Job titles increasingly used for retention purposes

According to a recent survey by Pearl Meyer, employers are now relying on job titles in addition to compensation and flexibility to address workforce challenges. The survey found that 54% of the more than 400 organizations surveyed are using job titles to attract prospective employees, an increase of 35% since 2018. Additionally, the number of employers using job titles to determine eligibility for some compensation programs increased from 30% to 38%.

The use of job titles to retain key employees has also seen a significant increase, with 37% of respondents actively applying titles for this purpose, up from 27% in 2018. The survey also revealed a 74% increase in the number of employers using titles to reward staff, from 19% in 2018 to 33% in 2023.

The report suggests that companies are “increasingly reliant” on job titles as an important component of their strategies amid a heated war for talent. However, while this may be a “somewhat positive development,” employers should not solely depend on job titles as a strong retention option unless they are backed up by a pay increase.

Susan Sandlund, managing director and leadership practice lead at Pearl Meyer, advised organizations to focus on career development opportunities and maintaining a positive corporate culture, which are proven retention tools. Despite the increase in the use of job titles, they should only be viewed as practical tools for employers and compensation professionals.