Establishing job levels and titles across an organization (both early on and in growth) is essential to any talent strategy. Transparency in job levels/titles is vital to identify business needs and establish employee career paths. The goal is to ensure that job titles accurately convey employees’ roles and levels of responsibility and to communicate the potential career progression within the organization.

Clear Expectations for Employees

The absence of distinct titles by job level may result in a lack of employee clarity or understanding of their role/job level expectations. Title differentiation helps acknowledge the different expectations of an employee in their current job and respective job level compared to their next potential role.

Level criteria (or compensable factors) you can use to differentiate titles include:

• Responsibility - accountability and scope 
• Impact on the team and organization
• Work latitude - independent discretion, span of control 
• Knowledge, skills, abilities 
• Leadership responsibility
• Years of experience 

If titles are the same for two employees with different job scopes and responsibilities, this could lead to frustration due to discrepancies. For example, if they compare their pay and have the same title as a colleague, the employee getting paid less will be frustrated they are being paid less because the perception is “their role is the same.” The same is true with management and executive-level roles. Many startups use “Head of….” titles at various levels, but as companies grow, the leadership team also grows. With bigger and more complex organizations, there is more need for clarity and transparency around expectations by management level (e.g., Directors vs. VPs vs. CXOs).

Why creating clarity in job titles and levels matters

1. Titles and job levels help managers establish and communicate clarity on their workforce needs, planning, and whether or not an employee is ready for promotion.
2. When job title and leveling structure are not in place, it can be challenging to price jobs against the market, which can impact attracting and retaining talent (e.g., competitive offers and pay).

Having aligned and clear job titles provide a foundation for managers across the organization to set consistent expectations as they have compensation conversations with their employees. 

Clear titles are needed for managers and recruiters to attract the right talent (i.e., based on level of experience and skill sets) and provide fair pay.