Employers using job titles to navigate labour troubles

However, expert says 'somewhat positive development' should be backed up with pay increase

Employers using job titles to navigate labour troubles

Employers are no longer just relying on compensation and flexibility to address workforce challenges - they're using job titles too. Findings from a Pearl Meyer's survey registered a surge of employers using job titles to retain, attract, and reward employees.

In surveying more than 400 organizations, it found that 54% are using job titles to attract prospective employees — up by 35% since 2018. The number of employees using job titles to determine eligibility for some compensation programmes also increased from 30% to 38%, according to the report.

"Where we see the most eye-popping numbers is in the significant effort to reward and retain employees through the use of titles," said Rebecca Toman, vice president of the survey business unit at Pearl Meyer, in a media release.

According to Toman, 37% of respondents are "actively applying" titles to retain key employees, up from 27% in 2018. There’s also a 74% increase in the number of employers using titles to reward staff, from 19% in 2018 to 33% in 2023, the report revealed.

Pearl Meyer's data indicate that companies are "increasingly reliant" on job titles as an important component in their strategies amid a heated war for talent, according to Toman. The situation may stem from employers wanting to reward key employees in the absence of large compensation increases, said Susan Sandlund, managing director and leadership practice lead at Pearl Meyer.

While this is a "somewhat positive development,” Sandlund said this is not something that employers should depend on.

"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," she said.

"I would counsel organisations to likewise focus on career development opportunities and keep a close eye on maintaining a positive corporate culture. These elements are proven retention tools."

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