Golden handcuffs: Are you chained to a job you hate?

Would you stay in a toxic work environment for a pay package that could turn you into a millionaire?

It’s a question that made the rounds on the internet after a Bloomberg article shed light on the purported work culture at Nvidia.

In the article, past and present employees attested to the high-stakes environment that the chipmaker supposedly fosters amid its rise as the ‘brains’ behind most of today’s AI-powered machines.

For Nvidia, becoming a driving force in the AI economy has meant riding on the back of workers who must maintain the company’s momentum.

Pressured to meet their targets, some employees are subjected to long hours of work (up to 2 a.m. in some cases). Others are made to sit through team meetings that sometimes turn into shouting matches.

In one instance, a worker was said to have worked seven days a week. In another, a worker claimed to have been required at an average of 10 meetings a day, some of which had 30 participants at a time.

Nvidia’s ‘golden handcuffs’

Yet, despite what appears to be a toxic work environment, Nvidia takes pride in its low attrition rate of 2.7% – significantly lower than the 17.7% turnover rate seen in the wider semiconductor industry.

Insiders say most employees choose to stay because of Nvidia’s handsome pay and benefits package, which exceeds industry standards. Those who stick around long enough are capable of reaping millions of dollars.

It’s the proverbial ‘golden handcuffs’ meant to tie down high-value employees to their role.

Nvidia’s employee stock purchase plan – like most examples in the tech industry – locks in workers who must wait for their stocks to vest before departing from the company.

Reports suggest Nvidia employees would have otherwise left because of the immense pressure of building a nearly US$3 trillion tech company. Yet, given how Nvidia’s stock price has grown 3,700% since 2019, this financial incentive has been the same reason more than a few newly minted multimillionaires have emerged from Silicon Valley.

In a tongue-in-cheek fashion, Nvidia CEO Jensen Huang said, like a good coach, he would rather “torture [his employees] into greatness,” than fire them.

Read More: Demanding perfection: The leadership style of Nvidia CEO Jensen Huang

Golden handcuffs and employee disengagement

In the decades-old discourse on employee engagement, motivation and retention, the concept of golden handcuffs is no different from total rewards and compensation strategies that keep top talent in place.

Most talent attraction and retention schemes include sign-on bonuses, performance bonuses, commissions, stock purchase plans, lifestyle benefits, and loyalty programs. They are simply mechanisms to build and nurture a great team.

Meanwhile, other incentives such as employee stock options are meant to give workers some ‘skin in the game’ by enabling them to own a piece of the business.

Where golden handcuffs differ from most incentives, however, is in their failure to take into account employees’ well-being and growth, both in the workplace and beyond.

Far from inspiring employees to reach their full potential, some incentives become a trap – doing more harm than good to the individual and the team.

“To their employer’s credit, they are trying to show how much they value their [employees’] work by throwing the kitchen sink at them so they remain with the business,” said Gareth McCafferty, director of the Sydney-based staffing and recruiting firm Connexus Recruitment.

“What I’ve seen happen is, [golden handcuffs] tie disengaged workers to a business, forcing them to stay when they probably should go, and ultimately all it does is delay the inevitable.”

The connection between golden handcuffs and burnout

Workplace experts believe there is also a connection between people’s notion of their golden handcuffs tethering them to a company and their experience of burnout.

Analysing over 1.7 million employee surveys from 1,500 companies, data scientists from Great Place To Work found the phrase ‘golden handcuffs’ as the most frequently cited reason burnt-out employees saw their companies in a positive light.

In other words, the offer of above-standard compensation and benefits can alter how employees perceive their workplace – even when they are already experiencing burnout.

“Golden handcuffs point to toxic company culture bubbling under the surface,” said Claire Hastwell, Content Program Manager at GPTW. “That this shackled experience manifests in positive feedback, is telling. Employees are sucking up toxic culture out of financial necessity.”

Read More: The rising trend of employee-owned businesses

How to break free from golden handcuffs

Should employees waiting for their stocks to vest and their warchest to bulk up simply walk away? It’s a game of mind over matter.

For employees who feel trapped, Work It Daily founder and CEO JT O’Donnell offers unconventional wisdom: “The best way to avoid the very real scenario above is to recognise you are not an employee. You are a business-of-one. It’s time to take full ownership and learn to engage in smart business practices that will strengthen your professional position.

“I’m not suggesting everyone quit their jobs and start their own businesses. That’s not necessary. What I am suggesting, is you treat your career as a business, and learn how to work ‘with’ employers instead of ‘for’ employers. This fundamental shift in mindset will help you see what you need to do to take control and find the kind of career success and satisfaction you want and deserve.”

Banking industry veteran Bill Fanter – who teaches traders essential life skills and how to master their emotions when doing business – believes employees must take a look at their life choices to prevent their “handcuffs [from cutting] deeper”.

Fanter said he has seen many get trapped in their golden handcuffs. Once people start earning more, their lifestyles become more expensive and lavish. And so, the golden handcuffs become tighter.

“My advice? If you feel the golden handcuffs around your wrist, don’t resign yourself to a future where you have to wear them. That’s how you end up bitter, angry, and burnt-out at a job you hate,” Fanter said.

“Recognise that they’re there. Recognise that you need a change. Recognise that you’re meant for more.”

While salaries, stocks, bonuses and other incentives from employers can seem enticing, people should maintain some leverage: that is, the freedom to walk away from a situation that could trap them for years, especially if it is affecting their health, well-being, and growth.

Fanter recommends developing alternative income streams that could become an exit plan: “Create something on the side that can eventually become the key to unlocking those golden handcuffs.”