Greg de la Cruz works in the tech industry and is the author of two published titles on Amazon.
You could be hanging onto a job that pays well and ticks every box of your to-have list, but is that same job making you miserable?
“Golden handcuffs,” as described by Will Kenton in an Investopedia article, “are a collection of financial incentives that are intended to encourage employees to remain with a company for a stipulated period of time.” These rewards, or promises, are offered to existing key employees as a means of holding onto them.
They’re essentially retention bonuses on steroids.
The concept of golden handcuffs may seem logical—give your best employees something to look forward to, and that way, they need not go away. And by “best,” the employer might actually mean most tolerant. Because often, those who are unknowingly restrained by golden handcuffs work the most soul-sucking jobs, demanding long hours and bought-out family time.
At some point, opportunities will present themselves to you which may become the turning point—will you stay within the paved path promising a stable, predictable ascent to an ideal career—or will you go off the beaten path to try something less miserable?
Describing “Golden Handcuffs”
Nobody will tell you that you are trapped in a golden handcuff situation—you need to be aware of signs from your lifestyle and career to self-assess just how strapped in you are. What follows are a few quotes from career experts on what they characterize as being in golden handcuffs:
- Career Coach Eli Bohemond: “Before we know it, we’ve spent years working tirelessly at a job we don’t enjoy to earn money we aren’t fully appreciating, and we’ve already sunk so much into that career path that we feel it would be a mistake to try and find work elsewhere.”
- Harvard Business Review contributor Daniel Gulati: Quoting an investment banker, “I dream of quitting every day but I have too many commitments,” and quoting another consultant, “I’d love to leave the stress behind, but I don’t think I’d be good at anything else.”
- Investopedia VP of Content Will Kenton: “When these incentives are offered, they come with certain terms. Usually, they state that bonuses or other forms of compensation are only paid out if the employee stays for a defined period of time, or if they are paid out first, they must be returned to the company if the employee leaves before a certain date.”
- Forbes Councils Member David Smith: “Money, power, and status are powerful incentives for keeping our hands tied when our hearts and souls would rather not be. Reaching a specific income level or ascending to a position of importance are powerful motivators. But even when our emotional and physical health—or our family life—are at risk, we are often unsure of how to break free.”
Do any of these descriptions resonate with you and your situation? If not, I hope these five indicators that you are shackled by golden handcuffs will somehow open your eyes.
5 Indicators You Are in Golden Handcuffs
- The Pay: You’re reluctant to leave your job, fearing that you may never get the same salary elsewhere.
- The Perks: Aside from, or instead of a lofty salary, the benefits such as comprehensive healthcare coverage or subsidized housing costs are too good to leave behind.
- The Ladder: You don’t want to leave because of very good chances of promotion and career advancement.
- The Reputation: The company’s name is too well-respected, and you don’t want to be the person who chooses a lesser-known employer for the existing one you have.
- The Uncertainty: Crappy as your current job might be, you’re hesitant to leave because you’re uncertain if other jobs for you out there are any better.
1. The Pay
You’re reluctant to leave your job, fearing that you may never get the same salary elsewhere.
Maurie Backman, who wrote for The Motley Fool about golden handcuffs, describes her story of being trapped in golden handcuffs:
“After graduating college, I landed a great job at a hedge fund, where I rapidly climbed the ranks. By the time I reached my mid-20s, I was making double to triple what my peers were bringing home and was enjoying the financially comfortable lifestyle that came with that income.”
It’s crystal clear from her case that she was trapped in very shiny golden handcuffs, earning immensely more than her peers. But she eventually made the decision to leave her job because it made her miserable. But she didn’t quit right away – she had to prepare herself for the financial adjustment. “Before you leave a job with a stellar salary,” she says, “bank some money to buy yourself some options down the line.”
While it’s tempting to leave a golden handcuff situation in a burst of frustration or as a result of being worn out, it helps to be financially prepared when doing so. Perhaps once you’ve amassed enough emergency savings (Backman saved a year’s worth of expenses) then perhaps the idea that you’re not going to get the same pay anywhere else won’t scare you anymore.
I’ve known a few people who took on high-stakes roles with generous compensation but who were eventually able to break free of the golden handcuffs. The common denominator was that the stress and/or misery just didn’t become worth it as time went on.
2. The Perks
Aside from, or instead of a lofty salary, the benefits such as comprehensive healthcare coverage or subsidized housing costs are too good to leave behind.
Housing aid and health insurance are two good reasons to stay employed, and you can get the latter from any employer. But it’s not the fact that these perks are there that makes you hesitant to leave—it’s because you’ve gotten very used to the support. And worse, perhaps you’ve taken on too many financial obligations that it’s almost impossible for you to manage without the subsidized housing.
It’s not easy to find another employer that provides financial assistance on your rent or mortgage, which makes the golden handcuffs feel all the tighter.
Throughout my career, I’ve heard colleagues say that they won’t think of leaving because the company’s healthcare coverage is just too good. Some policy agreements allow as many as five dependents, or even more—which means that if any of the six members of your family get sick, you usually won’t have to pay for anything at the hospital.
