Many of you will recognize this video clip from the classic comedy Cheers where Woody, intending to ask for a raise, gets tricked into accepting (actually demanding) a job title instead.
So, do job titles matter? Under what circumstances would a sane person accept a title in lieu of a raise? You might be surprised…
Early in my career, I was working for a company that was facing bankruptcy. I knew there was no money for raises, so instead I asked to be named CFO. Due to its financial distress, I saw that my days with the company were numbered. I realized that having “CFO” on my resume would make me more marketable when it came time to find my next position, so I gladly accepted the title.
In a sense, job titles are currency within (and outside of) an organization. Your title may not completely capture the work you do, but it can give you a certain implied authority. For instance, most bankers have the title of Vice President. Why is that? Most likely, it’s because the title of Vice President instills a certain sense of authority and confidence that clients want their banker possess.
One of the downsides of titles for the company is that they can’t be taken back easily. While employees will likely understand the necessity for a pay cut in tough times, taking away a title isn’t as understandable or easy to do. For example, we had a client who was looking to grow their accounting staff. They had an employee who had been given the title of CFO, but was really functioning as a Controller. This employee was very good at their job, but wasn’t really what the company needed in a CFO as it was growing. The quandary they faced is how to bring in the person they need, but not step on the toes of the loyal employee they wanted to keep.
The downside of titles for the employee is that they can be limiting. Many CFOs these days are seeing themselves working more and more in operations, particularly as organizations get flatter. Should these CFOs want to make the transition over to operations, they could face issues that “they need to stay in finance where they belong”. Not having a title can be freeing as it can allow you to use your talents in the company where they fit best, not where they’re expected.
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