Inflation has been a trigger word for economists for the past year, and while the consumer price index seems to be ever so slightly right-sizing, the corporate world is experiencing another type of inflation that is not showing any signs of easing. Job title inflation is a direct result of the recent recruiting challenges, but could end up creating more issues than it solves.
Defining job title inflation
Job title inflation is a recruiting strategy. Companies offer an elevated job title to a candidate to entice them to come onboard. However, the responsibilities of the role don’t match the title. In other words, the candidate gets the new, supposedly more senior job title but not necessarily the actual duties of said position.
Examples can include an HR manager offered the title of “VP” or a sales associate offered the role of “manager.” We have also seen companies getting more creative, creating new titles like “Brand Evangelist” and adding additional “Head of X” titles to entice employees.
This trend is enormously popular in startups as creative titles such as Czars and Ninjas signal a fun and casual company culture, while allowing companies to trade an inflated job title for compensation. However, in more recent years, the corporate world has started to adopt this practice. Demonstrating the rise in job title inflation, between 2019 and 2021, there was a 100% increase in the amount of job titles containing the word “Lead” and “Principal” in the tech industry. The same report also found a 25% increase in titles containing the word “senior.”
Title inflation can be detrimental to a company’s culture as it can create undue confusion among employees around management responsibilities and frustration among those hired into inflated titles, which can lead to high turnover, unmotivated employees, and toxicity in the workplace.
Inflated job titles can also deter qualified applicants from applying, making them think they are unqualified. This happens more frequently to women, who only apply to jobs for which they believe themselves to be 100% qualified. This may be unconsciously limiting a company’s applicant pool and impeding diversity.
Linking title inflation with recruiting
With a potential recession looming, even Big Tech is tightening their budgets, making huge cost-cutting layoffs. Title inflation offers recruiters a competitive edge and a way around paying more for top talent, as many candidates will take an elevated job title over a salary increase, especially those looking to climb the corporate ladder. For this reason, flexible titles are beginning to become more commonplace in new hire negotiations.
On the other hand, candidates who accept a position with an inflated job title—even unbeknownst to them—may find themselves in a position they are not quite qualified for based on their past experience. And, if they have to leave that position for a lower level, it won’t look good on a résumé.
Preventing job title inflation
Although job title inflation has already begun to seep into our corporate society, there are steps companies can take to curb its growth.
- Align titles appropriately. Ensure your company’s recruiters and hiring managers are not actively inflating job titles and are instead interviewing and hiring candidates that match the experience level required for certain positions. This will set your current employees and organization up for success and help curb employee turnover.
- Plan ahead. Companies need to hold themselves accountable. Before interviewing, HR teams should think through the exact role and its responsibilities. Simultaneously, they should be researching the appropriate pay for that position. If all this is done ahead of time, recruiters and hiring managers will have the tools they need to find the right candidates.
- Explain the role clearly. When negotiating with candidates, be clear about the responsibilities of the role you are interviewing them for and how the candidate’s experience measures up.
- Bridge to other benefits. When negotiating with a candidate who wants a higher title, lay out the other benefits the opportunity offers in addition to salary and title. While this particular position might not be the level a candidate wants, the company could offer plenty of career growth opportunities, which is also a top selling point.
Counteracting title inflation with pay transparency
As the job market continues to fluctuate, with some industries experiencing labor shortages and others making layoffs, companies will be tempted to use job title inflation to help alleviate recruiting challenges and keep internal employees happy.
There is a silver lining, though, in the form of the new pay transparency laws in states like New York and Colorado. Allowing candidates to see salary ranges for open positions from the start of the candidate journey may help counteract inflated titles by providing more transparency into the experience needed for the role, the job responsibilities, and what a career path at the company could look like, both in terms of salary and responsibility.
HR teams and business leaders should focus their efforts on finding candidates with the right mix of experience and who believe in the company’s mission and values, and nurture career development internally.
Kara Yarnot is the vice president of Strategic Consulting Services at HireClix.
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