Job titles are critically important to how companies organize themselves. But over the past few years, titles have ballooned to the stratosphere. Here are the biggest challenges posed by job title inflation, and some solutions.
Today on the Argentus blog, we’re talking about job titles. While titles aren’t as absolutely critical to talent attraction as salaries are, they’re still important. When you’re trying to get a candidate in the door, or keep them from jumping ship, a juicy title can be a motivating factor, especially to candidates at the junior end of the spectrum who are trying to boost their career.
A series of progressive titles is the best way for a job candidate to show career progression. They help people show how they’ve taken on more responsibility, and that their efforts are worthy of that responsibility.
Titles are also, of course, crucial to how organizations are structured. They allow companies to differentiate leaders, and outline accountabilities and reporting structures. An analyst reports to a manager, reports to a director, reports to the executive team. This structure is as old as the corporate world itself, with many good reasons for existing.
But over the past few years, job titles have become a little bit wild.
A few weeks ago, the Toronto Star wrote an article that caught our eye. It’s all about the increasing trend of job title inflation, and its impact on talent attraction and retention.
In short, more organizations are offering big title bumps without increasing a candidate’s responsibility, accountability or reports. Think about how many people now have “Executive” in their title. Or how “VPs” have proliferated across organizations. Titles have floated up into the stratosphere, and it creates some issues for companies looking to hire, and for candidates looking to progress their careers. What a title exactly means has always been a bit fuzzy, but if a title ceases to mean anything, it can cause some big headaches. In our world of supply chain and procurement, title inflation has been less of an issue, but it still happens.
Today, we wanted to write a post explaining why companies tend to inflate their job titles, and talk about some of the issues with title inflation—as well as our take on how to mitigate these issues.
First of all, why do companies inflate their job titles?
- To attract or retain talent. As mentioned above, the most obvious and common reason why companies inflate their titles is to appeal to candidates—especially younger candidates looking to progress their careers. Junior candidates are more likely to take a role if it has a “lead,” “manager,” or “executive” title. But this applies to more senior candidates as well. Companies will also offer increased titles to avoid having candidates jump ship—often in lieu of an increase in responsibility or salary.
- To give credibility to client-facing or supplier-facing employees. External partners are more likely to take an employee seriously when they have a more impressive title. This especially goes for sales roles, but also goes for supply chain roles. Companies want people dealing with suppliers to have more authority, which can lead them to boost their titles.
- To appeal to investors. Having varied and senior-sounding titles makes a company seem bigger and more-established than it is, which is why startups sometimes use heavy titles to appeal to investors.
What major issues does job title inflation cause?
- Eventually, candidates will ask for a salary to match. If you hire or promote someone to a title that’s bigger than their salary and responsibility, it’s only a matter of time until that person researches comparable titles, and starts to expect that salary.
- It makes candidates less credible. While a title larger than your responsibility seems appealing, it can cause issues in the future. Here’s an example: say you’re an analyst, but your title says “Executive.” Later on, when you go to look for a progressive role as a “Manager,” it will seem like a step down—even if the money and accountability for the Manager position is more than your current role.
- It causes issues for recruiters and hiring managers. Most (if not all) recruiters and hiring managers use LinkedIn and other keyword searches to source new candidates. If your title is vastly inflated, you may get approached about opportunities, but they won’t be the right ones. After a conversation, you’ll find that your large title has wasted their time—and yours as well.
- It can create internal equity headaches for companies. Pay equity has emerged as a huge issue, but title equity is an issue as well. Once a company grows to a certain size, inflated titles can become messy. Not only do unequal job titles create equity problems, which leads to employee resentment, they can be a distraction.
- It focuses too much on hierarchy instead of accomplishments. An overly hierarchical title organization can make employees care more about internal politics than results.
- Job title inflation is a one-way street. The more byzantine a company’s title structure is, the harder it is to smooth it out later. And people will justifiably balk at changing their title to a less senior one purely to make things more fair.
So what’s the solution?
First of all, it’s important to note that job titles have never been completely standardized. Some organizations are “title-heavy,” and others are “title-light.” That’s just the way of the world. There will never be complete standardization across companies, but that shouldn’t be the goal. So what should the goal be instead?
Transparency and simplicity.
The closer an organization is able to get their titles to what an employee actually does, the better. Companies should make an effort to have a standard title hierarchy, with clearly-defined titles. For example, the term “Manager” can be ambiguous. Does it mean they manage a team, or that they manage a function, or both? A “Director” used to be someone who can guide the entire business, whereas now it mostly means “the head of a certain function.” Define what these terms mean in your company, and how your compensation structure aligns. HR pros call this “job levelling.”
The more thoughtful you can be about titles when hiring, and the more accurate you can be, the more headaches you’ll save yourself down the road.
And if you’re a candidate and you’re offered a big title bump in lieu of an increase in salary or scope, buyer beware.
At Argentus, we provide consultation to companies across supply chain management on title equity as part of their hiring efforts. If you’re hiring for a role in supply chain, procurement, logistics, operations, project management or change management, and looking for guidance how to title it—or have any other hiring needs—reach out to Argentus! Call 416 364 9919 or send an email to email@example.com!