Why do companies not want to hire over qualified people?

Question

I've heard stories of how people looking for jobs have been turned down by companies because they are over-qualified, even when they are willing to take a (sometime substantial) pay-cut.

Why do companies not want to hire people who are over-qualified for the job? Wouldn't it make sense for a company to hire someone especially when they are over-qualified for the job (i.e. PhD for a high-school teaching job) if the person in question is willing to take a paycut/accept what the company is offering for the job?

Why do I keep hearing stories of people being rejected for jobs due to being over-qualified?

Is the phrase over-qualified simply a go-to term that companies/recruiters use to reject an applicant?

Answer 1

Generally speaking, the overqualified employee is fundamentally less likely to be happy with their position. As a consequence:

• They will likely leave at the first opportunity.
• Generally speaking, if they take the job it's because they couldn't find anything better. This can lead to a certain resentment of their situation. From the company's point of view, the best employees are the ones that feel grateful for the opportunity to work there.
• They will be more likely to get bored with the work.
• They are more likely to challenge authority.
• At some point they may change their mind about taking the pay-cut and start asking for more money.
• Some companies are suspicious of your motivations when you're aiming for a lower position. Why are you applying for this job? Are you trying to learn about the company and possibly steal trade secrets?
• (As mentioned by Ben Crowell and Vietnhi Phuvan) Many managers will feel intimidated/threatened by someone who is possibly more qualified than themselves, and will be reluctant to hire someone who might be able to take their job.

Keep in mind that hiring is a very costly and risky process for a company, especially if the new employee leaves or has to be fired, thereby starting the process all over. Costs include time spent searching through CVs, interviewing, background checks, recruitment agency fees, potential legal fees if the company has to apply for licenses or visas for the employee, overhead costs of initiating benefits, training fees, expenses for new equipment and software licenses, and possibly redundancy fees if they have to fire the employee.

That's not including the costs of potential damage to the actual work process, e.g. disruption to the projects that can occur when the new hire leaves, the opportunity cost of an unhappy employee not working very efficiently, and in the case of management positions, the damage that can arise from misleading the team and/or leaving them hanging.

So when presented with an employee that looks like a "flight risk", the company naturally starts to question whether or not it's worth the risk of them possibly leaving.

Answer 2

Having talked to a few Google employees, I can say that Google likes to hire on an overqualified basis. But that's because they see themselves as a growing company, and they like their employees to go at least one level up, before they reach their level of incompetence, as described by the Peter principle.

Most prospective employers' management are leery and probably insecure about offering positions to overqualified people.

1. One concern is that the overqualified individual may be taken the position to satisfy a short-term need for cash, and will bail out as soon as an opportunity that's more suitable to their quals pops up. Hiring people was fun the first time I did it but it did not take long for the fun to wear off and for me, to see hiring as a chore. Hiring people who will bail out in short order - that's not my idea of a good time to be had by all concerned.

2. Another concern may be intensified future salary/promotion demands from the overqualified individual.

3. A third concern may be the morale of the individual involved, who is taking a step down and comparing the other team members/management unfavorably to themselves.

4. A fourth concern is, why should a boss hire someone who could take their job?

Having said that, the list of possible concerns is by no means complete.

On a personal note, I've lost a bunch of interviews over the decades when as a result of my-take-no-prisoners attitude toward interviewing, I inadvertently crossed the line from convincing the boss that I could do the job to convincing the boss that I could take THEIR job.

That bosses don't like to hire overqualified people is only part of the story. I don't think that bosses like to hire people who are smarter than themselves or who can prove to be better managers than themselves either. I think the safest way is to gun for the position and not try to imply anything else.

Answer 3

Is the phrase over-qualified simply a go-to term that companies/recruiters use to reject an applicant?

No.

"Over-qualified" means that the experienced, perhaps well-paid, applicant is not a good fit for the specific position which happens to require less experience and offering less pay.

As a hiring manager, I want both the position and the applicant to be a great fit for each other.

In general, I want to hire someone who can grow in the position, who can be happy and enjoy themselves while contributing to the team, and who will likely be here for the long-haul. Usually that means someone who matches the position technically, and experience-wise, or can grow into that match quickly.

I have hired folks who had more experience than the position required (and were "over-qualified" in at least some aspects). In each case, they were looking to make a change in their career path for a good reason. While interviewing, I made sure they weren't just looking to "take it easy" or weren't just "willing to accept less" for a short period of time.

It's certainly possible to get hired when over-qualified. It's just important to convince the hiring manager that you won't become bored, won't suddenly start to feel underpaid, and will eagerly accept your new (lesser) position.

