May 14 2007

Is title inflation an acceptable recruiting/retention technique?

I’ve had a few people ask me about this recently and it felt “blog worthy”. At issue is the question of whether it’s ok to use title as an incentive to either keep someone at a company or attract them there in the first place . . . is playing to someone’s ego an acceptable employment practice?

I know some people who get really bent out of shape about this stuff, but my view is that using title as part of a ‘comp package’ is ok –in certain circumstances and with a full understanding of the potential pitfalls. Most importantly, this can only be used in “bubble cases” where someone is truly on the line between senior manager/director or senior director and vp (the most common case in my experience where this becomes an issue – getting a vp title is seen as a big step). Promoting someone too early or hiring someone in at an inflated level where they are clearly not up to the standards of the rest of the team at that title grade is a mistake – people see through it and it causes an internal mess. Along those lines, titles like CFO, COO and President are not to be thrown around lightly – it sends a very specific message to an organization, investors, clients, etc – and a decision to hire at this level (vs. a VP of Finance or VP of Operations, etc.) is too important to play around with. That said, bringing someone in as your “VP” of Engineering when they are on the bubble of accepting an offer and where the issue is your desire to call them the “Senior Director” of Engineering shouldn’t cause you any heartburn. And while your first move should probably be to convince someone to take the tile you think is fair and review and promote them later (I’ve had great success with this in many of the companies I work with), when title becomes a real issue in a comp negotiation I think it’s ok to use it to your advantage.

While we all want to think that it’s the work, the environment and the “opportunity” that attracts people to move from one company to the next, the reality is that many execs are looking for some upward mobility and providing that for them can be the difference between making a great hire and spending the next 2 months trying to find another candidate to fill the job.