Photo by Tima Miroshnichenko: https://www.pexels.com/photo/a-woman-interviewing-a-man-5336958/
In the news recently have been several articles concerning what I consider to be a phantom employment problem; namely, the issue of job “over-qualification,” as in an employer has placed you in a job or is considering hiring you for a job for which you applied, that doesn’t require your high educational accomplishments or extensive prior employment experience. Thus, you’re overqualified for the job. Or, to put it another way, you’re doing work that doesn’t pay you what you’re worth. The implication, too, is that your employer has conspired with other employers to see to it that highly qualified applicants or employees such as you remain underpaid so they can maximize their profits.
If you are one of those affected by “over-qualification,” this can be a persuasive theory. The problem is, in my experience, the theory has no basis in reality. Here’s why: employers don’t pay for the person; they pay for the job. True, employers do make adjustments for different individual performances, but it’s always within the job category. There are two primary reasons for this.
One is that if pay and benefits were based on an individual’s intrinsic value, their “qualifications” only, an employer would have an impossible time establishing a fair and equitable compensation system within the organization. How should someone with a Master’s degree in political science, for instance, be compensated relative to someone with a high school diploma if they’re both salespeople and produce the same volume of sales each year?
The other reason is that businesses operate within a highly competitive global marketplace. If employers compensate employees, disregarding the effect it has on the price of the firm’s product or service; the business is doomed to failure. Then no one has a job.
Here’s the thing – employment is a market, just like products and services. The law of demand and supply reign, so sometimes the employer has the power to keep wages low because of high supply, and sometimes employees or prospective employees are in the driver’s seat because of low supply. At least in market-driven countries, employees are free agents, free to seek out the employment opportunity that best suits their needs and desires.
Just as consumers may choose to pay a higher price for a better product or service or pay less to get less, employers find themselves in the same boat. Employers must compete for employees just as they must compete for customers. If employers compensate too highly, their firms will be uncompetitive, and if compensation is too low, they will not be able to attract and keep qualified employees. Either way, the business loses.
According to Rocky Scott, [the former] Executive Director of Colorado Springs Economic Development Corporation, Colorado workers have the highest average educational level of all 50 states. He also estimates that there are lots of people in our city working in jobs they would not take in another state. “If that’s true,” I asked him, “Then why don’t those “overqualified” individuals seek work elsewhere?” “The Peak Syndrome,” he answered. “People love the weather, the mountains, the size of the city, the outdoor lifestyle here, and they’re willing to sacrifice to live here.” Apparently, Colorado Springs appeals to work-experienced, well-educated people, and it is because of this labor pool profile that employers have such highly qualified individuals filling their employee ranks. There is no plot, and there is no ethical breach.
In my experience, there is no such thing as being “overqualified” from a practical standpoint. As a manager, I expressed this view to our office supervisors when they would ask for my opinion about various applicants they were considering hiring. This or that applicant is fantastic but overqualified, they would say, and they worried that if they hired the person and expended the time, money, and effort in their training, the prospective employee would be a short-timer and take the first upgrade employment opportunity that presented itself. “So, what you’re saying,” I’d ask, “is you’d rather not have an overqualified person in the job and avoid the risk they might be with us only a short time, and prefer instead to have someone who is average but could be with us forever?”
It’s not hard to see the point. Our supervisors’ concern about high turnover was certainly legitimate, so we used an approach that reduced the risk of hiring highly qualified personnel. Our supervisors would truthfully tell the applicant that we were excited about the prospect of having them work for us but also that we were concerned about the likelihood of their leaving our employment prematurely. Usually, the applicant would try to allay our fears, so we would ask for a non-binding verbal commitment that they agree to stay with us for at least two years. Almost always, we got the commitment, and only rarely was it broken, and then for legitimate reasons such as an unexpected move to another city or an unanticipated employment opportunity in their field of study.
So, what do you think? Should employers be ashamed of hiring “overqualified” workers, or should they hire and compensate according to what they can afford for the jobs their businesses have to offer?
Tuck Aikin was a former SCORE colleague of mine for many years until his retirement. Tuck is a prolific writer and wrote small business-themed articles for the Colorado Springs Gazette for many years. As a co-mentor, Tuck was my inspiration for me starting this blog. The preceding post is reproduced with permission from the author.
