Avoid the sunk cost fallacy and make a career pivot (even in the current tech job downturn)

It's never too late to pivot your career, but in this market you need a robust plan. And that plan probably shouldn't rely on bootcamps, AI courses and certifications, or formal education alone.

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Nov 25, 2024

👋 Hey, it’s 📣 Coach Erika! Welcome to a ✨ free subscriber edition ✨ of The Career Whispers. Each week, I tackle reader questions about tech careers: how to get one, how to navigate them, and how to grow and thrive in your role.

This topic came to mind as I’ve been coaching a few folks who are keen to pivot their careers but who are also aware that the tech job market is challenging right now. I’ve written about the fastest path to an offer, but what about when you’re OK taking the slower path to change things up?

Today’s post is about how to frame a career pivot mentally, plus the tactics to actually make it happen (even in a difficult job market). It’s a two-part post. The first part (how to frame a career pivot) comes from a fellow Substack writer

Leo Alexandru

, a Deloitte engineering lead who writes The Level Up Ladder on Substack. The second part (with actionable tactics to make a career pivot in this market) is from me, Coach Erika.

I met Leo on X (then Twitter) a couple of years ago when I first signed up for Twitter to whisper my career tips into the universe. Leo’s post about sunk costs (with fantastic examples of late-career pivoters who did very well post-pivot) was exactly what I think many TCW readers need to see as they consider “staying in role” or “trying something new” in the next phase of their career.

I hope you enjoy this two-part post and consider signing up for Leo’s newsletter The Level Up Ladder if you enjoy his writing!

With that context, here’s Leo’s original post ↓

It’s never too late to start anew

There is a concept in economics called “sunk costs”. From a rational perspective, decision-making should be based on future costs and benefits, not on past expenditures that cannot be recovered.

Psychologists Daniel Kahneman and Amos Tsversky spent their lives studying how human decision-making often deviates from rational economic models. The “sunk cost fallacy” emerged as a prime example of this deviation.

Here’s an example of it:

Imagine you're halfway through a movie at the theater, and you're not enjoying it at all. The plot is confusing, the acting is poor, and you're bored. However, you paid $15 for the ticket and already invested an hour of your time, so you decide to stay until the end, thinking, "I've already spent money and time on this, I might as well see it through." This is the sunk cost fallacy in action. The rational decision would be to leave and spend your remaining time doing something you enjoy, as the money and time already spent cannot be recovered whether you stay or go. By staying, you're only losing more of your valuable time.

Why do humans have this fallacy?

1. Loss Aversion: Humans have a stronger preference for avoiding losses than acquiring equivalent gains. This makes the prospect of "wasting" past investments particularly aversive.

2. Commitment and Consistency: As described by psychologist Robert Cialdini, people have a strong desire to appear consistent in their behavior. Abandoning a path we've committed to can feel like a threat to our self-image.

3. Status Quo Bias: There's a general tendency to prefer the current state of affairs, even when change might be beneficial. This inertia can make career changes particularly daunting.

4. Escalation of Commitment: As described by organizational behavior researcher Barry Staw, individuals often increase their investment in a failing course of action to justify prior decisions.

What does it mean for your career?

Easy; this fallacy will prevent us from changing careers or even our jobs. Because we have already spent “X” time or effort on getting to where we are.

Educational Investments: Years spent pursuing a specific degree or certification can feel "wasted" if one considers changing fields.
Industry-Specific Experience: Accumulated expertise in a particular sector can create a sense of being "locked in" to that career path.
Professional Networks: The time and effort invested in building industry connections can seem too valuable to leave behind.
Financial Commitments: Student loans, mortgages, or other types of debt can feel like chains, not allowing us to take any risks.
Identity and Self-Perception: Our careers often become intertwined with our sense of self, making change feel like a loss of identity.

In Romania, there is another one, closely tied with the one above, and that is “Other people’s perception”.

Let me elaborate on that. There are several jobs, considered unworthy, like being an electrician or plumber, that pay more than jobs that require university studies. But a lot of people stick in their low-paying jobs only because they are ashamed of telling other people that what they do is not something that would require a PhD. (This is one of the main reasons people make up fake titles in their LinkedIn profiles. “Chief of staff” usually means assistant.)

Many examples from various fields illustrate the potential for success when individuals overcome the sunk cost fallacy:

Julia Child discovered her passion for French cuisine at 50, after working in advertising and other state jobs all her life.
Ray Kroc was 52 when he pivoted from selling milkshake mixers to franchising McDonald's.
Colonel Sanders founded Kentucky Fried Chicken at 65, after careers as a streetcar conductor, insurance salesman, and service station operator.

And my favourite example: Bill Campbell.

