Money and Main Street

Overqualified and underpaid workers

Workers are downgrading their job prospects, but employers get to cherry pick the best talent for less pay.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Jessica Dickler, staff writer

Brian Rushton Phillips has lowered his expectations substantially since starting his job search in February.
Recovery or recession on Main Street
Conflicting economic data show either the beginning of an economic recovery or a worsening recession. These readers are using their own leading indicators.
What's most important to you when choosing where to retire?
  • Affordable homes
  • Low taxes
  • Good health care
  • Low crime
  • Nice weather

NEW YORK ( -- These days finding a job requires sacrifice -- something employers are taking full advantage of.

Because of the tough job market, most job seekers are willing to accept positions they're overqualified for even if it means taking a paycut and a demotion.

Sixty-four percent of workers who were laid off over the last 12 months said they have applied for positions that were below the job level they had held previously, according to a survey by Career Builder.

And the vast majority of employers said they would consider experienced candidates who apply for jobs for which they're overqualified, Career Builder said.

Brian Rushton Phillips has 13 years of experience as a creative director in the publishing industry, but since he was laid off in February, Phillips, 37, has been applying for senior and even intermediate designer positions that are one or two levels down from his last job.

"The positions I have been applying for are typically $20,000-$30,000 less than I was making before the downturn," he said.

"I was looking for jobs at my level but there weren't many available," he said. "There are mainly junior positions available."

Still, Phillips has struggled to even get an interview and believes if an opportunity does come up, it will likely be a downgrade from his previous experience. "I am prepared to take whatever I can get."

But the tough climate often works out to the employer's advantage, because companies can hire more experienced and capable candidates, like Phillips, at a lower cost.

A bargain hire

According to Steve Williams, director of research at The Society for Human Resource Management (SHRM), new hire compensation is much lower than in previous months, which indicates that employers are in a position now where they don't have to increase their pay levels to bring in the best talent.

Signing bonuses are also off the table in today's economy, he noted, as employers not only scale back salaries, but also benefits and perks.

"It's great for them," Kathy Fahrman, vice president of Résumés by Professionals in Tampa, Fla., said of how the current job market benefits businesses.

"Companies are always looking to save money any way they can and that's a perfect way," she said. "These days, companies need people that are multifunctional and people who can fill multiple roles will be an asset."

Talkback: Are you overqualified and underpaid?

Employers have even increased the requirements for specific positions and lowered the corresponding salary in response to the current climate, noted Jo Prabhu, who runs placement firm 1-800-Jobquest in Long Beach, Calif.

"Companies realize they no longer have to pay high salaries and they are able to get high level employees at a lower salary and even title," she said.

Prabhu says she sees additional duties added to job descriptions with lowered titles and pay, and still no shortage of demand.

With more than 14 million people out of work, competition among even entry-level jobs is stiff.

"Graduates are no longer in need unless they come on as unpaid interns," she said. "CEOs are trying to get sales jobs."

Even her own business has benefited, Prabhu admits. Last year the recruiters she employs earned commission plus a base salary, but now "I hire recruiters for our organization on commission only."

"There are a lot more recruiters willing to work for just anything," she said. "We are taking advantage of the fact that we no longer have to pay anyone a salary."

"It has saved a lot of our overhead cost."

Talkback: Are you overqualified and underpaid?  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.