Mini Episode 11 - Why do people stay in jobs they hate?

Amanda from Paddington wants to know why it’s so hard for ‘her friend’ to quit her joyless job.

Dan: 00:17 Welcome to Bad Decisions, mini episode 11. I'm your host, Dan Monheit from Hard Hat, and if you've made it this far, you know why we're here. So let's just go to the question for this week.

Amanda: 00:26 Hi, Dan. It's Amanda from Paddington here. I have a friend who complains about her job every day and it got me thinking, why do people stay in the jobs they hate?

Dan: 00:35 Oh, Amanda from Paddington. Definitely just asking for a friend. Though you do sound very happy on the call. So maybe it's not you at all. To be honest, the last 18 months have definitely caused a lot of people to have a good, hard look inside themselves and wonder what on earth am I doing? And to be honest, I'm old enough to remember all the way back to the Y2K bug, right 99 to 2000 where that was I think the last major time that so many people actually paused to consider what on earth we are meant to be doing without fleeting existence on this spinning rock in the middle of space, right? And asking ourselves all sorts of hard questions, like why we are still working for old stink breath in the corner office. So of course there's a very pragmatic reasons why good people stay in bad jobs or people stay in jobs that they hate.

Dan: 01:18 So we have life pressures. We have kids and mortgages and school fees and all of that sort of stuff, which is kind of boring, but very, very real. But I dare say for many of us, there is a sobering reality that really, if we really, really wanted to, we would have the complete freedom to change our careers or at least change our jobs this very second if we chose to. So why don't we? Why don't more people quit bad jobs or quit bad relationships, or at the very least quit bad shows on Netflix? What we're dealing with here is the behavioral bias known as the sunk cost fallacy. Now sunk cost refers to any money, effort, time, basically anything that we have already paid or invested that we can't get back that makes us behave in a counterproductive or counterintuitive way. So you might have heard the old saying of throwing good money after bad.

Dan: 02:03 That is the epitome of the sunk cost fallacy, right? And put really simply sunk cost fallacy is our innate desire to want to follow through on what we've already invested in in the past, even if objectively, it makes no sense for us to do so. Now what's really annoying about the sunk cost fallacy is the more we invest in something, the greater the sunk cost becomes, making it harder and harder to just walk away. Crazier still is the way that sunk cost fallacy causes us to plow ahead so as not to have wasted our past and in doing so, bizarrely actually causes us to waste our future, which is the only thing that we still have control over.

Dan: 02:39 A study by Arkansas BloomBoard back in 1985 proposes scenario for students who are going on a ski trip. In this scenario, the subjects had purchased a hundred dollar ski pass for a weekend trip to Michigan. Not bad. As well as a $50 ski pass for a trip to Wisconsin, which objectively speaking, they would have found much more enjoyable than Michigan. Unfortunately, and we've all been here, without realizing it, they actually booked the trips on the exact same date, meaning they could only go to one. Now rationally, this is an absolute no brainer. Of course, you choose Wisconsin. You know it is going to be more enjoyable, right?

Dan: 03:12 And especially when you consider the fact that both tickets have already been paid for non-refundable in the past, sunk. However, only 46% of people chose Wisconsin with the majority actually choosing the more expensive trip to Michigan. So essentially 54% of subjects made a decision based on how much they'd already spent in the past, not based on how much fun they would be having in the future. So bringing it back to people staying in jobs that they hate, while we may dream of flipping our careers of opening a cafe of going back to university or finally leaving a job that pays really well, but ultimately makes us very, very sad, we tend to stay because of the three-year degree we did back in 2007 and all of the time, the energy, the effort, the emotion that we have invested to get to this point in our career.

Dan: 03:58 The sunk cost fallacy has this uncanny ability to bind us to our current situation even when it is clearly not working out the way we hoped it would. For brands, the sunk cost fallacy can be a major driver of conversion. If we can get customers to make small investments early on in the process, the cost of walking away can quickly become a major motivator for them to stay on board. So offering things like free trials or helping customers import all of their data from a previous system into a new one can be perfect ways to start. So I hope that answers your question of why people stay in jobs they hate, Amanda, and I hope you, I mean, your friend can really ask themselves the big questions and end up happy, because you sound like a really lovely person.

Dan: 04:40. I'd love of you to end up doing something that you enjoy. So that is all for this week. If you have questions that you would like answered, you can hit me up all over the internet at Dan Monheit, or email me at askdan@hardhat.com.au. We'll be back in a couple of weeks with more answers to your weird and wonderful questions about why we do the things that we do. Until then, take care, and I'll catch you next time.