You’ve been pushing for a promotion at work for months and finally, you’re called into your manager’s office to discuss your new terms. Although you’ve been offered a minimal salary increase, you have been given a swanky job new title. You are also promised that your hard work isn’t going unrecognised.
Although a fancy title at work may be an ego boost, a new name won’t pay the bills. It also doesn’t necessarily mean you’ll be in line for more money in the future, either. In fact, new research suggests an increasing number of companies are using inflated titles to avoid paying workers what they’re really worth.
A study led by Harvard Business School found that US organisations are exploiting labour laws by assigning dubious manager titles to people who aren’t managers, in an attempt to avoid paying overtime.
Companies are using titles such as “assistant managers” and “price scanning coordinators” – to name a few – to classify hourly workers as supervisors and avoid paying an estimated $4bn a year.
Although the trend is most common in retail, food service and hospitality, organisations in all sectors are handing out made-up titles to people.
Lauren Cohen, a professor of business administration at HBS, said: “We see it happening at big firms and small firms. It happens across industries. I can see it happening at the Gap (GPS) and Pizza Hut, but we also see it happening at Facebook (META), JPMorgan (JPM), and health care firms.”
This is no new phenomenon. When companies can’t afford to hire the level of experience they want, they often turn to title inflation to make jobs seem more tempting to prospective employees. Additionally, businesses may use senior-sounding names to retain current staff members without increasing their pay.
In some cases, a great title may be enough for someone to join a company or keep an employee happy. A good job title may show how you’ve progressed in a company and look good on your CV.
One study found that 70% of respondents would take a better job title over more money. However, there may be long-term problems – including when looking for a new job.
Research suggests inflated titles may negatively impact someone’s hireability. According to a survey of more than 700 employees and 300 hiring managers, one in three employees have had job titles that overstate their skills. Of those polled, nearly half of hiring managers (48%) said job titles are less reliable indicators of skills than they used to be.
In fact, 40% of managers said they’ve had trouble finding the right person for an open role because candidates’ past titles are confusing or overstated. Overall, only a third of recruiters said they really considered previous job titles when selecting potential hires.
Additionally, employees agree that names aren’t reliable sources of information about people in the workplace. Nearly half (46%) of employees said job titles don’t reveal much about how senior someone is.
Offering people name changes with no other compensation may also be an attempt to cover-up structural issues within an organisation. With increasing pressure to show progress on diversity commitments, handing out title changes without actually increasing salaries may be a quick fix. Effectively, a company may appear to have more women or people of colour in leadership in name only.
Finally, a title change may well be an attempt to avoid paying you what you’re really worth. A promotion in name only may mean you take on more responsibilities and a heavier workload with no compensation. You may end up working longer hours, increasing the likelihood of stress, burnout and other problems. Over time, the novelty of a senior title may well wear off – and you’ll be left feeling dissatisfied.
So rather than a recognition of your hard work and contributions, being given a better title may be a way of squeezing more out of you for free – which is rarely worth it.
Watch: Why do we still have a gender pay gap?