What are the Opportunity Costs of sticking it out with your current employer?
I talk with talented people about their careers each week. Most are much smarter that I am. Many stay with their current employer 5 or 10 or 15 years without understanding the Opportunity Costs to their career.
A quick definition: Opportunity Cost refers to the potential benefits or opportunities that an individual foregoes by choosing a particular career path over another. It represents the cost of the next best alternative career that the individual could have pursued but did not, due to their decision to stay on a particular path.
This week, I talked with two similar Engineers completely separately and confidentially. There were close friends. They attended the same university and graduated in the same Engineering degree at the same time.
Then they both started at Stryker the same month after graduation.
One Engineer left Stryker for two successive ortho startups. Always looked for new challenges and put himself in uncomfortable situations.
One Engineer had stayed with Stryker for 12 years. Played it safe. Never saw a reason to look elsewhere. Completed projects one after another.
The “safe” Engineer is a Project Engineer at Stryker.
The “risk” Engineer is the VP of Engineering at a startup nearby with equity.
I had a long talk with the “safe” Engineer about opportunity cost. He didn’t realize what he was missing because he couldn’t do A/B testing.
Understand the 7 types of Opportunity Costs in your career:
1/ Missed learning opportunities. Staying in a job for too long can cause you to miss out on learning new skills, knowledge, or techniques that could enhance your career prospects. As a result, you may fall behind in your field and miss out on promotions or career advancement opportunities.
2/ Reduced marketability: Staying at one company exposes you to only one way of thinking. If you don’t stay current with industry trends, technology, or best practices, you may find it difficult to remain competitive in the job market. This can limit your future employment opportunities and decrease your earning potential.
3/ Limited professional growth: Staying in a job that does not challenge you or provide opportunities for professional development can limit your potential for growth and advancement. You may become stagnant in your role, limiting your ability to progress in your career.
4/ Lower earning potential: Staying in a job for too long can limit your earning potential. Often you get “taken for granted”. You may not receive raises or promotions that reflect your experience or skills. In addition, you may not have the opportunity to negotiate for higher pay, which can significantly impact your long-term earnings.
5/ Decreased job satisfaction: This can be sooooo gradual that its hard to notice. Staying in a job that does not challenge you or allow you to use your skills and knowledge can lead to decreased job satisfaction and motivation. This can have a negative impact on your mental health and overall well-being.
6/ Risk of burnout: Staying in a job that is unfulfilling or lacking in growth opportunities can increase your risk of burnout. This can lead to decreased productivity, increased absenteeism, and potential long-term health issues.
7/ Missed networking opportunities: Staying in a job for too long can limit your opportunities to build professional networks, which can be essential for career advancement. You may miss out on opportunities to meet new people, build relationships, and learn about new job opportunities.