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How 'anchoring' can impact job seekers

·Writer, Yahoo Finance UK
Don’t let your future be defined by one (potentially biased) angle or opinion.
Don’t let your future be defined by one (potentially biased) angle or opinion.

Looking for a new job can be challenging - whether it is striking the right balance between doing something you love and earning enough to pay the bills, or deciding whether or not a company is right for you.

Many of us weigh up the pros and cons of working somewhere to help us make an informed decision. Yet another factor can impact our decision-making process whether we realise it or not. When we are trying to decide on something, we often use an “anchor” - the first piece of information offered - as a starting point.

Moreover, psychologists have found that we have a tendency to rely too heavily on this anchor, which can have a serious impact on the decision we end up making. This phenomenon - known as anchoring - is a type of cognitive bias that can seriously impact job seekers.

“Anchoring is a phenomenon in human psychology,” explains Jay Munro, a recruitment expert for Indeed, speaking at the Indeed Interactive conference in Austin, Texas. “I like to think of a boat. If you throw down an anchor, you start to drift away, but not too far from that point.”

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Researchers Amos Tversky and Daniel Kahneman were among the first to study anchoring and the effect it has on the way we think in a 1974 paper.

In one study, they found that random numbers could lead people to make incorrect estimates. In one example, volunteers spun a wheel to select a number between 0 and 100. They were then asked to adjust that number up or down to indicate how many African countries were in the United Nations.

Those who spun a high number gave higher estimates while those who spun a low number gave lower estimates. The study showed the participants were using that initial number as their anchor point to base their decision.

So in what ways does anchoring impact the way we make decisions when it comes to looking for a new job?

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“I think the biggest negative is that we’re not always aware that they’re forming,” Munro explains. “It means that we could miss on really valuable or amazing opportunities, if we aren’t aware of them.”

We might be deterred from applying for a potentially great position because of a certain phrase or word in a job description. And although reviews of businesses can be really helpful in deciding whether a company is the right fit for you, seeing a single negative review on websites

such as Glassdoor can also put us off from applying - whether they are legitimate and justifiable, or not.

“Reviews act as an anchor because we hold onto them,” Munro explains. “Negative reviews can alter perceptions.”

Anchoring also comes into play in negotiations, too, particularly when it comes to salaries. In situations of uncertainty, the first offer made - the anchor - can influence the conversations throughout the rest of the negotiation process.

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Recruiters may ask about your current salary to gauge how much they can expect to pay you. If you currently earn £25,000 but have improved your skills and experience that you are now worth £30,000, however, you may be stuck with that initial anchor - which may mean the salary offer is less than you would ideally want.

Studies have found that making the first offer can often work in your favour - as long as you don’t underestimate your worth. When the anchor is set high, the final negotiated among is often higher.

Natasha Stanley, head coach at Careershifters, the career-change specialists, explains further: “We often see anchoring (and its paralysing effects) in the people we work with in the form of broad, sweeping ideas about the world of work: what counts as a ‘proper job’; what hoops you’d have to jump through to move into a new industry; whether or not it’s really possible to get paid for something you love.”

Although some of those ideas may turn out to be true, Stanley adds, we often find that they’re based more on fears rather than facts.

“That’s why we advise people we work with to apply Toyota's principle of 'Genchi Genbutsu’, or ‘go see for yourself’,” she says. In order to understand a situation, we need to go to the “real place” where work is done.

“Don’t let your future be defined by one (potentially biased) angle or opinion, go and find out for sure,” Stanley adds.

“By running small, low-risk, real-world experiments – talking to multiple people in different industries, trying out different ways of working, going to events and conferences and classes – you can build up a bigger, richer, more accurate picture of the options available to you and make faster, more meaningful progress toward fulfilling work.”

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