Unknowingly, these colleagues are held hostage by a perk that clouds their judgment. They could be a lot less miserable or could even grow more with another company—or even get better pay—f they just chose to look for better options instead of settling for comfort.
3. The Ladder
You don’t want to leave because of very good chances of promotion and career advancement.
I remember one of the first jobs I ever had, and it was an entry-level contractual position that paid just slightly more than minimum wage. But the great thing about that first job was that I was working for a national government agency, and I would later learn that the average salaries for regular employees there were as good as anyone could hope to find locally.
As a young employee freshly minted from college, the senior employees would frequently encourage me to stay on and never think of leaving. “You’ll be set for life,” one of the officers used to say, and “you’ll be enjoying the year-round bonuses,” said another.
But the path to becoming a regular employee at a national government agency isn’t straightforward. There are unexpected twists, and more importantly, there are people who know people who know people. These are the ones who have the path of least resistance available to them, unlike me.
But the promise of becoming one of them—earning a good salary, taking bonuses left and right, multiple retirement funds sponsored by the employer—it was enough to get me to stay for a while. Until came the point when I realized I had stagnated intellectually and was simply falling in line just to get the opportunity to climb the ladder. That was when the handcuffs were starting to come off, and they weren’t even golden to begin with.
There’s a good chance that your story of ladder-climbing could sound a lot better than mine. Just know that wherever you might decide to go, there’s always another ladder waiting for you. It’s merely a question of which rung you’ll start at, which is also why others are fond of the idea of “climbing across” corporate ladders.
4. The Reputation
The company’s name is too well-respected, and you don’t want to be the person who chooses a lesser-known employer for the existing one you have.
To land a job at Apple or Google if you’re in the tech industry or at Merck or Pfizer if you’re in pharmaceuticals are dream scenarios for anyone, especially when you don’t have any well-known companies listed in your resume.
And it would make no sense, especially from the perspective of an outsider, for you to leave your current role for another job at some unknown. Not unless this next job pays immensely well or is several promotion levels up—then maybe it would make sense, but wouldn’t you simply be exchanging your current golden handcuffs for another brand of handcuffs?
Some use the company’s brand to pad their resume, stay a while even though the work conditions suck, and leave once their boosted personal reputation gets them noticed somewhere else.
And it’s also that next employer’s bragging rights to say, “We poached him from Netflix,” or “We’re hiring an ex-Microsoft engineer.”
Being trapped in a situation where it’s the company’s name that’s making you stick with a bad job is another indicator of golden handcuffs. In this case, you’re staying on not simply because the salary and perks are too good to pass up, but the status of being someone who “works for” a big-name company restrains you from thinking of looking for better opportunities.
It’s worth noting that the workload and expectations, when employed in these companies, are usually very high. Working for Apple, for example, is known to be characterized by working on weekends and sometimes foregoing time off on holidays. This means that these high-status jobs are not the ones that you take to retirement—they’re simply a phase for some people.
5. The Uncertainty
Crappy as your current job might be, you’re hesitant to leave because you’re uncertain if other jobs for you out there are any better.
This brings me back to Daniel Gulati’s quote from a consultant—I’d love to leave the stress behind, but I don’t think I’d be good at anything else. Uncertainty is inevitable, even when you’ve been in the job market for a long time. And I would argue that it gets even more uncertain as the years go by. Your skills could become irrelevant or outdated—your work experience could be one where it’s not even considered an advantage among other applicants.
Really, the uncertainty you’re likely to face when handcuffed to a job but trying to find a way out comes from insecurity. You’re scared that you’ve wasted all those years working a job that didn’t develop any skills that are useful to another role. And you might be thinking that the expertise you’ve gained at your current position just isn’t in demand.
Being insecure is something all jobseekers experience. And being fought over by many competing employers is not as common as we think it is—it only happens for less than one percent of jobhunters. So if you think the reason you’re not thinking of leaving your job is that no one else will want to have you, then you’re in handcuffs. And to the uncertainty on whether there are any better jobs out there for you—there’s no way for you to know unless you try.
Why Slowly Slipping Off, Not Breaking Free, Might Be Better
Writing for Forbes, David J. Smith recommends not to break the handcuffs but to slowly slip them off instead. “For those who are handcuffed,” Smith says, “it’s not so much about breaking out of them as much as figuring out how to slip them off.”
“Rather,” he adds, “it should be an intentional process, perhaps even taking one off at a time until you are comfortable with both of them off full-time.”
While we’re sticking with the metaphor here, what he really means to say is that being free from the restraints of the privileged job you currently have means that you’ll need to change your expectations, values, and financial needs. You may need to readjust your investment and retirement portfolio. You’ll perhaps need to think about those expected college expenses for your children.
“Planning and resetting financial and lifestyle expectations are critical here.”
Beware of the golden handcuffs. Good money and great perks always end up costing you in some way.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Greg de la Cruz