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Making the case for letting staff pursue outside interests

Studies show that autonomy consistently tops the list of traits most valued by employees, and is a main driver for initiating and sustaining portfolio careers.

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My human resources department is receiving a growing number of requests from quite senior staff to cut down on their hours so they can devote more time to other interests outside work – and in some cases, fledgling businesses. They argue that pursuing their "portfolio" careers will help improve their skills and benefit the business, and I'm of the mind that it's important to take their requests seriously for retention purposes. But what are the legal and practical implications, and how does it work in practice?

Simon Harper, co-founder of Lawyers On Demand, a legal outsourcing business that offers portfolio careers for lawyers, says:

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First, congratulations on your foresight. While at first it might seem counterintuitive to allow employees to explore other businesses and interests, you are right in recognizing the long-term benefits to your own business.

Studies show that autonomy consistently tops the list of traits most valued by employees, and is a main driver for initiating and sustaining portfolio careers. It has also been found that workers who believe they are free to make choices in the workplace – and be accountable for their decisions – are happier and more productive. These same workers also seem willing to make a financial sacrifice in the process.

You rightly state that staff retention is a consideration, but think, too, about staff loyalty. Senior managers who are given more autonomy are much more likely to become staunch evangelists for your brand (and might also be more likely to attract other talent because of their enthusiasm for your business). In addition, when budgets are tight for salaries, the offer of flexibility can be an equally effective lure for new and existing employees.

On a practical level, it is vital that expectations on both sides are set up front – agree on the time your managers will dedicate to your business and clearly state that this must not be diluted with other projects. Agree to a trial period so that both sides can review progress, and address any problems as soon as they arise – there are bound to be bumps in the road.

Finally, try to monitor output where possible. You might well find that your managers are as productive despite their reduced hours, because of their increased motivation and energy. This will help you to establish a business case for any further requests.

Rob Eldridge, employment partner at Berwin Leighton Paisner, says:

There are a few issues that might arise as a result of these arrangements, none of which is necessarily prohibitive, but you should bear them in mind when considering requests.

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There are two ways in which legal obligations might be introduced to this situation. First, there are implied duties in every contract of employment, one of which is the duty of fidelity.

This includes employees' duties not to put themselves in positions where their interests conflict with those of their employer, duties not to act for their own benefit or those of third parties without their employer's informed consent, and a duty not to compete with their employer.

Second, as senior employees, it may well be that there are express duties in their contracts covering these and similar areas.

Obtain more information about these staff members' other business interests – if it is a completely separate area from your organization, then that won't raise a conflict of interest but if senior staff members pursue portfolio careers in similar sectors to their main jobs, that could have the potential to become competition for your business further down the line.

It would be sensible to obtain information from the individuals about the nature and extent of these other businesses before giving consent for their involvement. In any event, this would be a useful opportunity to remind them of their duties.

You do not have a duty to consider these requests reasonably or even at all. However, as you mention, there may be commercial reasons that make it sensible for you to do so.

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