I’ve worked with many business owners that really couldn’t care less about the titles they give their employees. I can totally understand this sentiment from an entrepreneur’s perspective, what difference does a title make? The only thing that matters is what you can do, not what you’re called. For a long time I shared this sentiment, but over time I’ve become convinced that titles are actually very important and should not be taken lightly. I’ve summarized the three main reasons I’ve changed my mind below.
The title will affect how they are perceived by others. Nothing will frustrate your employee more than asking them to take on a task that assumes a level of authority that their title doesn’t suggest. Trust me, I know from experience. If you want coworkers and outside vendors to take another employee’s instructions seriously you need to indicate this very clearly. It’s already hard enough for someone that was initially a peer and has been promoted to a higher level, but not making it abundantly clear will be a huge impediment to the employee’s ability to perform their tasks. Don’t set them up to fail.
The employee will identify with it more than you think. Sometimes, especially in small businesses, official, and sometimes grandiose sounding titles will be given out specifically so that external businesses are given the appearance that you are larger than you are. I’ve even seen this done while telling the employee specifically that this title is not a true reflection of their responsibilities, but rather just a “show title”. Every single time I’ve seen this though, the employee has ultimately felt entitled to that specific title and the role that comes along with it. This is always surprising at the time, but think about it, imagine telling your friends, family, and acquaintances what you do for a living for a year or two and not use the title to explain it. You’d end up believing the title over your boss in no time, especially when the title paints a prettier picture.
Along those same lines, you need make sure the title accurately reflects the actual tasks required to do the job. If the title doesn’t align it’s going to be hard for the person to be sure of expectations, even if you communicate them regularly. I even go as far as having double titles if someone has two very different roles now.
The employee will get offers in the title’s pay range. This is relevant if you’ve promoted an employee from a lower level and maybe you aren’t paying them the salary of someone that already has lot of experience in that role. After some time they may get recruited away at a salary that you simply can’t match simply due to their title and the amount of time they held it. This is not to say you should artificially keep the titles lower than appropriate, but you shouldn’t give people titles that indicate that they have more responsibility than they actually do, unless you want them to use that as a stepping stone into a higher paying gig.
So if you were one of the people that believed that titles weren’t important, I hope I’ve convinced you to reconsider. Does anyone have any additional arguments for why they are or aren’t? Share them in the comments!