Are Overqualified Candidates Value for Money?
There is a prevailing notion that overqualified staff are undesirable, and overqualification can be a reason for many hiring managers to reject candidates. This is counterintuitive: if you were betting on a horse race you would choose the best horse and you wouldn’t refuse to back it just because it was overqualified! You’d be more likely to back it, surely?
Of course, people aren’t horses, and there is an expectation among many hiring managers and recruiters that overqualified staff will grow bored and frustrated if placed in roles that are “beneath” them. This could lead to disengagement, insubordinance, dissent, underperformance, and possibly premature departure.
Is this just prejudice, or is there evidence to support the idea that overqualified staff will underperform? According to a Harvard Business Review paper, “The Myth Of The Overqualified Worker,” the overqualified don’t underperform: they actually perform better than other employees, which stands to reason. The article pointed to two studies — one of 5,000 Americans and the other of 20 employees in a Turkish apparel chain — which showed that overqualified staff outperformed qualified staff and was less likely to quit, which is surprising, given the fact that studies show overqualified staff experience greater dissatisfaction.
If you can hire an overqualified staff member for the same price as a qualified staff member, then the overqualified staff member is massive value for money. Although they may be more discontented, they will perform better and be more loyal — if they are managed effectively.
Not all overqualified staff will agree to be paid at the same rate as qualified staff. They may want to be paid more to reflect their additional experience. If you do consent to paying them more, they might not be quite so much value for money and could even end up being a net loss. If you do agree to pay an overqualified staff member more, you should ideally link that additional pay to performance to ensure you get a return on your investment. If they overperform, they get paid more; if they don’t overperform, they don’t receive higher pay and you don’t lose out.
Increased Bench Strength
There are other hidden benefits to the overqualified. For example, if a manager or senior staff member leaves, you may have a replacement ready to go in your pipeline. In other words: hiring overqualified staff increases your bench strength. This increased bench strength will also be especially beneficial in a growing business, as open positions will proliferate as the company grows, particularly managerial roles.
There is one main challenge in managing the overqualified: they may not feel challenged or empowered. There are a lot of ways to deal with this, such as empowering overqualified staff more and giving them the opportunity to share their knowledge and mentor less experienced employees, which further increases their value to the business.
In conclusion, while overqualified staff do present a unique challenge, the benefits generally far exceed the drawbacks. They will outperform the qualified, stay longer, and are generally great value for money, assuming you can negotiate the right compensation package.