The Pitfalls of Job Title Inflation
As the war for talent has ramped up over the last two years, a concerning new trend has emerged; job title inflation. Originating with bootstrapped startups lacking the budget to attract talent via competitive compensation, job title inflation is the practice of using exaggerated or grandiose job titles that don’t accurately reflect the work being performed. For example, a “receptionist” might become a “director of first impressions” or a “customer experience officer”. Managers may become senior managers, and senior managers may become directors, with no change in job function.
The trend isn’t all that surprising. Titles have currency in the job market, and for businesses trying to gain a competitive advantage - especially those unable to offer attractive salaries - it looks like a winning strategy.
At first glance, title inflation also looks like a good solution when it comes to retaining employees on the cheap. Businesses unable to afford a pay rise - not uncommon in the wake of the pandemic - may offer a ‘promotion’ in the form of an inflated title. Surely a win-win for both employee and employer?
However, while it may seem harmless, job title inflation comes with a number of unintended consequences.
Title inflation is a trap for employers
“Do titles really matter?” you might ask. In a word, yes. A job title carries a set of expectations. It clarifies a person’s role and relative status within an organization, creates an external perception, and implies a salary level. As such, titles should be chosen with care.
If you find yourself considering giving an employee an ‘important’ job title (but the role doesn’t fit the title), exercise caution, as it has a knock-on effect for the whole of your organization. Other employees may think, “why them, and not me?” and before you know it, you’ve either got a workforce suffering with low morale, or a company full of directors.
Giving an employee a director title to keep them from leaving may seem like an easy win. But what will you do when, six months down the line, they point out that they’re significantly underpaid compared to other directors, and demand a pay rise?
Here’s how to avoid title-based chaos in your organization:
Create a standardized naming convention for job titles in your organization, incorporating industry-specific naming conventions. Involve the appropriate stakeholders in this process.
Make sure your job descriptions are clear and precise.
Design a progression roadmap that clearly delineates how an employee can move up the ladder.
Keep everyone on the same page by holding quarterly check-ins with employees. Talk about career progression, development opportunities, and performance.
Inflated titles and hiring
Title inflation is also bad news for companies during the hiring process. Those leveraging their exaggerated title to move to a new position may quickly find themselves in over their heads, and hiring managers need to be on the lookout for this. Pay particular attention to any candidate holding a job title that doesn’t fit their years of experience, or the work performed. If their title is inflated beyond their expertise and skillset, you’re looking at a bad hire.
Taking the time to ensure a candidate can actually fulfill the scope and responsibilities of the job will help you avoid falling afoul of this trend.