Cos try fancy titles to retain talents

MUMBAI: This is the kind of inflation that HR honchos refrain from talking about. Distinct from “wage inflation”, which cause salaries to spiral up, Corporate India is grappling with “title inflation” — a new term coined to capture the flood of fancy designations.

To an employee the new designation is a notional gain in the form of a greater recognition. HR departments are getting creative with titles like Director People Enhancement, Head Demand Fulfilment, Chief People Officer, Chief Knowledge Officer and Head Operational Excellence, Senior Director, Associate Director and Senior Assistant Director, among others.

“Companies and individuals want to differentiate and position themselves. Buckets of fancy designations have been created for the same hierarchical level,” says Hari T, senior vice-president-HR, Satyam Computer.

There are two reasons why this is happening. First, for MNC employees interfacing with the outsiders like clients, governments or industry association, fancy designations help open doors and carry greater weight, according to Gautam Sinha at TVA Infotech, a Bangalore-based recruitment firm.

Second, it helps retention at middle level. “Title inflation is a reality and I can’t officially admit it, but to retain talent we are trying to change the titles to better sounding ones,” says an HR head with an Indian company. Agrees Nimit Parekh of HR firm 3P Consulting: “At a time when employee retention is becoming critical, attrition is rising and organisations are getting flatter, creating new designations might just be a good way of keeping employees happy.” Companies keen to retain talent but are unable to change job profiles or increase the existing roles of performers are resorting to title inflation.

“In a number of companies, particularly in traditional business houses, the top-rung is full of older employees. But the growth, ideas and energy will flow from the younger lot. Since these employees hit the ceiling very fast in their hierarchies, the HR is left with no option but to upgrade the designation, instead of the role,” feels Vikram Bhardwaj of the search firm, Redileon. Besides, the performers are also looking at career growths rather than just the salary growth.

While most companies in India prefer title inflation as a retention tool, some companies are using it to attract talent. Says Mr Parekh, “It works in the case of a prospective candidate joining a company and/or using it to appraise and promote existing employees. It’s just to keep people happy... it works for some time.”

There are others who believe title inflation hardly works for retention or attracting new employees. “It’s an empty promise, both for current and future employees. The risk of a possible backlash in the long term, is more than the benefits it generates in the short term,” says Sandeep Surana from search firm Executive Access.

“Companies that believe in false promises and notional gains for its employees do not generate loyalty or emotional attachment. The disenchantment can build up over a period of time and can lead to massive attrition,“ says Mr Surana.
Satyam has actually realised the problem that title inflation causes.

The company has around 15 hierarchies and more than 25 designations. “We have realised that it does not make sense to have so many hierarchies and designations. We are collapsing the hierarchies in 5-6 levels and reducing the designation to around 10-14,” says Mr Hari. Satyam has taken up title deflation to ensure that employees and customers can relate to the role assigned to a designation. The ego-boost from a title inflation does not last for “more than a month”. Once the reality strikes, it creates some dissonance, feels Mr Hari.