A third of Kenyans raking in more money from their side hustles than their day jobs are ready to quit their daytime gigs this year while the remaining 67% would prefer to remain employed but continue to expand their side hustles, a new study has revealed.
The study dubbed State of Side Hustles in Kenya authored by Nairobi based management consultancy firm Viffaconsult also shows that over 80% of respondents stated that desire to supplement their salaries is the driving force behind engaging in side-hustles due to the inability of their current salary to meet basic needs.
A huge chunk of other respondents also identified drawing up a retirement plan, boredom at work, investment and desire to realise unmet needs by the current employer as the other reasons why they are engaged in alternative revenue-generating activities.
“Respondents who pointed at retirement and investment as the biggest motivators behind setting up side hustles said that investment in business had the potential to provide an above-market RoI(Return on Investment) while the business provides a cash reserve in case of an emergency,” reads the report.
The research shows that drop or loss of income continues to have the effect of driving employees to set up side businesses to supplement their diminishing income.
This is espoused by the state of the Kenyan private sector. In 2019 the sector operated in a tough business environment with at least 15 listed companies issuing profits which was followed by layoffs of over 1700 employees further compounding on challenges faced by households that are struggling to make ends meet.
Top Side Hustle industries
Conversely, the report shows that Agriculture is the biggest side hustle industry in Kenya providing extra income for most employees.
Media and entertainment, retail, transport, IT, manufacturing, construction and real estate, financial services, business services & hospitality are the other top side hustle industries in the country respectively.
A large percentage of respondents indicated that they employ 1-5 employees in their side hustles.
Effect of Side Hustles
As much as side hustles benefit an individual, there is the question of whether they can impact negatively on the daytime job. The study shows that 56% of the respondents had indicated recording no improvement at their daytime job while the satisfaction of extra revenue had a positive impact of 44% of the respondents on their daytime job.
In income terms, 67% of respondents said that their side hustles had supplemented their income significantly while 33% said the side hustles have not improved their fortunes.
Side Hustle Challenges
By the same token, access to capital business management, hiring employees, taxes, product-market fit, cashflow management and market management were cited as the main challenges side hustles face.
The consultancy firm recommends that corporate employers should establish a framework to encourage employees to engage in side business outside official work hours and on special occasions within working hours as long as it complements and improves the employees’ day job as it will act as employee training and development.
“If such a scheme is well-managed employers will reap the benefit of increased skill and productivity at no
or significantly less cost compared to formal training as well as low attrition due to job satisfaction,” reads the report.
Viffaconsult’s survey also showed that 78% of entrepreneurs in Kenya are men while 22% are women.