moonlighting: To moonlight a blight or alright? Startups split on their opinions

The debate around moonlighting – which recently prompted strong reactions from some of India’s top IT chiefs – has spilled over to the startup sector, which is clearly divided on the issue.

When it comes to employees taking up a side job, the general sentiment is to tread with caution, ET has found based on conversations with multiple startup bosses across upGrad, Eruditus, Nykaa, NoBroker, Scaler, BankBazaar, HomeLane, and CashKaro.

While some said their organizations were fine with what employees did in their free time as long as there was transparency and no conflict of interest, a few said they would consider it on a case-to-case basis. Others spoke up against moonlighting, saying it would dilute the employee contribution.

None of the companies ET spoke with are yet considering a formal policy on moonlighting – a trend that escalated among white-collar employees, particularly in the IT/tech sector, amid the Covid-19 pandemic and work from home (WFH).

“Moonlighting can be a great way to improve skills one doesn’t get the time to practice during their full-time job,” said Swati Bhargava, cofounder of CashKaro and EarnKaro.

She said her firms don’t have a problem with employees moonlighting as long as it doesn’t compromise on their commitment to work. “But it needs to be monitored on a case-by-case basis,” Bhargava said. “Also, for senior people, I don’t think it’s practical due to the nature of their role and responsibility.”

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At the other end of the spectrum, Amit Agarwal, CEO of NoBroker, said he is personally against the concept. “Startups are about innovating, brainstorming and solving customer problems all round the clock,” he said. “That plus the time required for rejuvenation leaves very little mental bandwidth for one more job.”

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Overall, though, experts said startups seem to be ahead of the curve and more flexible than their IT peers when it comes to moonlighting.

“Startups tend to imagine the future better than large companies and can spot trends and patterns much better. That’s precisely why they can successfully disrupt and outmaneuver larger companies,” said angel investor TN Hari, cofounder of Artha School of Entrepreneurship.

“They understand that allowing employees to do what they wish to in their free time (except working for a direct competitor) is the future and they are better off embracing the trend rather than fighting it,” he said.

Sandeep Murthy, partner at VC fund Lightbox Ventures, said creative and skilled people join startups to chase a vision, make a difference, and redefine an industry. “If you can’t make it motivating enough or incentivise them enough to stay engaged, you can’t expect them to sit around and wait idly in their free time,” he added.

Sriram Vaidhyanathan, chief HR officer of BankBazaar, said, “We have had cases where employees wanted to take up side gigs, pursue a passion project, etc. We take these on a case-by-case basis and follow the 3C principle – see what kind of contract the employee has, whether it’s a conflict of interest, and whether he/she has communicated the nature of the job. We also check the commercial interest involved.”

Moonlighting may be more of a challenge for bigger companies because they usually have contracts signed with end customers, he said. “But in the startup ecosystem for smaller to mid-sized companies, it is something that can work by and large,” Vaidhyanathan added.

Abhimanyu Saxena, cofounder of InterviewBit and Scaler, said employees should have the freedom to do what they want outside work hours, provided there is no conflict of interest. “Companies that are flexible will attract more talent than those who are rigid,” he said.

Moonlighting hit the headlines in recent weeks after Swiggy launched a policy that allowed its employees to moonlight, subject to internal approvals. Since then, some IT majors including Wipro, Infosys and IBM came out against the practice. However, some like Tech Mahindra CEO CP Gurnani said that his company may even make a policy so employees can be open about it.

All not comfortable

While Nykaa CEO Falguni Nayar said she is more of a traditionalist and does not believe in side hustles without the knowledge of the company, Ashwin Damera, CEO of Eruditus, said moonlighting is unethical unless the person lets the employer know and get it approved.

upGrad, too, does not encourage moonlighting. “Education is a serious business and such practices (moonlighting) could defocus our employees from their core vision…also impacting our learners negatively,” UpGrad cofounder Mayank Kumar said.

Similarly, Srikanth Iyer, cofounder of HomeLane, said, “When employees moonlight, it does dilute their contribution, if not in the near term then definitely in the longer term.”

Agarwal of NoBroker said, “The reason why we give generous ESOPs at NoBroker is that we consider our colleagues as owners, and this requires their dedicated focus. The risk of burnout and distraction (from moonlighting) is too big when a startup is in the process of experimenting and scaling.”

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