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When employees work freelance or have second jobs, issues can arise. Eleanor Deem explains how to avoid the pitfalls and reap the rewards.

Photo of girl on phone at laptop

Many employers in the arts sector find themselves managing employees who pursue freelance or other working opportunities outside their main employment. While it is perhaps natural to feel concerned about this, particularly if you are not entirely sure what your employees are doing or how it may impact on their employment with you, there are some potential advantages in employees doing this, as long as it is handled correctly.

Consider the benefits

Depending on the nature of the external commitment, and on the role they perform in their employment with you, outside business interests can enhance a person’s performance or contribution at work. They may develop additional skills, expertise or knowledge. They might enhance their own profile, and possibly that of your organisation too, or may develop useful contacts that could prove valuable to your organisation.

It is not unknown for employees to use physical resources, such as laptops and mobile phones belonging to their main employer, for outside activities

So although the temptation may be to feel concerned about outside activities and attempt to restrict them, it’s worth keeping an open mind, and considering the benefits to your organisation.

Reasonable restrictions

As well as bearing in mind that outside work may actually benefit employees’ roles with your organisation, it’s important to remember that employers must be reasonable in any restrictions they attempt to impose in this area. If an outside commitment poses, or could pose, a genuine risk to your organisation, it is reasonable to put restrictions or guidelines on this type of activity. However, trying to restrict activities where there is really no potential negative impact may prove challenging to enforce.

Risks to consider

There are a number of risks you may need to consider. Outside business interests can represent a conflict of interest if the employee (for example) works for a competitor, a supplier (or potential supplier), a client (or again a potential client) or for an organisation or person who may be a possible source of funding, a possible recipient of funding or have influence on funding decisions.

Where there is, or could be, a conflict of interest, you could either restrict those activities completely or, depending on the circumstances, make appropriate adjustments to responsibilities or decision-making. A simple declaration of an interest and withdrawal from affected decisions or discussion can sometimes be perfectly adequate.

Outside business activities or a second job can also represent more logistical challenges for a main employer, and can also become a capability issue. For example, a second job or self-employed or freelance work can leave an employee too tired to carry out their responsibilities to an appropriate level, impacting their performance and perhaps the performance of your organisation as a whole. They might also become reluctant or unable to carry out overtime or work at weekends, and the reduction in their flexibility or availability may have a negative impact on team members.

Another possible difficulty involves intellectual property. This could be written work product, contacts databases, software, designs or other proprietary systems, processes, documents or resources. There could be a temptation for employees to use these in their external activities and clearly this is a risk any employer needs to protect against. Similarly, it is not unknown for employees to use physical resources, such as laptops and mobile phones belonging to their main employer, for outside activities. Again, this is a risk it is sensible to address.

Clear contracts & policies

While employees taking on outside business activities can actively benefit you as an employer, it’s therefore crucial to protect your organisation by putting in place clear, appropriate and reasonable guidelines and (where necessary) restrictions.

Through appropriate policies or clauses in contracts, employees should be absolutely clear what restrictions there are on outside activities, what constitutes a conflict of interest, and what they should do if considering taking on an outside activity. This might include simply registering it or declaring it, or might include a requirement to seek permission before taking on a commitment (such permission not to be unreasonably withheld).

Intellectual property definitions and restrictions and confidentiality requirements should be set out in contracts, and appropriate use of organisation property outlined in a suitable policy so that there is no room for confusion or misunderstandings.

Any requirements for overtime or flexibility in hours should also be included in contracts, and where performance seems to be slipping, the possibility of physical reasons, including overtiredness, and whether the reasons for that include outside work should be explored.

Employees should not only be clear about any restrictions or requirements in this area, but they should also be aware of the possible consequences. The idea of clarity in expectations in this area is to drive the right behaviour. If everyone is fully aware of their responsibilities and the potential implications, they are more likely to adhere to them. Many issues with outside business interests develop because the employee hadn’t realised it would be a problem, didn’t understand why there might be a concern, or didn’t realise what they needed to do.

As long as any restrictions you put in place are clear, reasonable and appropriate to the roles and responsibilities in question, you should find employees don’t take on outside commitments which are detrimental to their work with you, and may even find your organisation benefits from those activities if employees’ skills, knowledge and value are enhanced.

Eleanor Deem is Director of Face2Face HR.

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