Why we stay in jobs that are bad for us: The Sunk Cost Fallacy
Plus my advice on how to avoid it when making crucial career decisions after burnout!
As I continue to navigate my post burnout career path, one of the biggest obstacles that I’ve had to overcome on this journey are my own internal biases.
Without doubt, cognitive biases affected my decision making, especially early on in my recovery. None more so than the Sunk Cost Fallacy, which is a bias that is particularly prevalent and perpetuated in vocational careers with high burnout rates. You need to be aware of the Sunk Cost Fallacy, because it keeps us stuck in careers that no longer serve us, and might indeed be actively harming us, because we end up focusing on the past costs of our career decisions rather than future costs and benefits.
Have you ever thought in a moment of indecision about your career, “I can’t give up, I’ve put too much time and effort into this to give up now?”. Or, perhaps this has been said to you by a well meaning loved one or a colleague? This is the sunk cost fallacy in action. It describes our tendency to follow through on an endeavour or decision if we have already invested time, effort, or money into it, regardless of whether or not the current costs outweigh the benefits.
The more we invest, the more we feel committed to continuing that endeavour and the more resources we are likely to put in to follow through on our decision, even if it's the not the right decision anymore. The thing about cognitive biases is that these ways of thinking feel right, they appear to make sense, and you likely won’t even be aware that you’re doing it, so they’re very hard to stop.
In burnout, the Sunk Cost fallacy stops us from making the right career choices for recovery. Part of the reason why we get sucked into the sunk cost fallacy is because because of loss aversion, which describes the fact that the impact of losses feel much worse to us rather than the impact of gains. Therefore, you are more likely to avoid losses than to seek out gains. But, if you make a decision to stay in a job that actively harms you because of past investment, you will never recover.
It’s difficult to manage this successfully, but it can be done! Here is my advice:
How to manage the sunk cost fallacy?
You must shift your current thinking from focusing on past investments to focusing solely on any future costs and benefits of a decision. You have to disregard any previous costs from your current decision making, be it financial costs, time costs, whatever it is, it cannot factor into your current decision making.
Concentrate on the here and now and, and the potential future gains. This is hard- but this is how you avoid the sunk cost fallacy.
Prioritise SMART goal setting and concrete actions, as well as creating a roadmap that sets out your short term, medium term and long term goals.
Join me on Thursday as I share exactly how to engage in values-based decision making in your career- if you do this then no matter what decision you’re making, you really cannot go wrong! This newsletter is for paying subscribers only, so please do upgrade to access this content.