the side hustle!

A new report by LinkedIn estimates that over 50% of the U.S. population has at least one side hustle. What used to be considered clandestine and referred to as “moonlighting” is now anything but under the radar. Furthermore, many people used to believe that only low-income earners engaged in side hustles to make ends meet. However, this is no longer the case, as 62% of individuals earning $100,000 or more report having some form of additional income alongside their main job.

With the pandemic opening up remote working options like never before, individuals have found it easier than ever to find time for their side hustles, whether it involves driving for Uber, setting up an Etsy shop, or running a dog-walking business. And the effort is paying off – quite literally! Side hustling is estimated to bring in an additional $50 billion in revenue for Americans each month.

The real revelation is understanding that side hustles are not solely about earning money. In many cases, they serve as a way to explore a new career direction or pursue a passion that seems unattainable through regular full-time employment. This is especially true in the war for talent with the younger generations. Having launched their careers in remote environments, Millennials and Gen Zers do not feel tied to the confines of traditional work. In fact, Forbes discovered that 67% of Millennials and 72% of Gen Zers have side hustles. Unfortunately, many older generations perceive it as an “either/or” situation – either you work at our company or you do something else. However, the younger generations see it as an “and” – they can work for an organization and pursue their side hustles simultaneously.

Of course, employers should keep an eye on the competition in the outside world, but at the same time, they should explore ways to collaborate with their employees internally. They should inquire about their employees’ side hustles and even consider promoting them. It can be an effective retention strategy, as employees would feel more loyal to a company that supports their endeavors. Moreover, employees would be motivated to work harder and demonstrate that their side hustle does not impede their job performance. Most importantly, it is an easy way to stay aware of the real competition. The data clearly shows that side hustles are prevalent, so why not have open discussions and even embrace them? Side hustles are not going away, and now the law says they don’t have to!