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Home / Industry / Human Resource /  The truth about moonlighting: It could be the future

BENGALURU : There is a lot of chatter about people moonlighting in the tech industry. This is cheating – plain and simple," Rishad Premji, chairman of Wipro, recently tweeted.

This has sparked a debate.

Interestingly, the thought is in sharp contrast to Swiggy’s announcement. The company said it doesn’t care what their employees do in their spare time if there is no direct conflict of interest. Demystified, this simply means that as long as they are not writing code for rivals Zomato or Dunzo in their spare time, Swiggy would be fine with it.

Illustration: Jayachandran
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Illustration: Jayachandran

Is it time to redefine the idea of moonlighting and the stigma associated with it?

Here’s an explainer into the many nuances of the issue. But first, we need to understand where the idea of moonlighting came from.

What explains the stigma?

The idea of moonlighting is derived from an era where employees sold their time—defined number of hours—to their employer in exchange for a salary but used part of this time to do other work, which may or may not have been paid for. In this context, the stigma associated with moonlighting was fair.

However, over the years, employer expectations from employees kept increasing. Workers were classified as ‘knowledge workers’ and expected to work beyond the regular hours, including weekends and even from home. This change in paradigm, without revisiting the idea of moonlighting, was entirely one-sided.

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Knowledge workers have now begun to express displeasure over this one-sided expectation. Employers in many industries have disproportionate clout because workers (both white and blue collared) are not unionized.

What role did WFH play?

The work-from-home regime during the pandemic has redefined several paradigms. Many of them are past their expiry dates—moonlighting is one of them.

To understand this phenomenon a little better, it would be helpful to peer through the fog and look at another phenomenon rapidly taking shape, namely the concept of gig work. There is debate on whether this would be the dominant employment model in the times to come or whether this is yet another passing fad.

The gig model received a massive boost in the US because of new age tech companies such as Uber, Lyft, Fiverr, etc. According to the ‘Gig Economy Index’, nearly 40% of the American workforce now makes at least 40% of its income via gig work. And to top it, more than three quarters of them say they would not quit freelance work for a full-time job for a variety of reasons like flexibility, an opportunity to realize their quest for fulfilment, and a craving for indulging in their passions.

In India, the phenomenon of gig work has moved far beyond just the drivers on platforms like Uber and Ola. Skilled workers—from beauticians, plumbers, makeup artists, tutors, delivery personnel, and technicians—on platforms like the Urban Company, BigBasket, and Swiggy are mostly on a gig mode.

The pandemic did to the white-collar workforce what the tech-platforms had done to the blue-collar work force—accelerated the shift to a gig mode. The forced work-from-home allowed many individuals with full time jobs to experiment with freelancing opportunities, in addition to their 9- to-5 jobs. Freedom from commute and the confinement within the four walls of their homes provided them the time, energy, and possibility to take on additional work. And, the internet made the gigs easy to discover.

The ease of cross-border payments through digital escrow accounts was an added advantage. Sites that offered gig opportunities like Freelancer.com, Gigzoe, Truelancer, and many others flourished.

What worries IT firms?

IT firms have some legitimate concerns about their employees doing side gigs, and these are mostly around loss of productivity and conflict of interest. And to a small extent, the fear of data theft if employees work from home.

Managers, however, should act on outcomes of low productivity and conflict of interest rather than imposing blanket bans on what employees can do in their free time. Low productivity manifests as tasks not being completed on time. Low productivity is often a result of insufficient training and hand-holding, or just simply an inability to estimate what can be reasonably accomplished in an 8-hour period. Just because managers do not have a reliable way of estimating how much time a task would take, expecting employees to be available for unlimited hours to complete tasks is not a fair expectation.

Do IT firms need a re-think?

After the covid waves receded last year, some large companies across the world began haranguing their employees to return to work. Employees didn’t easily accept this calling. Sometime in May 2020, in a big splash, IT services exporter TCS announced its intent to permanently move to a hybrid working model: it was branded as ‘TCS 25-25 Model’, which was about progressively reducing the percentage of its employees working from their offices at any point of time to a maximum of 25% by 2025, with the remaining three quarters working from home. TCS had rejigged its cyber security regime along with other practices to ensure that the quality and security of the projects were not compromised. “Our customers are comfortable with this model and want us to take more work that others are not able to handle. This has given us the confidence to come out with a bold new Vision 25×25," Rajesh Gopinathan, CEO of TCS, said at that time.

Nonetheless, after over two years of working from home, the company has announced an end to this practice. It is calling back its employees to offices and asking them to work from their deputed locations.

