Did you know that 5% of Americans have more than one job? And that doesn't account for the gig economy. According to Gallup, 36% of U.S. workers have a gig work arrangement in some capacity.
Think about your employee population. Do you know about the Uber drivers, Insta influencers, and folks with their own LLCs consulting after work? Now that the holidays are over and the credit card bills are rolling in, how many of your employees are wondering how to pay for all those amazing gifts they gave? How many employees are thinking, "What can I sell, cut back on, or do to make extra money?"
Conflicts of interest are a major risk for an organization. A conflict erodes trust. It can cause damage to the organization's brand, reputation, and even bottom line. And yet employees often hesitate to disclose those conflicts.
So, if employees haven’t told you about their side hustles, why not? Typically, it’s one of five reasons:
- Embarrassment – “I need a second job to pay my bills. If I just don’t talk about it, no one will know. If I have an extra coffee every day, my manager won’t notice how tired I am.”
- Fear – “I won’t be allowed to do it. So, I’m not going to ask if all I will hear is ‘no.’”
- Naïveté – “I think there was something about second jobs in that yearly training I have to score an 80 on. But who knows?”
- Denial – “My 200,000 Insta followers have nothing to do with what I do 8 to 5.”
- Rationalization – “I don’t use the company laptop … much. If I do a little bit here and there on company time, it doesn’t hurt anyone.”
As compliance professionals, it's up to us to create cultures of disclosure and transparency. Educating your employees about conflicts is a must, but it’s only a start.
So how can you build an effective conflicts of interest program?
1. Keep it relevant.
Are you training employees on the scenarios they’re most likely to face? Or are you using outdated or vague training that relies on employees to make the connections themselves? The gig economy has opened up a lot of new possibilities, so be specific about what you’re looking for.
For example, here at Rethink, we heard from clients about conflicts coming up around social media. So we developed this video about an Instagram influencer for the Rethink library.
2. Start a two-way conversation.
It's really about comfort, right? Are your employees comfortable asking the E&C team, their managers, or a peer, "Whatcha think … would the company be mad if they knew I do this in my free time?"
Let employees know the compliance team is available as a resource to help them, and not just as an enforcer of rules. Invite them to ask questions. And then put together a communication plan to keep the dialogue open throughout the year, whether that means rolling out quarterly video communications, sending out a survey, or just hosting a Q&A on Slack.
3. Address their hang-ups head-on.
For example, the Social Media and Social Influencers video above addresses denial with a story about a woman, Jane, who believes her status as an Instagram influencer and her work are “two totally different things.” Similarly, you can address employees’ fear, embarrassment, or other hang-ups directly to encourage them talk to you.
4. Show them it's not an automatic "no."
By 2027, 50% of the workforce will be active in the gig economy (Wonolo). You owe it to your workforce to figure out how they can work for you and do all the other things that (you say) you want them to do. Some of that will be influenced by their other job(s).
In many cases, the company just needs to verify that an outside activity isn’t a conflict of interest, or else just put some boundaries in place. Tell employees that you’re willing to work toward a solution that works for both them and the company, and then follow through on that whenever possible. Otherwise you’ll be facing the true war on conflicts: keeping talent in the face of the gig.
Having a strong conflict of interest program in place is critical for any organization. Effectively training your employees about the need for transparency is the first step to managing any conflict, followed closely by the next step, establishing accountability.
As much as the side hustle is about making rent, it’s also about self-expression and a sense of control over one’s own career. It's time to truly let people bring their whole selves to work, and not just in their style of dress or expression of gender. In the hustle economy, employees are demanding more flexibility and freedom. Are you ready?
Educating employees about conflicts of interest is only a start. If you're ready to create a culture of disclosure and start a two-way conversation with employees, we can help. Schedule a free consultation with the Rethink Compliance experts.