Are you in a role that’s ok, but not great? Have you been working this role for several years now, waiting until the market improves before you commit to something superior? Have you looked for alternatives all the same, but failed to find anything good enough? As time goes on, are you feeling a little stuck?
Yes, this market is bad, but there is more to it than an absence of opportunities.
Your brain is getting in the way of things.
The big problem is the endowment effect, or our tendency to place a higher value on the things we own already (in this case your current job) than the things you don’t.
There’s clearly an element of rationality here. The endowment effect is associated with risk aversion. You are familiar with the risks associated with your current job. If you’re to move into a new job, you’ll require compensation for the additional uncertainty.
However, the endowment effect can also influence the way you go about looking for a new role – in ways that may be detrimental to the outcome.
In 2007, psychologist E. J. Johnson of Columbia University Business School posited his, ‘search order thesis.’
In this, Johnson said that during a transaction, sellers focus unduly on all the reasons to keep the item in question, paying undue attention to how wonderful it is.
In the case of your job, therefore, the mere thought that you might look for a new position will lead you to focus heavily on how great everything is where you currently work.
Conversely, when you’re buying something else (looking for a new role), you’ll start by focusing on all the negative aspects of the new position. These bad things will assume disproportionate significance in your mind.
As a result, you will again value your current role more highly than any potential alternatives – and to demand additional compensation if you’re going to move.
This year, the implications of the endowment effect were broadened. The endowment effect isn't only about how we value what we have already. It also impacts the way we go about looking for information.
Thorsten Pachur and Benjamin Scheibehenne of the University of Basel constructed an experiment showing that the endowment effect influences the way we go about searching for options. In their experiment, people were asked to name the prices at which they would buy or sell tickets for lotteries. The odds of winning weren’t disclosed, but participants were asked to run trials to infer the value of the tickets. They could stop the trials and start a new lottery whenever the liked.
Pachur and Scheibehenne found that the point at which participants decided to stop the trial and to move to a new lottery depended upon whether they were buyers or sellers. Sellers stopped as soon as they encountered a high value. Buyers stopped as soon as they encountered a low value.
If you’re looking for a job, the implication here is therefore that you’ll stop as soon as you encounter something that pays well. Conversely, recruiters are more likely to stop looking at candidates as soon as they find someone who appears to be good value for money.
How can ensure your brain doesn’t come between you and your new job?
1. Conquer search order bias by very deliberately focusing on the nasty aspects of what you’re doing now. Make a list. Memorise it. Read it before bed. Ensure that your brain doesn’t lead you to focus too heavily on what’s good about your current position.
2. Conquer search termination issues by ensuring you look at all potential alternative positions – not just those that pay well. Ensure you have a spread of options. Include some that pay poorly, but suggest potential. Suppress your urge to stop looking once you’ve identified a few highly remunerated options.
In the current circumstances neither strategy may lead you to a wonderful new job, but they may at least prevent your brain from relegating you to your current position ad infinitum.