Overqualification is the state of being skilled or educated beyond what is necessary for a job. There can often be high costs for companies associated with training employees. This could be a problem for professionals applying for a job where they significantly exceed the job requirements because potential employers may feel they are using the position as a stepping stone.
In some societies, overqualification has become increasingly common as the proportion of college graduates in a population grows faster than the proportion of jobs in an economy which actually require college-level skills.
The concept of overqualification is often a euphemism used by employers when they do not want to reveal their true reasons for not hiring an applicant. The term "overqualified" can mask age discrimination, but it can also mask legitimate concerns of an employer, such as uncertainty of an applicant's ability to do the job, or concerns that they only want a job on a temporary basis, while they seek another more desirable position. Being overqualified also often means that a person was asking for too high a salary. "Overqualified" can also be used to describe a resistance to new technologies, or a pompous approach.
In the definition above, which states that an overqualified person may take a job to gain knowledge and leave the company, this could also apply to all other employees of the same company. The term overqualified, in any definition, should be considered as a subjective term developed by the person doing the evaluation of the applicant based upon their point of view which may in itself be biased. There comes a time in a person's life, when a choice is made to reduce the level of responsibility and one could consider the perceived overqualification as "added value" to the company when the applicant is willing to take a lower-level position, accompanied by a lower salary. When the decision is not based upon factual or unbiased factors, discrimination has occurred.
In the United States, the term "overqualified" has been found by the courts to sometimes be used as a "code word for too old" (i.e., age discrimination) in the hiring process.
The governmental employing institution may have written or unwritten upper qualification limits for a particular position. These limits protect less qualified people like newly graduated students, allowing them to find a job as well. For instance, in countries like Germany or Switzerland, a paid position of a PhD student may normally not be given for an applicant who already has a PhD degree. On 11 July 2019, the Madras High Court ruled that public employers can reject overqualified applicants.
Noluthando Crockett-Ntonga recommends that job applicants address potential concerns such as salary requirements in a cover letter and interview before the employer makes any comments about overqualification. Barbara Moses advises applicants who are described as being overqualified to emphasize their willingness to mentor younger co-workers, and to focus on what attracts them about the position they are applying to rather than emphasizing their ambition or desire to be challenged. Being overqualified can be an asset for employers, especially when the breadth of one's experience enables them to take on additional responsibilities in ways that benefit the employer.
The PhD can reflect overspecialization that manifests itself as a lack of perspective; for example, a PhD might not adequately prepare one for careers in development, manufacturing, or technical management.
In the corporate world, some PhD graduates have been criticized as being unable to turn theories into useful strategies and being unable to work on a team, although PhDs are seen as desirable and even essential in many positions, such as supervisory roles in research, especially PhDs in biomedical sciences.
Even in some college jobs, people can associate negative factors with the PhD, including a lack of focus on teaching, overspecialization, and an undesirable set of professional priorities, often focusing on self-promotion. These forces have led both to an increase in some educational institutions hiring candidates without PhDs as well as a focus on the development of other doctoral degrees, such as the D.A. or Doctor of Arts.
Some employers have reservations about hiring people with PhDs in full-time, entry-level positions but are eager to hire them in temporary positions.
Some argue that this reservation is rather a reaction associated with job insecurity, especially in situations where most of the company leaders hold lower qualifications than the PhD; as part of the wide phenomenon of credential creep.