Hiring a new employee can be an overwhelming process, which requires several critical tasks and decisions. This includes defining the necessary roles and responsibilities of your new staff member, writing a clear and accurate job description, and building a competitive compensation package. One decision you mistakenly might not put much thought into is determining the employee’s job title.
Although some people may tell you that job titles don’t matter – particularly at a startup – they do. If you’re in the process of staffing your business or managing your startup’s organizational structure, read on to learn why job titles matter and how to select them effectively.
Choosing the right job title can be tricky, especially when determining the title for a position that encompasses multiple roles and responsibilities. However, every employer should take the time to develop a thoughtful strategy for naming positions and assigning titles, regardless of the company’s size.
Here are a few points to consider when trying to select accurate job titles that incorporate the many hats worn by your employees.
Although every business uses titles in distinct ways to meet unique needs, it’s essential to develop a system for generating titles early on in your organization’s life span. Being consistent with the way titles are formed and offered helps avoid confusion and disparities, especially among employees who hold multiple roles and those who may have similar responsibilities but end up with different titles.
Marielle Smith, vice president of people at Narvar, said she advises asking these questions when developing job titles:
By honestly answering these questions, business leaders can create a framework for titles that is both uniform and responsive to the specific needs of their organization while also keeping employees’ career development as a central focus. [Learn more about creating a successful hiring process.]
When employees have multiple responsibilities in an organization, but the majority of their day-to-day functions fall within one particular department, it makes sense to link their title to that specific area of the business. Stephanie Troiano, an executive recruiter at Wimbush & Associates Inc., recommends employers start with understanding the most critical aspects of their staff’s position.
“Think … first in general terms in order to come up with an umbrella title or department that they can fall into,” Troiano advised. “The idea is to try and categorize their duties and position broadly, then narrow down from there.”
When struggling to find the perfect title for the employee who does it all, businesses can take the pressure off by realizing that the decision doesn’t have to be solely their own. Companies can empower staff to select their own job titles. After workers have been in a role for a trial period and know what the position involves, you can encourage them to name their own job within agreed-upon parameters.
“We have found great success in letting our employees figure out what kind of job title they would like to have and present us with their name choice and reasoning behind it,” said Deborah Sweeney, CEO of MyCorporation.com. “Then, we decide if it is a fit for them or not.”
Having a say in their job title can give your employee a sense of autonomy and validation, and make them feel they are part of a forward-thinking company that matches their values.
When an employee does it all, it may be tempting to come up with a fun and whimsical title that encompasses the spirit, if not the content, of their job. While there is a time and place for unique and creative titles – Disney employs “imagineers,” and VaynerMedia has a chief heart officer – it’s important to consider how these titles will be perceived outside the company and translate to other workplaces.
A unique title that’s empowering within one organization may seem vague or unclear to clients, recruiters, job seekers and other firms. An unclear title can ultimately be a hindrance to that employee and your business. For example, calling someone a “crisis ninja” or “in-house philosopher” raises questions rather than provides answers about what the titleholder actually does.
Companies must also consider whether the titles they create will reflect well on the business now and in the future, added Smith. For instance, consider what the next job title will be as your staff is promoted. “As the company matures, they will want to attract top talent, and senior talent often want titles that reflect their hierarchy within the company, or they’ll find the title and position they want somewhere else,” Smith said.
One way to have both creative and practical job titles is to create imaginative, inspirational titles to use internally, but opt for more traditional titles when dealing with outside entities.
All of your employees are critical, especially if you’re a small operation, and you want their titles to carry the weight of their value. But it’s a poor business decision to have five vice presidents in a company of six people just so everyone feels good. Consequently, companies should steer clear of title inflation, even when trying to recognize the multidimensional roles of staff.
Though it’s cheaper to hand out fancy titles than to give out raises, there are often unintended consequences when titles are doled out with ease. Title inflation can lead to tension among colleagues and employees who suddenly feel that their old responsibilities are beneath their new titles. Often the best policy is to keep it simple and pass over the impressive-sounding titles in favor of logical ones that speak directly to the needs and goals of your organization.
In a traditional organization, you can expect to see a hierarchy of employees working in executive roles, middle and first-level management, and intermediate and entry-level roles. Depending on your company’s needs, you may even have a board of directors.
The highest level of the organizational hierarchy – excluding a board of directors – is the chief suite, also known as the C-suite. These employees are senior executives responsible for big-picture thinking. Common C-level job titles can include chief executive officer (CEO), chief operating officer (COO), chief financial officer (CFO), chief marketing officer (CMO), chief product officer (CPO) and chief information officer (CIO).
The following level in the chain of command includes the organization’s vice presidents (VP) and directors. These employees are considered middle management who often lead an entire department. To create a title at this level, you can pair the term “vice president” or “director” with the name of the employee’s department. For example, VP of production, VP of operations, director of marketing or sales director.
Below the VPs and directors are managers and supervisors. These employees are considered first-level management. While managers may oversee some employees or a sub-department, they are typically responsible for day-to-day operations too. Common manager titles you can expect to see at a startup include: product manager, sales manager, business development manager, digital marketing manager, project manager, social media manager and design manager. [Read related article: How to Improve Relations Between Your Managers and Employees]
Individual contributors can consist of entry-level, intermediate and experienced staff. These employees are responsible for taking on day-to-day projects and assignments. As the title indicates, individual contributors do just that – contribute to the success of the organization through their individual work. They do not typically manage other people.
In their simplest form, job titles define employee roles; but, according to our research, they do much more than that. The right job title – whether it’s impressive, inspirational, powerful or just plain fun – can benefit both your business and the employee you’re looking to hire.
Job titles have become incredibly important to employees. On the worker’s end, a good job title can help them feel motivated to reach the potential of that title, prove their importance to the outside world, achieve higher wages and compensation, and maintain higher job satisfaction. The position at the next level will also give your staff clear goals to work toward.
What does that mean for your startup? The right job title can help you attract the right employee for the role, influence exceptional employee behavior, prevent employee burnout, improve employee satisfaction and commitment, create a clear organizational structure and reduce employee turnover. Keep in mind, employee job titles are not a one-and-done deal. As your company grows and each employee grows within your organization, you should look to create a clear career path for each staff member with new job titles along the way.
Source interviews were conducted for a previous version of this article.