Bill Campbell was one of the most important leaders in Silicon Valley and the personal coach and mentor to some of the biggest leaders in tech. From Steve Jobs to Larry Page, Jeff Bezos, and Mark Zuckerberg, just to name a few.

Bill was a football coach for Columbia University when he first entered the business field at 39. In 4 years, he was the VP of Marketing at Apple.

I strongly recommend the book written about him, “The Trillion-Dollar Coach”.

The sunk cost fallacy, while deeply ingrained in human psychology, doesn’t need to dictate how we spend the rest of our lives. The most successful professionals are those who can adapt, pivot, and embrace new opportunities, unburdened by the weight of past investments.

Remember that we should make choices that align with our current aspirations, skills, and the evolving demands of the market.

Not with our past.

💌 Thanks Leo for sharing your post with us! Readers can see this full post in The Level Up Ladder here.

The Career Whispers is famous for its specific and actionable advice and tactics. So, assuming you buy Leo’s approach, let’s take this idea of avoiding the sunk cost fallacy and turn it into a roadmap for a career pivot.

As a job search coach, I talk to people every week who want to make a career pivot. Some are more like roofshots (nearly 100% achievable given reasonable strategy and tactics), like shifting from backend software engineering to ML engineering. Others are pure moonshots, like pivoting from a working architect job designing buildings to shifting into digital interaction design. And everything in between.

In a hot job market, moonshot career shifts are easier. Companies need to grow at all costs, and one source of fuel for growth is talent. To grow fast enough, they have to take bigger risks on incoming talent. Hiring risks they’ll take in growth mode include hiring people:

at level +1 from their current role
who are reskilling, ie from bootcamps, certification programs, and/or graduate programs
who are pivoting from a totally different role/field

When hiring re-skillers or pivoters, smart companies assess candidates for two leading indicators of success:

proven success in their prior field
evidence of capability in the new field, ie a small portfolio of academic or pilot-scale projects

In a hot job market, you can join a bootcamp, get a few new certifications, and land a new role within a year.

We’re not in a hot job market, though. We’re in a very challenging one. So, what do you do if you want to pivot? Here are the three strategies I’ve seen work for career pivoters in a more bleak tech job climate:

(1) Have a multi-variate strategy. Don’t bet the farm on a single strategy, ie bootcamp or networking or free internships alone. The ideal strategy leans heavily on what I’ve previously shared in a post about the 4-hour job search (shared below if you’re curious):

TCW #032 | The 4-hour Job Search

Coach Erika

September 1, 2023

Read full story

Build a career story (and resume, and LinkedIn) around the role you want. Rework everything to point at this new role. Use your voice and your artifacts to convince others that you’re well on the path to the new role. You're not a risk, you're a diamond in the rough.
Leverage your network. They’ve seen you succeed in a different role, so it’s a small leap of faith to imagine that you will succeed in this new role. Work your network for 80% of your job pipeline, don’t waste time on cold applications (you won’t make it past the ATS filters 90 percent of the time, it’s a hard truth but in this market pivoters have an uphill climb).
Limit your job search to 4 hours a day (if you’re unemployed) or 4 hours a week (if you have a job). Use the rest of the time to become more — not less — well rounded. If your pivot is a moonshot, you can use the remaining time to work in the field as a volunteer and build your portfolio. Which brings us to our next strategy…

(2) Build a portfolio. Show everyone that you’re already in motion into the new scope and role. Build it with as much real-world evidence as possible (case studies, not academic assignments and other graded work). It’s completely OK to start with academic work if that’s all you have. Even the tiny demo projects from Udacity courses are fine. Everyone starts somewhere, but build fast toward real-world evidence with real-world use and results. How to get real-world experience? Volunteer, do free internships with friends’ companies or local startups. Get scrappy to get work, and worry about getting paid later (if you can).

(3) Be willing to start with contract work. In a hot market, you can switch jobs and pivot from an FTE role in one job function to an FTE role in a totally different job function. In this market, it’s near-impossible to do that. Instead, your goal is to build your portfolio with as much real-world evidence of your abilities as you can (see Strategy #2). Taking a contract role, if you can afford to, is the fastest way to build a real-world portfolio and get into an FTE role in your desired field.

🎉 That’s a wrap! I hope this helps you navigate your career and thrive. Comments welcome, for both me and

Leo Alexandru

Avoid the sunk cost fallacy and make a career pivot (even in the current tech job downturn)

It's never too late to pivot your career, but in this market you need a robust plan. And that plan probably shouldn't rely on bootcamps, AI courses and certifications, or formal education alone.

It’s never too late to start anew

TCW #032 | The 4-hour Job Search

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