The previous post we focused on the issue of job title inflation and the impact on companies’ talent management practices. However, there are greater implications for the way companies themselves are structured that will significantly shape the workplace of the future.

Job title inflation is symptomatic of two significant shifts in the workforce. One is a generational shift in attitudes towards a greater sense of self-worth, referred to as the “me” generation. This is reflected in the belief that work must mean something and they need to understand their impact and role in that work. Identity becomes as valued as substance, thus the title means more value, regardless of the actual content of the role.

The second major shift is the increasing pressure on companies to perform given reduced resources. The competitive and market pressures are compounded further by globalization and increasingly knowledgeable workforces in developing countries. Companies have done as much as can be expected from more efficient use of capital, technology and process improvements, and outsourcing. Beyond faster innovation cycles, companies now must contend with how to gain greater productivity in their workforce.

Job title inflation has obscured this pressure on filling the human capital need. What we are actually seeing is the dissolution of the traditional corporate hierarchy based on formalistic 19^th century military structures. Companies need more talent requiring more specialization to effectively compete; job title inflation is merely the symptom of a trend in companies acquiring the skills to meet their objectives. In this context, the future organization is in reality a highly networked and efficient entity of skills that are used, traded or evolved as needed between workers.

This evolution of skills will continue in faster cycles with the increasing speed of change in markets. However, job titles are not equivalent to a set of requisite skills for a position, especially with job title inflation. To prepare, companies must begin to catalogue and manage skills across the workforce and measure against the need of the organization in real-time. Therefore, true competitive advantage becomes human capital and the effectiveness of organizations to manage and leverage skills.