Answer 4

There are cases where overqualified candidates get hired, and not just because of a "lucky whim", like during the dot com bust, a guy who was making $120K at a new tech company accepted a $40K position making web pages to make ends meet. In some markets and situations, you can justify such drastic differences in salaries and responsibilities. There are project managers who want to be more hands on, so they go back to development. Otherwise, if you want someone who can do multiple things, then "overqualified" can be just what you want. Like an person who can do SQL, DBA work, and also has a good grasp on requirements.

Also, being overqualified doesn't necessarily mean you'll produce that much better results. If a position seeks an "entry level" or "mid-level" person, you're putting extra and different talents to waste by getting a sr. person to do that job, not to mention overpaying for it too.

Answer 5

You might need to probe further.

"Overqualified" is often used as a cover-up for:

• Too old

• Wanting too high salary

• Coming across as arrogant or over-confident

Answer 6

Let's face it...in this economy overqualified people aren't going to be leaving so fast. We're too old! That is the real reason we don't get hired. I have been looking for six years with a Bachelor's Degree.

I would rather hire an older person who has better work ethics - not like the candidates today - too busy on their cell phones or shopping online!

Answer 7

This is a tricky question that reveals more than one might think it does on the surface. The thing is, there is always a reason why a person is currently on the job market whether they have a ton of experience or no experience. It has to be going through the back of an employer's mind when they interview someone who is overqualified for a job, "if they are this skilled, why are they wanting to work at this position?"

A few reasons, some good, some bad:

• Maybe they're impressed by the forward momentum of your company, or have always wanted to work there, or something similar. These might seem at first glance to be the best folks to bring in, but what happens when the "honeymoon" wears off and they realize that they're sitting in a gig they're underqualified for and have to move up the ladder along with everyone else? If, as a manager, you are confident that you can find a place for this person down the road, perhaps you continue with them. Not all companies can make that distinction.
• Maybe they recently got laid off of another job and they need work. This one is tricky because, while everyone wants a job and to some extent deserves to have a job, from the employer's perspective this could mean that they're paying you just long enough to train you and watch you walk off somewhere else once the market loosens up or something about your skillset makes you super employable again (sometimes software doesn't get updated for a while and people move away from it, only to flock back when there's a new version, for example).
• Maybe they don't really want to work all that hard and are looking for a "cushy" job that they can kind of coast by at while still earning a paycheck. We'd like to think these people are rare but they are out there and it's a whole heck of a lot harder to hire someone and then let them go at most companies than it is to just not hire them in the first place.
• Maybe they are just really incompetent at what they do and they simply can't stay employed at the level their skillset might imply they should. I think this option is actually more palatable than the ones I've mentioned so far - the Peter Principle works both ways - but one can also see why a prospective employer might still be reticent to hire someone who is not good at their job.
• Maybe their resume isn't entirely truthful and it got inflated just a bit too far in order to impress.
• Maybe they've been around so long that they aren't willing to embrace change. I feel like this should be something you tackle in an interview, and I certainly do not want to advocate age discrimination, but if you are, let's say, hiring out a web developer and you've got a guy in front of you with 10 years of PHP experience with not a lot going on with, for instance, some of the more modern JavaScript frameworks, what does that say when you try to introduce something new to the system? Is this person going to insist beyond reason that the old ways are superior (which I have seen people do) or are they going to learn the new tech?
• Maybe there's some other reason unrelated to competence or sloth that keeps them unemployed. There could be a number of things which make a person chronically unemployed that a company might want to avoid, not all of which show up in a background check. Again, I feel like this is the kind of thing you suss out in an interview but I also know that overly cautious managers will sometimes take the "better safe than sorry" approach for this reason.

To the unanswered question of how you, the prospective employee, handle this, I would attempt to head things off at the pass. If you're concerned that people will see all of your experience and assume you're stuck in your ways, come to the interview prepared to talk about that new technique you've learned. If you keep getting fired from jobs, don't try to blame multiple firings on people other than yourself; ideally you want to try to pinpoint what you were doing wrong, fix it, and outline how it is that you fixed it. If you just need the job, you probably owe it to the other company to tell them this - if they're hiring in the industry they probably know if times are tight. You might not get a job you were planning on quitting in six months anyway but at the same time that company might find opportunities for you come in humble and ready to work.

In a sense, "you are overqualified" is one of the worst cliches in the business of business. It almost always means something other than "we think you are too qualified for the job at hand and think you will do too well at it". Your key as a potentially overqualified person is to figure out what they really mean by that phrase and speak to it instead of the stated concern.