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Episode 78 | HARNESSING THE LABOR ILLUSION

Updated: Nov 4, 2021



Sometimes people don't want to hear the truth because they don't want their illusions destroyed. Friedrich Nietzsche

I couple of years back I formed two limited companies. One was Firefly Films Ltd and the other was a cleaning company. As I mentioned in episode 69 I have always fancied starting a business that’s not in the business, but I’ll come back to this in more detail in a future episode. I wanted to effectively park the film company until I needed it as I was developing several features at that time, and also park the cleaning company until I had the time to get it going. I set them up, and in the UK I listed them as dormant, which costs only a few pounds a year effectively, until I needed them. Little did I at the time but I was to go into two of the busiest fight directing years I’d ever had. I’d been advised to have an accountant who sets companies up to help me with of this so I did that. The trouble was that they were charging me a LOT of money. It was £300 the first year to submit dormant accounts for both companies which I paid as I was run off my feet and needed the help, then the next year they asked for £140 which I was happy to pay too. Next, that same year they asked for a further £300 and I had to stop and say, hold on a minute. I realise you have the skills here and I’m paying for your time, but you told me when we formed these companies that it would be £12 a year. Why all these fees? They explained that the £140 was to file a confirmation statement for both companies in year 2, the further £300 was to file the dormant accounts. I fired them and did it myself at that stage because I felt I’d been lied to when I set it all up. In the end, doing it myself, the accounts cost £13 and took me about 20 minute to figure out and file as zero. Last month I filed the confirmation statements myself. It cost £13 too. I also closed the cleaning company as I’m simply too busy to do anything with it. So why as I charged £440 by the company when the HMRC costs in total for both companies were only £52 to submit. And took less than an hour? Because I was busy and uncomfortable with the work, so I didn’t look too closely at first and because the work was mystified by the qualified accountants. I was effectively tricked by the accountant to pay £388 for a task that could easily have been done by myself.


I came across the phrase THE LABOR ILLUSION whilst researching an earlier show and I noted it for future reference as I found it to be a bit of an eye opener. It won’t take too long to cover but it’s a business concept that I want to highlight to you freelance creatives out there.

The spinning wheels, rotating egg timers and moving progress bars we regularly see on our screens when using our electronic devices are often misleading. Rather than offering an accurate representation of work being done, they are more often than not simply there to give the impression that something is happening behind the scenes. They provide us with a sense that we are not waiting in vain for something to happen. William Park

The Labor illusion is perhaps best described through use of analogy. In a terrific article for the guardian’s Health and well-being section, Oliver Burkeman retells a story presented by psychologist Dan Ariely about an eye-opening encounter with a locksmith. Business was bad, the locksmith confided. When he was starting out, picking locks took him for ever, and sometimes he'd have to smash them open, but customers appreciated his efforts and gave generous tips. Now, as a veteran, lock-picking took him mere moments, and his clients, seeing how easy he found it, had stopped tipping. Worse, they even resented paying his fees for what seemed like so little elbow-grease. Perhaps the locksmith should have heeded the timeworn tale of the industrialist whose production line inexplicably breaks down, costing him hundreds of thousands per day. He finally tracks down an expert who takes out a screwdriver, turns one screw, and then – as the factory cranks back to life – presents a bill for £10,000. Affronted, the factory owner demands an itemized version. The expert is happy to oblige: "For turning a screw: £1. For knowing which screw to turn: £9,999." These are two sides of the labor illusion.

The psychology works like this, we value things more when we believe effort has been put into them – particularly if that effort is on our behalf. Hard work, put in just for us – triggers feelings of reciprocity that leads us to perceive the service as more valuable, and our appreciation and satisfaction rises. Also showing the work in progress reduces uncertainty and promotes perceived quality. Interestingly, this Labor Illusion only works when we’re given specifics about the work being done for us. It’s why I didn’t like to discover that I was being drip fed information about the costs and complexity of the task. I had to investigate myself and as a result I dropped them as I’d discovered I’d been kinda duped.

Research on this topic by the Harvard Business Review suggests that people also find waiting more tolerable when they can see the work being done on their behalf—and they tend to value the service more. This holds true even when what’s shown is merely the appearance of effort.

A demonstration of effort, whether literal or not, expended to meet a customer or a client’s request—can be so effective that many who endure waits but see a running tally of tasks end up happier than those who don’t have to wait at all. This waiting element of the Labor Illusion is known as the Kayak Effect – named after a popular travel price comparison app. It has been proved that satisfaction and perceptions of value actually increase with wait time – particularly if you end up delivering a quality package.

There are a few takeaways from what I’ve been talking about today. I’m thinking that this will be useful information for creatives who have to work with clients or to provide a service of some sort.

1. People will be happier to engage you if they know exactly what they are getting but less likely to do so if they do not. Transparency will help you to gain trust and goodwill in your endeavors.

2. If a client wants you to do things quicker, and they know what is involved. They will happily pay more money for a speedier delivery or a quality product.

3. That people will be happy to wait for a better quality of service or a higher quality end result, and finally

4. That if you are highly skilled and efficient, or can quickly deliver a high quality service or product, your customers may be more willing to pay your rate, if you take your time delivering it.

I only want to open your mind to these concepts here today. This is employed in technology every day, all around us. Apps do it when you use search functions, they slow the results to make it appear they are working, Starbucks does it in how they prepare their coffees, they make separate hot milk for each customer so that you can see the work being put in, when it would be more efficient to do it in batches – it’s everywhere. I know that many of you will find this topic slightly unsettling but maybe, just maybe, you’ll find the information here useful and maybe it will even change your life or your business. At the very least I hope you find it interesting.

Thanks for joining me here again today and investing in yourself. If you have enjoyed the show I would be incredibly grateful if you would take the time to leave a rating or a review on whatever app you use to listen to podcasts. It’s the one thing that really bumps this show up in the rankings.


Today’s sponsor is Geekified, a youtube discussion channel of all things geeky. From Marvel movies, new TV show reviews and comic releases to discussing directors, it’s all there. And they are always looking for new guests. I’ll put a direct link in the show notes. Go check it out.

In the next episode I’ll be talking about motivation but not as I’ve done so before. I’ll be talking about motivating teams. This was a topic suggested by Pittsburgh USA based @MStuart3462 on Twitter.

I’ll end now with the words of Chartered psychologist specializing in consumer behavior, well-being and technology Paul Marsden who said If you have to work to give your customers what they want, don’t hide it – flaunt it!

Now take control of your own destiny, keep on shootin’ and join me next time on FILM PRO PRODUCTIVITY AND SUCCESS!

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