What Is Job Title Fraud?

Do any of these situations sound familiar?

• You aspired to a job title because it enhanced your status and strengthened your resume.
• You received a promotion with a big title, but your job didn’t change.
• You have, at some point, compared the job titles of your peers.
• You’ve wondered if a coworker’s job title was an accurate representation of their job.

If you answered yes to any of these questions, you may be a participant in—or victim of—job title fraud.

What is job title fraud?

Job title fraud, also known as job title misrepresentation, is a misalignment of the scope and duties of a job with a job title in order to attract and retain employees.

Most company leaders don’t understand the consequences of job title fraud, or the fact that it negatively affects the organization and future employees. Especially with its connection to pay transparency and equity, job title fraud is a global phenomenon that’s becoming more recognizable, creating a bit of a buzz in organizations worldwide.

Why is misrepresenting job titles considered fraud?

Some may think that classifying the practice of job title misalignment as fraud is hyperbole, but let’s break apart the definition of “fraud ” more closely.

Merriam-Webster defines fraud as “an act of deceiving or misrepresenting.”

In our case, an example would be an employee who requests an inflated title to beef up their resume or align with a higher level of peers.

Other definitions of fraud include the following:

• An intentional perversion of truth to obtain some valuable thing or promise from another. Example: A manager giving an employee a promotion with an inflated title to prevent them from leaving.
• Constructive fraud is an act, statement, or omission that operates as a fraud, although perhaps not intended to be such. This is an apt description of most managers’ views of the practice in that giving an inflated title seems harmless—and even like a win-win for both the employee and the business.

Job title fraud stems from the requirement for a robust job infrastructure and internal governance. Organizational leadership teams needed to understand the compensation structure and implications of decisions made throughout the company. But instead of partnering with HR, they make isolated business decisions about promotions and new hires. This happens even more frequently during acquisitions and reorganizations, when there’s usually no consideration for the mapping of jobs to people.

Who is hurt by this practice?

Job title fraud causes a seismic shift in how your company classifies and pays employees, and damages both the long-term health of your organization as well as individual employees.

To illustrate, let’s look at a typical director role and the job descriptions of two employees who have the director title:

Job Title Fraud In The Case Of Employee A

In this case, the employee experiences a short-term win.

In this situation, the employee perceives their job to be at a higher level than their peers. Subsequently, employees with lesser titles compare their roles and explain to their managers why they also should have the director title. The manager often agrees in order to avoid disruption, and determines the employees’ points of view are valid.

As a result, another inflated title is introduced, and the cycle continues indefinitely. Moreover, a director shouldn’t report to another director; the “department director,” in this case, becomes a senior director without a change in their job responsibilities.

Job Title Fraud In The Case Of Employee B

This is the most overlooked and critical injustice of job title fraud. It is a rightly classified title. This person is actually doing right-sized responsibilities within a realistic scope, but the other “director” role diminishes the use of this title.

Here, the employee meets all the requirements and responsibilities of their job title. They assess their work in relation to colleagues who hold the same title, like Director Team, and conclude they should hold a higher title than their peers with inflated titles. Herein lies the dilemma: What title should they receive? It would inevitably be another inflated one. The “Director Business Segment B” has now hopped on the title merry-go-round—where will the next title land?

Common Titles Within The Job Title Fraud Spectrum

The following are examples of other types of job title fraud or misalignment in the organization:

• This title is frequently used for jobs that don’t require an engineering degree or even a professional engineering certification.
• Problem: To use the title “engineer” without requiring the credentials affiliated with the designation diminishes the work and knowledge of those jobs that do require educational expertise.
• Better alternative: Technician

• This title is increasingly seen in tactical, routine jobs where data is simply compared, transferred, or put into another product to complete a task.
• Problem: This title should be reserved for jobs where the primary responsibility is to gather, study, and report on data and trends. A true analyst role is often classified as an exempt administrative position due to the expertise, critical thinking, and dependence on concussions and recommendations required.
• Better alternatives: Coordinator, assistant, clerk, specialist

• The title “manager” is frequently misused for positions that require little or no management of anything or anyone.
• Problem: Historically, this title was primarily associated with individuals responsible for overseeing employees, which encompassed hirings, terminations, and performance reviews. Over time, “manager” evolved to include individual contributor roles due to the absence of a hierarchy to advance talent. In pursuit of higher earnings, many sought a place on the management ladder (or were given the title as a form of recognition). Consequently, workarounds were implemented within HRIS and other processes to accommodate or exclude individuals based on their roles. This band-aid solution didn’t address the underlying proproblem of valuing and elevating the individual contributor role. As a result, the term “manager” became overused for non-people-leaders, and people managers had to adopt different titles for their roles.
• Better alternatives: Advisor, developer, designer, scientist, strategist, expert, coordinator

• The director title is used to level-up a job that is viewed as part of upper management.
• Problem: As the “manager” title became overused and “senior manager” seemingly disappeared, the “director” title became the new norm for any job perceived as greater than a “manager.” However, look at a director’s core responsibilities: long-term planning, creating a business strategy, and executing the plan through other leaders. With a properly vetted job hierarchy, the “directors” of today could very well be managers or senior managers tomorrow.
• Better alternatives: Principal, senior staff, esteemed director (at the end, e.g., “something” director)

Why Your Company Should Care About Job Title Fraud

It is just a title, right? Well, not really.

Companies commonly provide two titles: one for external purposes (business) and one for internal accuracy (true). This is precisely when factors like pay transparency and equity in compensation become relevant—nearly every organization has some degree of title confusion.

The use of multiple titles can be confusing to employees and leaders. From a pay transparency perspective it’s important that employees and leaders alike, understand which is used to establish a pay range for their job. To gauge whether your titles are accurate and clear, ask:

• Have you ever audited the use of titles internally?
• Do organization charts or company directories present external or internal titles?
• Are leaders aware of the titles employees use?

If you discover title fraud, you’re often faced with two options:

1. Assume ownership and tackle the job title fraud issue head-on, or
2. Ignore it and hope it magically resolves itself.

Unfortunately, there is no magic wand—so option two isn’t recommended. But it is possible to correct job title fraud.

How To Address Job Title Fraud

Now that you’re aware of the problem, take the opportunity to rectify past mistakes, display vulnerability, foster engagement with employees, and rebuild your employees’ trust. I suggest implementing a governance process, which will mitigate the impact of this risky practice and enhance leadership’s decision-making process so it is more well-informed.

Once you’ve implemented a governance process, you can begin cultivating a culture of transparency. This means reviewing and updating other functions, including your talent management, performance, and employee engagement systems.

Taking proactive steps to correct job title fraud and promote pay transparency and equity leads to greater employee satisfaction and retention. Not sure where to start? Contact us today. Our team at MorganHR will help you address and fix job title fraud by providing a sound job hierarchy and implementing a change management strategy to address the issue.