Are you investing time and emotional labor into work that will never bring fulfillment? Sunk cost is an economics term referring to an expense incurred that will never be recovered. We have sunk costs in our personal lives as well, most noticeably in the area of career.
Financial resources are required to get new products off the ground. But not all products succeed. It doesn’t matter how much money is poured into research and development or marketing. If the product isn’t profitable, difficult decisions must be made.
This is where it gets sticky. It’s hard to ascertain when to invest more capital, modify the product, or cut all losses. Some companies have such a hard time deciding when enough is enough, they continue to funnel more and more resources in an effort to save something that will never fly. As a result, they dig a bigger hole.
In business, the loss stands out in red on a profit and loss statement. The costs in our personal lives and career; however, aren’t so easily measured. Sometimes, it’s more of a nagging feeling that things just aren’t quite right. It’s harder to get up in the morning and commute to the office. Through the workweek, we eat antacids like candy. And we yearn for more meaningful work.
Though impossible to put a price tag on the expense, we are acutely aware the yield isn’t worth the effort.
Why We Hold On
Why do smart people remain in jobs they hate? Why do they stay in a position they’ve long outgrown? And why do they hold on when they need to let go in order to move ahead? Several beliefs lie at the heart of the matter:
- We think we have no choice. But we do have a choice. We can choose to act at any time.
- We fear change. We’d rather stay in comfortable gloom than risk the unknown.
- We think it’s safer to cling to the secure, steady paycheck. But we do so at the risk of missing out on something better.
- Some believe staying around long enough will ensure the promised security of a pension. But in reality, pensions aren’t always a safe bet. Being financially dependent solely on an employer places your future in someone else’s hands.
Digging a Deeper Hole
I know a lot about sunk career costs. After leaving an unfulfilling job, I made the mistake of clinging to parts of it far too long. At the time of my departure, I was working on obtaining a certification related to the profession. I lacked only three exams of nine to complete it. The knowledge gained through the experience would be beneficial to anyone seeking to advance their career in that line of work.
My thought process for continuing pursuit of the certification was well-intentioned. I wanted to prove to myself I could earn the distinguished designation. I wanted to finish what I started. I also thought it was a good idea to have something to fall back on if my new career didn’t take off as quickly as I liked.
But there was one really important factor I ignored. I had absolutely no desire to go back into that line of work. None. Zilch. The mere thought of it made my stomach churn.
Eventually, I earned the credential and celebrated the day of the final exam. The next morning though, I realized it was a waste of time and money that I’d never recoup. As a result, I learned an expensive lesson about sunk costs.
Time to Make an Assessment
When we start feeling like something’s not quite right or that we’re missing out on more rewarding work, it serves us well to assess where we’re at and whether we’re headed in the right direction. Consider the time investment, emotional labor, intrinsic rewards and the potential upside of staying on the same track.
We might find we’re making a worthwhile investment that will eventually pay off. It’s possible we could determine things will be better with a few job modifications. Or we might find it’s time to settle our losses and let go. Until we dig in and lay it all out, we won’t know.
Do you have that nagging feeling about your current career path? If so, consider taking a little time to assess where you’re currently at and then determine if you might have some sunk costs to deal with. That knowledge will guide you to the best way to move forward.