“On an immediate basis, we will continue to drive the return-to-office model because the 25/25 plan needs to be executed in a more controlled manner," Rajesh Gopinathan was quoted saying in a Business Standard article.

It would be interesting to see whether this ‘executing in a more controlled manner’ is a fig leaf for a change in the original stand, or if there is more to this than is evident to a lay person.

The entire business model of IT services companies is about managing the pyramids, keeping them bottom heavy, and controlling the entry level salaries of campus hires. This industry has taken Taylor’s time and motion study from an earlier era of manufacturing and applied it to the 21st century world of knowledge work. The choice of words for some of the core operating metrics is a clear giveaway: ‘pyramids’; ‘onsite-offshore ratio’; ‘utilization’. Contracts with overseas clients have a price escalation clause tied to the average wage inflation. Little do overseas clients know that wage inflation, as one knows, doesn’t exist in this industry because entry level salaries are controlled tightly by recruiting from more and more obscure campuses every year.

Therefore, while companies benefit from these price escalation clauses, the gains are not passed on to the right beneficiaries. As a result, the average quality of talent and the quality of outcomes have both suffered. Over the years, the quality of leadership at every level has been compromised.

Premji’s tweet is unlikely to remain unchallenged— by his own employees more than anyone else. Asymmetric employment contracts that placed unreasonable and arbitrary restrictions on employees were accepted in the past. Clauses relating to non-compete, or what employees could or could not do in their free time, or lengthy notice periods, were never seriously disputed. Companies are well within their rights to place reasonable restrictions around all of these in exchange for a job but, the time has come to question the validity, relevance and even wisdom of going to extremes.

Reasonable restrictions?

It is not unreasonable for an employer to expect employees not to disclose confidential information provided what constitutes such information is defined. Similarly, it is not unreasonable for an employer to expect an employee to give a certain number of hours a week (say 45) to a job for which she is paid a salary. It is also reasonable to expect that an employee should not be working for a direct competitor in her free time.

Unreasonable ones?

To expect an employee not to do what she pleases in her free time, including using any skill she may possess, to supplement her earnings, is totally unfair.

Similarly, expecting that an employee should not be performing work other than that of the employer on company premises is unreasonable for a simple reason—work is no longer that simple and strait-jacketed.

When companies can expect employees to use their home for performing office work, what’s the logic for having a clause that says performing any kind of work other than that of the employer on office premises is not permitted?

Employees often end up working for the company from home because all work is not lumped back-to-back over an 8-or 9-hour period. Similarly, having an unreasonably long notice period, and insisting on employees serving this notice period, irrespective of whether they make sense or not, just to spite them or make it difficult for rivals to recruit them, is a violation of the idea of a free labour market.

There is also the question of whether an employee should disclose the other gigs that she is doing. Disclosure is a fair requirement if you are accepting a gift from a vendor that is above a certain value or if you are performing some work for a company that could be considered a competitor. But the requirement to disclose every other gig that an employee may perform in her free time is a violation of basic privacy rights.

Asymmetric clauses

Asymmetric liability clauses, especially when it comes to blue-collar workers, are common. Ecommerce companies routinely hold their staff responsible for any items not delivered to customers even if there is no way to prove that the delivery partner has been responsible for pilferage. What makes this even worse is that this happens routinely even if there is no stated policy on this. The frontline supervisory staff take these calls and the managements routinely turn a blind eye. Because there are no unions that the workers could approach, they have no choice but to live with such practices or move on. Denial of freedom of association is the norm.

Swiggy’s stand?

What employees do during their spare time is none of the company’s business—this is Swiggy’s stand, as stated earlier.

If an employee pursues her passion in her free time, she may also be able to bring her best to the workplace. Managers who come from a background of distrust, or just simply a rigid mindset, won’t get this.

Swiggy’s stand also underlines that we are clearly reaching the end game on the debate about hybrid-working and moonlighting. Companies that take a restrictive approach, one that is suffocating for their employees, will find it difficult to attract talent. Plain and simple.

Any mega-trend is almost always preceded by divergent opinions—those that spot the trend and quickly send signals that they intend riding the wave and those that resist it until they have no option but to reluctantly embrace the inevitable.

The choice that companies make will determine many other trends that would be triggered, including formation of employee unions and company decisions being challenged in courts as unfair and one-sided. Companies need to make these choices wisely. We are already hearing some sane voices. Companies need to take them seriously and do the right things.

(T.N. Hari is co-founder, Artha School of Entrepreneurship)

Elsewhere in Mint

In Opinion, Ajay Piramal & Monal Jayaram argue why literacy should be much more than what it means today. Parmy Olson explains how contact lenses are replacing phone screens. Deepak Nayyar argues growth is more than arithmatic and economics

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