Did you know you might be subconsciously sabotaging your own career? Human psychology sometimes causes us to act in ways that can be counterproductive. When it comes to our careers, it can cost you a promotion, the raise you’ve been working for, or that dream job you’ve been chasing.
Luckily, psychologists have discovered some of the psychological traps that we all too often fall into. Avoiding these three traps can save you hundreds of thousands of dollars over the course of your career.
When discussing salaries, people tend to "anchor" around the first number that gets raised, even if it doesn’t make sense. If an employer says they are looking to pay a candidate around $50,000 for a position, both the employer and the employee use that $50,000 as a baseline for the position—even if the market rate is actually, say, $70,000. Suddenly, $50,000 has become the anchor, the starting point for negotiations. In this case, a $50,000 anchor probably means that employee may end up underpaid, because they are beginning negotiations from an artificially low base.
How can you use this to your advantage? While "don’t name your price" is a commonly cited negotiating tactic, you actually may want to strike first with a high anchor number. Even ridiculous figures, mentioned as a joke, may increase your salary.
So if an employer asks your desired salary, it’s actually an effective strategy to start out with, "well, I’d love to make a million dollars a year, but I’m willing to accept the high end of the market rate." It sounds crazy, but even an anchor of one million dollars, said entirely as a joke, could raise the offer that an employer gives you.
Sunk cost fallacy
Let’s say you are waiting to check out at a grocery store. You’ve already waited for 10 minutes and still have two people in front of you. You’re tired of looking at your phone, and you just want to pay for your Sriracha and leave. Suddenly, a new line opens up. You rush over, and get checked out quickly. Makes sense right? Clearly, the best strategy is to move to the new, faster line, even if you’ve already spent a long time waiting in the slow line.
Now imagine instead of waiting in a grocery line, we’re talking about your career. You’ve been waiting for years for that promotion. You know your skills aren’t being recognized by your boss, but you want to get a raise before you make any decisions about career moves. You’re moving forward—but only barely. Suddenly, a great new opportunity at a different firm opens up. What do you do? Do you rush over? Or do you stay at your old job, convinced you’ve already dedicated too much time on it to give up now? If you decided to switch, then good for you. But all too many people will stay still and rationalize it, thinking they’ve already spent years waiting to advance, and that unless they wait even longer, they’ve wasted those years. This is known as the sunk cost fallacy.
The truth is, the past is already gone. Whether it’s waiting in line at a store or five years in a job you hated, like it or not, you can’t go back. That’s why it’s so important to think calmly and clearly about what is best for your career now. Don’t consider how much time you’ve already spent in your current career path—instead, think about the best way to achieve your goals for the future. It may be staying on the same track, or it may mean making a big shift. Ultimately, that is a question only you can answer, but be sure you don’t wait in the slow line just because you’ve already spent so much time there.
Just as the sunk cost fallacy makes us afraid of changing careers once we’ve already invested our time in something—even if we no longer like it—loss aversion makes us overly afraid of loss, which harms our career prospects.
Loss aversion refers to humans’ lopsided emotional response to the fear of losing something. Humans like gaining things—but we absolutely hate loss. In fact, studies show we hate losing things so much that losing something may be twice as twice as painful as gaining something of equivalent value.
The pain of losing a $50,000 job is probably more intense than the happiness of gaining a $80,000 job. This has tremendous consequences for your career. It can keep you stuck in a job that pays below your potential, all because you’re afraid of losing it. It encourages you to choose a safe route which pays below your earning potential. It can even cause you to unwittingly take unwise risks. When combined with the effects of the sunk cost fallacy, it can cost you hundreds of thousands over the course of your career.
If humans are wired to think this way, how can you fight it? When you’re considering a new opportunity or career move, write down the pros and cons to help you determine whether your fear of leaving your current position is rational, or whether you are simply worrying more about evaluate the situation, you’ll be able to mitigate the unconscious emotional biases that can set you on the wrong track.
Even if you’ve achieved success in your career, do you ever secretly feel inadequate? Do you worry that one day, others will figure out that you know less than others think? There’s a name for this, and it’s called imposter syndrome. It’s especially prevalent in high achievers who often feel immense pressure to look competent and successful. That pressure also leads to fear that others will "expose" them as frauds.
The good news is that most of this fear is unwarranted. Even the most successful and knowledgeable people can’t know everything. To a large degree, everyone is learning as they go along in life. Not being 100% certain of yourself at all times is not a liability, it’s a fact of life.
Change your thinking to improve your career
Small actions can have big consequences. An extra $3,000 earned in salary negotiations results in tens of thousands of extra pay over the long run. Extra confidence gained from rejecting the imposter syndrome can help you close better deals and excel in the office—allowing you to move to that dream job you’ve always wanted. While you can’t control everything in the world, you can control and shape how your own psychology. If you think and act more positively and assertively, your career will reap the benefits.