Why the decline in moonlighting is good news for the tech sector - and techies

The contentious issue even reached the Parliament, compelling the Minister of State for Labour and Employment, Rameshwar Teli, to clarify that, “As per the Industrial Employment (Standing Orders) Act 1946, a workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer."

While moonlighting remained a topic of fervent debate, recent reports from Mint indicate a decline in such activities by 70-90%, largely the result of fewer freelance gigs, subdued growth in the IT sector and the end of work-from-home policies in many offices.

The issue of moonlighting erupted last July when an HR executive from Wipro discovered some employees were concurrently working for competitors. A detailed probe resulted in a slew of terminations.

Following Wipro's lead, tech behemoths like Infosys and IBM issued warnings against side jobs. Wipro's chairman, Rishad Premji, expressed his disapproval on Twitter, now renamed X, saying, “There is a lot of chatter about people moonlighting in the tech industry. This is cheating – plain and simple."

However, there were contrasting views as well. Tech Mahindra's chief executive, CP Gurnani, felt that as long as employees were not committing fraud, or working against the values and ethics of the employer and were also meeting productivity norms, there was no harm in them making an extra buck on the side.

But Gurnani was an outlier, and understandably so. Companies spend a lot of money training their people. Infosys, in its ESG report for FY23, disclosed that on an average, each employee received 130.5 hours per year of training, while TCS reported even higher numbers. Globally, the internal training budget of Fortune 500 companies exceeded $360 billion, according to Research.com data.

More than the costs, employers are worried about data confidentiality and strategy leaks to rivals. Since a bulk of the revenues earned by Indian IT companies comes from outsourcing, with stringent data confidentiality clauses with clients, moonlighting can seriously hurt their relationships with clients.

Even those companies which have formally allowed employees to pick up a second job – like Swiggy, for instance – do so with a lot of ifs and buts attached. But an employer’s definition of side work varies greatly from what employees think a second or moonlighting gig is. “Be it volunteering with an NGO, working as a dance instructor, or content creation for social media, Swiggy firmly believes that working on such projects outside of one’s full-time employment can significantly contribute to both professional and personal development of an individual," the company’s policy announcement said.

Others may not have formalised such announcements, but most have no problems with employees doing things outside of work which don’t conflict with the company’s area of operations. TCS’s global head of the digital workplace unit, Krish Ashok, for instance, is a well-known humourist, a regular columnist, a trained musician who both performs and uploads compositions on streaming platforms and is a noted food blogger and author, all of which have in no way impacted his career.

It is utilising the same skills for which one has been hired for – and often, expensively trained for as well – for a rival which riles employers and understandably so. Employees, on the other hand, often see moonlighting as a means to add to perceived inadequate salaries, or lack of stimulus and challenge in their day jobs. An academic study on the impact of moonlighting conducted by three Pune professors found that 50% of the respondents to their survey were for moonlighting, 32% unsure, and only 18% against.

More than half of working Americans had considered moonlighting to fight inflation, with 38% looking for a second job and 14% planning to do so, a survey by Qualtrics International revealed.

Clearly, while enhanced surveillance and back-to-office rules may have reduced the incidence of moonlighting, a significant number of employees continue to be open to the idea. Given this, employers, particularly in the IT sector but elsewhere as well, need to work on improving employee engagement, as well as address concerns on fair remuneration for their work.

Allowing “intrapreneurship" – of letting employees work on synergestic projects and eventually “graduating" them into full-fledged entrepreneurs, is another option. Software and services provider Zoho, for instance, has produced more than 60 such founders, who are colloquially called the ‘Zoho mafia’ in the trade.

Alternatively, skilled individuals can embrace formal gig work, eliminating ethical quandaries over multiple employments. Gig workers can maintain data confidentiality, focusing on task-specific duties without accessing overarching company strategies. Even Premji might agree there's no cheating in that.