Whither Titlelage?
To visibly title your employees or not — that is the question.
I've been in both small and large companies with public job titles. People have strong opinions when discussing the merits of titles, but much of the discussion lacks nuance. In my experience, there’s not a definite better or worse approach. The real trouble is that many leaders default to one or the other without fully considering the tradeoffs.
Why Titles Exist
Most of us are so used to job titles in companies that we don’t even think about why they exist. Or we assume one reason where there could actually be several.
Employee-Directed Reasons
Sometimes the benefit is to the employee themselves, since visible titles:
Reward achievements. Titles proxy for compensation in companies that can’t afford to give monetary raises because a change in title feels like a promotion to many people. You’ll find this in the nonprofit space and in many startups.
Define expected work. This is especially common in the class of jobs where people often tell their boss what’s in (or more often, not in) their job description. Titles in these sorts of companies are akin to a form of communication from management about the tasks employees are expected to perform.
Recruit into less-attractive companies. Often when a startup can’t offer competitive compensation or compelling work, they’ll offer inflated titles. This appeals to a certain type of person who’s happy to go from “Senior Engineer” at a Mag-7 company to a “VP of Engineering” in a 4-person company. This same sort of person thinks it’s effective to later interview at a Mag-7 company with the affronted declaration, “But I was a VP of Engineering at Hooli!”
Company-Directed Reasons
There’s also a benefit to others in the company for having visible titles because they:
Motivate desired behaviors. Title changes are obvious when visible. This communicates to the rest of the company which behaviors managers value.
Provide public recognition. For many employees, public recognition is more motivating than money or other rewards.
Facilitate collaboration in large companies. Sometimes a title isn’t meant primarily to tell Jimmy about his job, but to communicate to other employees what Jimmy does. You’ll especially find this becomes necessary in large companies where most people don’t know each other. Titles become a way to quickly divide work in ad-hoc collaborations amongst relative strangers. It’s like saying you’re an Elf: everybody would expect you to shoot arrows and eat lembas bread.
Externally-Directed Reasons
Sometimes titles smooth interactions with people outside the company by:
Clarifying authority or agency. It’s one thing to get an email from a “Senior Engineer” who wants to negotiate a free trial of your software for her 300-person company. It’s another to get the same email from the “VP of Engineering.” Titles imply to the public which decisions can and can’t be made unilaterally by that employee.
Sating the outsider’s ego. The most junior outward-facing sales title at many banks is famously “Vice President.” This ensures Uncle Bojangles, made newly wealthy from backyard fracking, doesn’t get offended when the bank sends merely a “Senior Sales Associate” to talk with him. He’s meeting with a VP! In many software companies, the same title in sales is actually a lower level than the equivalent title in engineering to make sales clients feel more important. This is the very reason Microsoft has both Vice Presidents and Corporate Vice Presidents (the latter of which is a “real” VP; the difference of which only those within Microsoft know).
Drawbacks
If having visible titles was purely positive, there would be no debate at all. Yet the debate rages because there are downsides, many of which I’ve experienced directly.
First, titles create one more domain in which a scarce resource can get competed. You’d ideally want 100% of employee energy directed at building great products customers love, but now 5% of energy is spent on whispering complaints to other employees about why Svetlana is now a Principal. And let’s face it, for a small set of employees, it’s more like 40%.
Fireside True Story™ Time: I founded a small nonprofit that builds free software for global health. My intention was to not have visible titles so everyone could focus on the work itself. Also, many of the benefits of titles aren’t as salient in a tiny company. But I made a mistake in our payroll system, Justworks, of providing a title when it asked for one, not realizing it would publish that title for all other employees to see when accessing payroll information.
It took me a few months to figure out why there was sudden interest from several employees to discuss “getting to the next level,” exactly the energy I had hoped wouldn’t be expended on the topic.
Second, like salary expectations, most people expect — in my opinion, unreasonably — their titles to move monotonically upward. This is how a place like Microsoft eventually created:
“Distinguished Engineer.” I was there when this happened about 25 years into the company’s history.
“Senior Vice President.” There’s gotta be a place for mere “Corporate Vice Presidents” to go. 25 years ago, Microsoft already had over 600 CVPs.
“Executive Vice President.” Same deal. There became too many “Senior Vice Presidents.”
“President.” At some point you’re forced to drop vices. I was also at the company when the creation of this title happened perhaps 30 years into its history.
I’ll be the first to call it: Microsoft will soon have a “Senior President,” followed in a few years by the announcement of “Executive President.” (Actually, the joke’s on me. I just checked, and Microsoft now has a “Vice Chairman.” Looks like we skipped the obvious interim steps and went straight to the top.)
Lastly, in companies I’ve worked where titles were introduced, communication can become distorted in undesirable ways. There’s a famous warning against using the HiPPO (Highest Paid Person’s Opinion) decision-making method, where people suppress their opinions until after the most senior person speaks. I’ve also found in large companies like Microsoft that many employees choose whether to respond to emails based on the author’s title. This may not always be a bad thing — after all, going title-less in a large company may feel like going rudderless (e.g. holocracies); people need a way to triage the opinions of strangers, where titles can be a reasonable proxy if the company consistently enforces discipline around title inflation.
Should You Have Titles?
There’s no definitive answer, but the tradeoffs above at least clarify the debate. In general, titles are almost a necessity in large companies due to internal collaboration reasons alone. It’s likely for this reason you often hear of companies introducing visible titles after not having them for years, because growth often necessitates them.
But I will say some of the best times I’ve had were in companies without titles for much of engineering. When I worked at Meta, everyone was a “Software Engineer.” At OpenAI, everyone was a “Member of Technical Staff.” Granted, both companies were several hundred people when I joined them — small enough to not “need” titles — but they lasted without more granular titles well into the thousands of engineers (and in Meta’s case, tens of thousands).
I enjoy working in title-free environments because no energy is spent on a sort of positional good. I enjoy those environments because ideas stand on their own.
In fact, someone joined the early Meta Seattle office, when there were only a dozen engineers, and quit within three months to return to Microsoft because he “couldn’t get anything done at Facebook” since people didn’t respond to the ideas he emailed. He told me that at Microsoft, he always got a response because he was a “Principal Architect.” I didn’t have the heart to tell him that maybe his ideas weren’t that good after all, if lack of a title made him so ineffective.
But I now realize that was a flippant oversimplification on my part. There are many reasons why titles are useful, and perhaps even necessary, depending on a company’s situation and what it values. I’ve just personally enjoyed working without titles more.