Ever feel like your career decisions are being influenced by forces you can’t quite control? Like there’s some invisible hand gently nudging you into a direction that might not entirely be your own? Well, surprise, that “invisible hand” is probably behavioral economics, playing tricks on your mind without you even noticing.
It’s like being in a crowded room where everyone’s talking at once, but someone’s voice—loud and insistent—keeps getting your attention. It’s not necessarily the most rational choice, but it sure feels good in the moment, right? Women, especially, face unique pressures in the workplace that impact how we make career decisions, from the pressure to ‘do it all’ to the ever-present need to prove ourselves. So, let’s break it down: how can we use behavioral economics to make smarter, more empowering career decisions?
1. The Anchoring Effect: Don’t Let Your First Offer Be Your Last
Imagine this: You walk into a negotiation for a new job. They throw a salary number at you—let’s say $60,000. Your gut reaction is, “Wow, that’s a lot!” but hold up. That number? It’s just an anchor, and if you’re not careful, it can drag you into accepting something less than what you’re worth.
Women are often conditioned to be more polite, to not negotiate as aggressively, or to settle because the first offer feels like a ‘win’. It’s that pesky anchoring bias at work, pulling you into a fixed mindset around numbers. If you’ve got a second or third offer that’s much higher, or benefits that make a difference (hello, flexible hours!), don’t let that first offer be your ceiling. Think about it like a buffet—you wouldn’t pick the first dish you see just because it’s right in front of you. Shop around, see what’s out there.
“You can always push for more. Settling too quickly could mean leaving money—or happiness—on the table.”
2. Loss Aversion: Why You’re Scared to Leave a Bad Job
Loss aversion is like that moment when you drop a piece of pizza on the floor and you’re mad about it—not because the pizza’s gone, but because you “lost” something you already had. The same thing happens when women think about leaving a job. We tend to focus on the things we’ll lose—security, benefits, familiarity—rather than the potential gains. That fear of loss can keep you in a toxic work environment, settling for less than you deserve, because the pain of leaving feels worse than the fear of missing out on something better.
But here’s the thing: Sometimes, leaving that dead-end job is the best way to grow. Think of it like shedding old skin—it’s uncomfortable, yes, but necessary for something new to emerge. Women are especially vulnerable to this trap because societal pressures can make us feel like we need to hold on, to maintain the status quo. But in reality? Change can be the best thing that ever happens to your career.
3. The Endowment Effect: You Might Be Overvaluing Your Current Role
The endowment effect happens when you overvalue something simply because you own it. So, if you’ve been in a position for a while and you feel attached to it, you might not be seeing it for what it really is. Women, particularly in male-dominated fields, can experience this attachment to roles that no longer serve them. You might be stuck in a job because it feels like part of your identity, or maybe you’ve invested too much time to let go. But just because you’ve been in a position doesn’t mean it’s still the best choice for you.
Take a step back. Is your current role still feeding your professional goals? Or are you holding onto it out of comfort and attachment? Just like any relationship, if it’s not fulfilling you, it might be time to let it go. Remember: You’re not defined by one job. You’re a woman with endless potential, and that title alone is worth a whole lot more than your current paycheck.
4. Social Proof: How Your Friends Might Be Leading You Astray
Ever notice how much your friends’ career decisions influence yours? Maybe a friend’s got a snazzy new job, and suddenly, you’re questioning your own. You feel the pressure to ‘keep up’ or ‘compete,’ thinking that because everyone else is climbing the corporate ladder, you should too. This is social proof at work—when you rely on other people’s choices to guide your own decisions.
But remember: just because it looks good on your friend doesn’t mean it’ll look good on you. Your career path is as unique as your fingerprint. Instead of following the crowd, focus on what’s best for you, not what everyone else is doing. If your friend is jumping on the startup bandwagon and you’re more about stability, that’s okay! Trust your own instincts and values, not the latest trend.
5. The Availability Heuristic: Making Decisions Based on What’s in Your Face
The availability heuristic is when you make a decision based on information that’s most readily available to you—usually, the things you hear about most. If your feed is flooded with headlines about women CEOs, you might feel like that’s the only “successful” career path. But the truth is, there are tons of career paths out there that may not be in the spotlight but could be just as fulfilling.
Women often face societal pressure to succeed in certain ways. We’re told we should be the boss, the leader, the entrepreneur. But that might not be the story that fits you. Maybe you’re content in a supportive role, or maybe you’re more passionate about creating change from behind the scenes. There’s no one-size-fits-all career narrative, so don’t make the mistake of thinking there is. Your success doesn’t have to look like anyone else’s.
6. The Halo Effect: Don’t Let One Good Trait Define Your Career Path
The halo effect is when one positive quality about someone or something leads you to overestimate their other attributes. Ever heard someone say, “She’s a great communicator, she’ll be perfect for management”? But what if communication isn’t the only thing that makes someone successful in that role?
Women often get labeled as “good communicators,” “nurturing,” or “team players,” and while those qualities are amazing, they don’t always translate to leadership skills. Don’t let one label box you in. Just because someone sees you as “good with people” doesn’t mean you have to take the “people” job. Get comfortable breaking free from these labels.
Conclusion: Taking Control of Your Career Narrative
Using behavioral economics to guide your career decisions is like having an extra tool in your professional toolbox. It helps you recognize the mental shortcuts and biases that influence your choices. It’s not about outsmarting yourself but about making smarter, more conscious decisions.
So, next time you’re faced with a career choice, think about these psychological biases. Don’t let them dictate your path. Instead, use them to your advantage. Recognize the forces at play and challenge them when necessary. And remember, the only person you need to compare yourself to is the version of you that existed yesterday.
“You can always push for more. Settling too quickly could mean leaving money—or happiness—on the table.”