By Mark Beatson, Chief Economist, CIPD - originally issued 2 September 2015, now with graphics restored
Our recent report on over-qualification and skills mismatch, written by Craig Holmes and Ken Mayhew, has generated a vigorous debate - which is what a discussion paper should do – even if the result has sometimes been heat as much as light.
Holmes and Mayhew emphasise the importance of being clear on terms, how they are defined and how they are measured. In particular, there is a difference between being over-qualified and over-skilled for any particular job.
Over-qualification is a situation where an individual’s highest qualification is judged to exceed that required for the job. Note that sometimes the qualification “required” is that thought necessary to get the job and sometimes it’s the qualification level thought necessary to do the job to an adequate standard. Both these ways of judging the qualification “required” can change over time. It used to be possible, for example, to become a school teacher in the state system without a university degree but a degree became mandatory at the end of the 1970s. Teacher training colleges eventually became absorbed into the higher education system and a similar process has occurred, to a considerable extent, in nursing. In other occupations, competition for vacancies may have made a degree a de facto requirement even if it is not an absolute necessity.
Similarly, an individual would be described as over-skilled if their knowledge, skills or competence is judged to exceed that required for the job.
It is therefore possible to be both over-qualified and over-skilled. It is also possible to be both over-qualified and under-skilled. This is where an individual holds a higher qualification than the minimum required but lacks some of the skills required to perform the job to an adequate standard. A recent OECD analysis of the 2012 Survey of Adult Skills found that 1.2% of workers in the OECD countries covered by the survey were over-qualified and under-skilled, whereas 5% were over-qualified and over-skilled.
Both over-qualification and being over-skilled involve a judgement. Who makes this judgement and how is it made? Box 2 of the OECD paper referenced above is a useful summary of the different approaches. When it comes to over-qualification, one approach to deciding the minimum qualification required is to let statisticians decide by analysis of occupational classifications or job characteristics. As my colleague Ben Wilmott observed last week, you get a very wide range of estimates using this approach and definitions of “graduate jobs” that in some cases appear far-fetched.
An alternative approach is to ask employees themselves. As the OECD say “…This type of self-reported measures can be subject to biases due to the wording of the question or the impact of external variables … However, they have the advantage of being job-specific rather than suffering from the caveats associated with the other measures”.
The OECD Survey of Adult Skills was conducted in 2012. Data were collected for 24 countries including England and Northern Ireland (Wales and Scotland did not participate). The survey found that England and Northern Ireland had one of the highest rates of self-reported over-qualification (30%), second only to Japan.
Most of the data on over-qualification presented in the Holmes and Mayhew paper suggest that over-qualification has increased over time. This conclusion might, though, need some qualification. Over-qualification did not appear from nowhere ten to twenty years ago, nor is it clearly on an ever upwards trend. The chart below presents estimates of over- and under-qualification for various years between 1986 and 2012 taken from the Skills and Employment Survey series.
While the proportion over-qualified in 2012 is 8 percentage points higher than in 1986, it was 3 percentage points lower than in 2006. [These estimates of over-qualification are higher than those from the 1992 and 2006 surveys reported in the Holmes and Mayhew paper but they show a slower increase over time].
These data are based on qualifications as reported by employees together with their assessment of the qualification required to do the job. In the 2012 survey, employees were asked how important it was to have the (required) qualifications to do the job competently: 35% of the over-qualified said the qualifications were essential whereas 43% of those with qualifications matching the requirement did so. When asked how long it had taken them to learn how to do the job well, 52% of the over-qualified said it had taken 3 months or less, compared with 29% of those with qualifications matching the requirement. These data suggest that, on average, the over-qualified perceive less challenge in their jobs than those with a qualification match.
An even more up-to-date estimate of over-qualification is available from the autumn 2014 CIPD Employee Outlook survey. Our survey asked one straightforward question: “In your opinion, are you over qualified, have the right level of qualifications or under qualified for your current job?” The chart below shows that 28% of employees regarded themselves as over-qualified (63% said they had the right level of qualification, 6% thought themselves under-qualified and 3% were undecided).
The chart also shows a higher proportion of women under-qualified than men. This is because most part-time workers are women: for both men and women, the proportion of part-time employees who are overqualified is nearly double that of full-time employees. The chart also reminds us that over-qualification isn’t just an issue for new(ish) graduates: while employees with a first or higher degree are more likely to see themselves as over-qualified, it affects people of all ages.
Our data also suggest that over-qualification has a negative effect on measures of employee well-being. The chart below shows how over- and under-qualification are both associated with lower levels of job satisfaction and career satisfaction (the latter was measured using the question: “We would like you think about your career or working life AS A WHOLE when answering the next question, please do NOT think just about your current job. To what extent are you satisfied or dissatisfied with how your career has developed to-date?”)
The differences in employee satisfaction are large: whereas 60% of employees with the right qualification level are satisfied (or better) with how their career has developed, the proportion is just 35% for the over-qualified.
Controlling for other variables reduces the size of these effects. In the case of job satisfaction, once allowance is made for variables such as the degree of excessive pressure, perceived work-life balance, the quality of relationships (with colleagues and line manager) and satisfaction with job content, there is no statistically independent effect for over-qualification. However, a similar analysis showed that being over-qualified (compared to having the right qualification) does have a significant negative impact on career satisfaction – larger in quantitative terms than having been the victim of discrimination.
So over-qualification has an impact on how people feel about the progress of their working lives even after controlling for the type of job people are currently in and how they feel about factors such as whether they have been given satisfactory training and development or how well their (current) pay reflects their contribution. My last blog also found that over-qualification was associated with employees being more likely to feel they couldn’t progress in their current organisation. The analysis here confirms this is usually because they feel trapped in their current role rather than because they have developed so far they have outgrown it.
Much of the policy discussion in the last couple of weeks has been about the quantity of public funding and the quality of information and advice available on the options facing young people leaving school or college – should it be university or an Apprenticeship?
These are important questions but just as important is what happens in the workplace. Can employers create the culture and systems that allow individuals and their jobs to develop?
And the data presented here suggest that, for many of the over-qualified, the availability of flexible working and/or better quality part-time jobs is the best way to release untapped workforce potential.
Thank you for your comments. There may be a short delay in this going live on the blog page as we moderate the comments added to our blogs.
Having supported job seekers for the last five years, I am also conscious of the impossible barriers that HR automated selection systems pose. How many times have I seen a top flight professional with completely relevant experience chucked out of the running at this first stage - often because recruiters fail to anticipate the unique profiles some prime candidates have. These people often end up going for lesser roles where they can complete the 'checklist' - hence will then be over qualified and over skilled. Meanwhile, the other type, perfectly qualified and clearly adaptable and active learning who haven't been given the opportunity to show their mettle in a suitable role. This person also ends up in the wrong role and further perpetuates their difficulty in meeting the spec of their ideal role. Honestly, why are we wasting so much talent whilst wailing about so called 'skills shortages'?
Excellent piece, thank you Mark. It's good to see the stats underpinning something I've observed in many organisations: over-qualification is a) increasingly common and b) seems to be linked to lower engagement.
I wonder what happens when we stir in what is now typically £40,000-worth of debt on starting working life. No wonder work is perceived to under-deliver against what was apparently promised.
As you suggest, I think there must be more options on how to enter the workplace beyond the degree-apprenticeship dichotomy; and with all of us working harder for longer, more opportunities (or maybe that should be support for) lifelong learning.
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