Just a year ago, the Great Resignation was at an all-time high and employers were clamoring to retain employees with everything from significant salary bumps to elaborate benefits packages. Now, thanks to inflation and an evolving job market, the shoe is on the other foot.
Employees are finding it harder to land jobs that pay what they’re looking for, and employers filling in the gaps by dangling fancy jobs titles over the heads instead.
This is according to a report from Pearl Meyer’s (a board advising firm) survey that highlights a shift in the way companies are leveraging job titles. Their 2023 Job Titling Practices Survey shared data from than 400 public, private, and not-for-profit organizations.
“We have all heard and experienced so much turmoil in the job market over the last few years and much of the emphasis has been on a combination of compensation and flexibility in this war for talent,” said Rebecca Toman, vice president of the survey business unit at Pearl Meyer in a news release. “However, our data indicate that companies are also increasingly reliant on job titles as an important component of their strategy.”
54% of the employers they spoke to said they are leveraging job titles to attract prospective employees.
“Where we see the most eye-popping numbers is in the significant effort to reward and retain employees through the use of titles,” said Toman. “Thirty-seven percent of respondents are actively applying titles as a way to retain key employees, which is up from 27% in 2018. Further, a third of those surveyed use titles to reward current employees and this is a 74% increase from pre-pandemic levels.”
Also, the survey uncovered that companies (13%) are explicitly job titles “when funds are limited,” per their analysis.
“Job titles can be practical tools for employers and compensation professionals, but in general, I would not rely on them as a strong retention option unless they are backed up by a pay increase,” said Susan Sandlund, managing director and leadership practice lead at Pearl Meyer. “This data may indicate some employers are recognizing that in the absence of large compensation increases, they need to offer something to key employees. I see this as a somewhat positive development in terms of recognizing there are rewards beyond pay that have meaning to individuals. However, I would counsel organizations to likewise focus on career development opportunities and keep a close eye on maintaining a positive corporate culture. These elements are proven retention tools.”