Human Capital Intel - 7/2/25
Economic anxiety drives record side hustle surge | AI undermines executive decision quality | Small business AI adoption lags | Skills velocity trumps depth
Welcome to the latest edition of Human Capital Intelligence, your weekly brief synthesizing over 250 leadership, HR, and people sources to filter out the noise. As always, we would love to hear from you at ken@reyvism.com with questions you’d like answered or topics covered.
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By Ken Stibler; Powered by Reyvism Analytics
Deep Dive: Economic anxiety creates a side hustle crisis
Economic uncertainty is driving a fundamental shift in worker behavior that threatens productivity and retention across organizations. Sixty-four percent of workers now plan to get a second job or start a side hustle, driven by necessity and a feeling of recession, rather than passion.
Majority of workers say they’ll reach retirement without enough savings. (HR Dive)
The trend coincides with young Americans cutting back on discretionary spending and all age groups raising savings levels. When primary job security feels uncertain, employees naturally hedge their bets through alternative income streams.
This creates a productivity paradox: workers need their primary jobs for stability but are increasingly investing time and mental energy in backup plans. The result is decreased engagement, divided attention, and potential conflicts of interest that many managers are unprepared to address.
Leaders need immediate to address the side hustle surge head on. A couple of key steps to deal with the rise:
Develop a comprehensive side work policy that explicitly defines acceptable versus prohibited activities—including competitor restrictions, time commitments, and disclosure requirements.
Create visibility mechanisms through regular check-ins and anonymous surveys to understand the scope, nature, and drivers (financial, engagement, or otherwise) of side work across the organization.
Train line managers on how to handle side hustle conversations, including when to escalate, how to assess conflicts of interest, and strategies for maintaining performance standards.
Conduct transparent conversations about job security and career progression to reduce the anxiety driving alternative income seeking.
Finally, have HR evaluate compensation structures versus state “living income” targets that are inflation adjusted to assess whether comp provides as much financial security as leaders would often think.
Establishing clear and steadily enforced consequences for policy violations
Organizations that proactively manage rather than ignore the side hustle reality will retain focused, engaged employees while competitors struggle with divided attention and hidden conflicts as employees continue to be squeezed by unavoidability and job market instability.
The infinite workday trap
A troubling pattern is emerging in executive decision-making as leaders increasingly rely on AI tools that may be degrading the cognitive diversity essential for sound business judgment. ChatGPT harms 'diversity of thought' during brainstorms, according to new Wharton research, while Generation Z employees say they increasingly rely on AI for emotional intelligence, outsourcing critical human judgment to algorithms.
The timing is particularly concerning given that decision-making quality has become what's most important to CEOs in 2025, according to PwC research. Yet the tools meant to enhance decision-making may be creating homogenized thinking that reduces the cognitive diversity necessary for complex business challenges. Even traditional credentials are losing relevance with one billionaire bank CEO calling his Wharton MBA 'a waste of time' as skills degrade rapidly in an AI-accelerated environment.
The solution requires intentional cognitive discipline: use AI for data processing and initial analysis, but preserve human judgment for final decisions. MIT neuroscience research confirms that AI can't replace executive thinking…yet, but only if leaders maintain their cognitive independence rather than defaulting to algorithmic recommendations.
Quote of the Week: Transparent AI communication reduces workplace fear
"Leadership should share examples of practical ways to use AI and shine a light on areas where AI should not be used. This transparency takes away the fear and shame that some employees associate with using AI on the job."
Sam DeMase, ZipRecruiter career expert, on communicating with employees about appropriate AI use in the workplace
Reading List:
Small business lag on AI adoption
Only 24% of small businesses with fewer than 10 employees are using AI, while nearly half of firms with 50 or more employees leverage the technology. The gap becomes critical when considering that Salesforce CEO Marc Benioff reports AI now handles 30% to 50% of work at his company. Small businesses risk falling behind on both productivity and talent attraction as workers increasingly expect AI-enhanced workflows.
Skills velocity trumps depth in AI era
Top companies now prioritize skill velocity over depth as AI technology evolves rapidly. The shift reflects a fundamental change: when AI can handle specialized functions, human value lies in adapting quickly to new tools and bridging between AI capabilities and business needs. Organizations must hire for learning agility rather than specific expertise.
Hiring processes continue lengthening despite urgency
Nearly all hiring managers now report that hiring takes longer than two years ago, creating frustration for all sides of an increasingly broken labor market. The lengthening timeline comes as organizations struggle to identify candidates with rapidly evolving skill requirements, particularly around AI competency.
Data Point: Downturn prep or structural layoffs?
80%
The increase in job cuts announced in 2025 compared to last year according to outplacement firm Challenger, Gray & Christmas.
In Other News:
Empathetic leadership has ROI for employee retention, report indicates. (HR Dive)
Intuition: If You’re Known for This Rare Thinking Habit, Your Leadership Skills Are Off the Charts. (Inc)
Layoff survivors say a lack of retraining has led to pricey mistakes. (HR Dive)
Worker pessimism, uncertainty and disconnect reach ‘critical levels,’ survey finds. (HR Dive)
HSBC’s $200mn Return-to-Office Push Risks Denting CEO’s Savings Plan. (Bloomberg)
A guide to deepfakes in the workplace, for employees and employers. (ADN)