Title Inflation Can Attract Talent but Deflate a Job

Estimated reading time: 5 minutes

Job titles are important. I once had a vice president tell me, “Once you get director in your job title, you never have to go back.” And he was right. As I moved up the career ladder, I found that people asked fewer questions like “Do you know how to conduct job interviews?” and more about my point of view (POV). Your job title can imply you have attained certain knowledge and skills.

Which is why today’s interview is so important. If we don’t get job titles right, it’s possible that we could be creating something called “title inflation”. I recently had the chance to speak with Shawn Cole, president of Cowen Partners Executive Search located in Vancouver, Washington, about this dynamic. Cowen Partners is a full-service executive search firm whose clients include Starbucks, Nordstrom, T-Mobile, BlackRock, and one of my favorite tea companies, Steven Smith Teamaker. 

Shawn, welcome to HR Bartender. Let’s start with a definition. What exactly is “title inflation” and can you give us an example?  

[Cole] Title inflation is when a person’s title makes it seem like they have more responsibilities than they actually do. It’s an ego-driven approach to luring talent that might otherwise be hesitant to make a move. For example, we are seeing a lot of ‘head of XYZ’, which denotes leadership responsibilities without a VP or chief title. In many cases where a person used to be called ‘senior’, they are now being called ‘director’. 

And correct me if I’m mistaken, I assume that this refers to only the job title and not any pay or benefits?

[Cole] Correct. Inflated titles are used in lieu of or in addition to compensation. 

Is “title inflation” something being initiated by organizations? Candidates? Or both? What trends are you seeing?

[Cole} Organizations are using title inflation as a tool to compete for talent. Though, candidates can sometimes demand a higher title. For many years, only bootstrapped startups used these inflated titles to lure talent. Think head of engineering, exaggerated VPs and C-suite titles. Now, with the war for talent in a tight job market, it has become more mainstream. 

When “title inflation” is initiated by an organization, what is the endgame? Is there evidence that this approach is successful?

[Cole] When organizations initiate title inflation, the goal is to win talent. If a candidate has two job opportunities and they both pay the same, but one has a cooler title, the company with the more impressive title wins. This can also be a retention play.  The Financial Times recently reported on an accounting firm that promoted thousands of people to ‘partner’ without offering profit sharing, increasing salary, or adding benefits. 

Now, the organization has a ‘partner’ with a lower case ‘p’ and ‘Partner’ with a capital ‘P’. There’s so much for hiring managers to be aware of.

Speaking of awareness, I can see how employees need to be aware of this as well. I’m wondering, are there any benefits to “title inflation”? 

[Cole] In the short term, companies can benefit by snagging top talent. Employees get to sound impressive in front of their peers. But the downside is steep as businesses begin to realize titles are no longer assumed. Go to a bigger company and you might be a manager. Get too fancy of a title and hiring managers may not want to hire you at all. Titles aren’t assumed or transferable because of title inflation. It’s over.

You’ve started to touch on the downsides to “title inflation”. Are there any other things to consider? 

[Cole] Title inflation disrupts the org chart. You’ll have a hard time demoting people assuming your company grows, and you need to hire people with real qualifications. Employees’ resumes are ruined when they try to leverage their title outside the company that gave it to them.

Last question. How would someone know if they’re being exposed to “title inflation”? And this applies to both the company (if the employee is asking for an inflated title) and the candidate (if the company is offering one).

[Cole] Good question, I think it takes two to tango or as those multi-million-dollar email scams go there is no victim because you both knew it wasn’t true. 

For companies who want to avoid a nasty surprise when their new VP doesn’t have any actual leadership skills, hiring managers should use LinkedIn and look at the background and experience of similar candidates with the same title in the same industry and see how they compare. HR professionals must be aware and ask questions to make sure the title matches the job responsibilities. For example: Are the skills transferable? Who did you report to? Did you manage others and if so, how many people? 

The same goes for the employee. You know if you’re getting a title that doesn’t match your actual duties. If you’re going to be a called a ‘manager’ but have no direct reports and you’re not managing a process, that’s a red flag. 

I want to thank Shawn for taking the time to share what he’s seeing in the job market right now. I think title inflation can negatively impact both organizations and individuals so it’s something we all need to be aware of. 

Title inflation doesn’t mean that you can’t negotiate a job title. It’s a normal part of the process. It means be realistic about what the title represents. What might benefit you in the short-term, could hurt you in the long-term. That goes for employees and organizations alike.

Image captured by Sharlyn Lauby while exploring the streets of Las Vegas, NV

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