Someone digital moonlighting
Small Business Advice

What is digital moonlighting?

17 Jul 2016

The term ‘moonlighting’ once carried rather negative connotations, suggesting a full-time employee was taking on extra work under the ‘cover of night’ either because their sideline was in direct competition with their employer’s business, or because they were underemployed, financially struggling and needed to supplement their income with evening or weekend work in order to make ends meet.

However, the growth of digital technologies has turned that dynamic on its head.

Simply the best

Digital freelancers are now offering their (often quite advanced and valuable) skills to clients on a part-time, freelance basis not because they are underemployed, not because they are strapped for cash, but because their skills are very much in demand.

According to research from Elance 21% of UK graduates with first class honours say they have already chosen to work as a freelancer, while 29% of all graduates indicated they will freelance on a part time basis during the next five years.

Beyond university, data from the Labour Force Survey (LFS) suggests there are now an estimated 1.56 million freelance workers in the UK, with 207,000 of those professionals maintaining a normal salaried job and moonlighting on the side.

Digital technologies have made it increasingly easy for these professionals to pitch their talents to clients anywhere in the world, with a range of online services and freelance platforms popping up to help connect freelancers with prospective clients, in addition to handling billing, client communications etc.

More than money

It goes without saying that moonlighting helps to supplement a regular income. Beyond money, though, digital moonlighting also offers highly skilled freelancers the opportunity to experiment, the freedom to take risks and the flexibility to explore other professional interests without jeopardising their regular income.

In addition, digital freelancing is not usually location dependent, meaning freelancers can work for clients in other cities, and even on other continents, no matter where they themselves are based. In that way they are much less likely to step on any toes by inadvertently competing with their regular employer’s business.

Devaluing freelancing?

However, while digital technologies have helped to remove the stigma of moonlighting, and helped mitigate the risk of angering employers by competing for local clients, some newer freelance platforms risk devaluing freelancing by pushing business professionals into a ‘race to the bottom’.

Fierce competition and unrealistic client expectations on platforms like BloggersRequired and UpWork are encouraging many digital freelancers to bid for jobs that pay less than minimum wage – as little as a few dollars per hour, in some cases.

In fact, one platform, Fiverr, has developed a business model that centres on freelancers charging just five dollars for any and all digital freelance work, no matter how skilled the freelancer or time-consuming the work.

With projects ranging from website development to content writing to graphic design, all priced at just five dollars, the business model employed by Fiverr has the potential to devalue the work of creative freelancers by reducing their creative output to little more than digital factory production lines.

Go your own way

If you’re attracted to the flexibility digital moonlighting offers, not to mention the supplemental income it can bring, a better bet might be to bypass freelance platforms like Fiverr and BloggersRequired, and instead source your own freelance clients. You can find new opportunities through your existing network of family, friends, acquaintances and classmates, or by pitching prospective clients by phone or by email.

You can also use social networking websites and attend virtual networking events, where you may just encounter a small business owner or corporate business executive in a far-off city that’s willing to pay you to moonlight for them (at a rate that’s significantly better than five dollars!).

Don’t forget the taxman

Your digital moonlighting will hopefully result in a valuable source of supplemental income, but it’s important to remember that it’s not tax-free income.

HM Revenue and Customs has begun clamping down on full time employees that don’t declare the income they make from moonlighting on the side, so it’s vital that you register as a sole trader, submit an annual self-assessment tax return and pay the correct amount of income tax on money you earn from your freelance work.