First, let us understand the term “moonlighting”.
What is moonlighting?
Simply put, it is when a person does some work in their professional capacity while being employed full time at another firm, that is called moonlighting, because metaphorically, they work by the moonlight (as opposed to working in the sun).
Most people work at one organisation. The standard work time is 8 hours. It is generally believed that with 8 hours of work, 8 hours of sleep, and 8 hours of personal time, is the ideal combination for a healthy life.
However, in many white-collar jobs, the working hours extend well beyond 8 hours, and employees also work weekends.
The second factor that encourages moonlighting is the growth of the gig economy. In a gig economy, a professional can complete a part of an overall project and get paid for it without being a full-time employee with the company.
For example, The Children’s Post would like to get a video tutorial made on “How to present in an Open Mic.” But we don’t need a video editor as a full-time employee. So, we can hire a gig worker to make this video one time. The person who does this work might be an employee at a design firm and be doing this at night to make extra money. Its a win-win for both of us – we get our work done and pay for it, and the professional gets money for their skill.
This is a classic example of moonlighting.
Why do people moonlight?
People do moonlighting for many reasons. Additional income is only one of the many reasons.
A. We now know that when the going gets tough, organisations can and do fire employees with no warning whatsoever.
B. When the profits are good, the executives get the fattest bonus checks, but when there are losses, employees get the pink slips, not the managers who are responsible for PnL.
Therefore, we arrive at the following axioms:
A. Loyalty as a concept does not apply to the employer – employee relationship. It is a work for pay contract.
B. An employee cannot rely on their employer for financial stability. They have to ensure it themselves.
C. For a mid-level employee, the only resource they can deploy to earn the secondary income is their own skill.
So, moonlighting is a response to conditions created by employers.
The third reason that people might do moonlighting is to learn new skills or to get creative satisfaction which may be missing in their day job.
The fourth reason is that they may be working towards creating their own organisation in their free personal time.
Why do companies not like moonlighting?
Case I: Direct Competition
Let us assume that you work for ITC. You are responsible for their Sunfeast biscuits formulation. You ensure that Sunfeast biscuits remain crisp even in humid weather conditions that are found in some parts of India.
Britannia would like to do the same thing for their biscuits. So, they contact you to work for them 2-3 hours a day and train their bakers on the composition of biscuits.
You do this, while being fully employed by ITC.
What does this do?
A. It leaks the secret business practice of ITC to its direct competition.
B. It leads to you working for more hours than a human can possibly work. Instead of 8-8-8, you are now working (8+4)-4-8. This leaves you fatigued when you come to your day job at ITC and while you are still getting paid for 8 hours, you are not able to work at the same level.
Case II: No direct competition (Client Relationship/Unrelated company)
Let us take another example.
In this case, a graphic designer working with a graphic design consulting firm also works with a client firm like, let’s say, The Children’s Post. The graphic design firm would charge us 25-30,000 INR per video. But a gig worker from the same company does it for us in 10,000 rs.
What happens in this case?
A. The company loses business and over a period of time, it would have to cut its margins to offer rates that are competitive with gig workers.
B. The client gets only one person working on their project instead of an entire team that does storyboarding – illustrations – execution.
Case III: My own thing
According to Harpreet Singh Saluja, President of Nascent Information Technology Employees Senate (NITES), an organisation representing IT workers, “Infosys founder Narayan Murthy was working with Patni Computer Systems when he founded Infosys. At the same time, if you’ll go with startups, Flipkart was founded by Sachin and Binny Bansal while they were working for Amazon. Freshdesk, which got listed on Nasdaq last year, was found by Girish Mathrubootham while he was working for Zoho Corporation.”
The founder of Zoom is an ex-Webex employee who used the information he had about the pain points of Webex customers because of his employment with Webex. He then created a solution that did not have these issues.
In this case, the employee works on creating their own solution or company while being employed by another company.
What happens in this case?
A. The employee uses their personal time to create this solution and an alternative stream of income.
B. They might use some of the confidential business information that they have because of their employment.
C. Sometimes, like in the case of Flipkart and Infosys, they might create a directly competing firm.
What did Wipro do?
While companies like Infosys, TCS, etc. have been talking about how moonlighting is unethical, Wipro was the first major IT company to admit that it had, in fact, fired 300 people for moonlighting with a company that was a direct competition.
Can companies legally do this?
Actually, yes. Most employment contracts mention specifically that the person taking up full time employment will not be employed anywhere else during the term of their employment.
Most also mention that the business knowledge/secrets got during their employment cannot be used at any company that they join after quitting this organisation.
For some senior people, there is a non-compete clause which mentions that they cannot work with a direct competitor for a certain period after quitting the organisation. This time period can be anything from 6 months to 2 years.
What is the future of moonlighting?
The jury is still out on this one. Some companies think that it is unethical and have sent memos like “No two-timing, no moonlighting” to their employees.
Some other companies think that moonlighting is the future of work.
There is no industry consensus (agreement) at the moment.