Canadian HR Reporter

CANADIAN HR REPORTER December 14, 2015 NEWS 3 Overqualification on the rise among recent graduates: Report Can lead to lower levels of job satisfaction, higher turnover rates BY LIZ FOSTER YE AR S OF L ATE-NIGHT study sessions, essays and ex- ams go into each undergraduate degree. But those efforts may not be paying off like they used to — a growing population of recent graduates are overqualified for their jobs, according to a report from Canada's Office of the Par- liamentary Budget Officer (PBO). In 2014, about 140,000 or 56 per cent of recent university graduates aged 24 or younger were overqual- ified; roughly 65 per cent were ei- ther overqualified or unemployed. Among university graduates aged 25 to 34, about 600,000 or 40 per cent were overqualified in 2014. "Our report did not explic- itly look at the consequences of overqualification for employers but we would expect some costs," said assistant parliamentary bud- get officer Mostafa Askari. "Over- qualified workers may face lower levels of job satisfaction and at- tachment, which could increase turnover rates for employers. e overqualification means that resources may have not been al- located efficiently." Additionally, the rate of recent graduates working in jobs that match their education level has dropped, found the report, which used educational attainment as the sole measure of qualification. It did not account for factors such as experience or labour demand. "We would expect work expe- rience to have an impact on job qualification because it could add to a worker's qualification," he said. "For this reason, we focused on younger university gradu- ates where education is relatively more important than for older workers. Regarding labour mar- ket demand, we would expect that to have an impact as well but we were not able to find satisfactory data to evaluate its impact." College graduates, however, have fared better. eir overquali- fication rate dropped from 37 per cent in 2006 to 34 per cent in 2014. And the proportion of recent col- lege graduates who were rightly qualified for their jobs rose from 45 per cent in 1998 to 50 per cent in 2014. "While we do not have data for demand for college degrees, this could be a factor in lower quali- fication rates as it reduces the likelihood of excess supply in the market for college graduates," said Askari. "Moreover, college gradu- ates mostly specialize in skilled trade or industries that require certification, therefore limited overqualification." Demand was a key factor in the issue of overqualification, ac- cording to the report. Among the recent university graduates who reported having more education than was required for their cur- rent position, not being able to find the job they wanted and not being able to wait for the job they wanted were the two most popu- lar explanations. Using data from Statistics Canada, the report showed the majority of overqualified employees were found in business management and public administration, social and behavioural sciences and law, and humanities. "We sought to provide addi- tional information on labour uti- lization that may not be captured by typical indicators for younger workers," said Askari. "It indicates that there is an is- sue of matching educational at- tainment with job requirements, which may have policy implica- tions in terms of ensuring that university programs be congruent with job market requirements." e PBO assessed qualification from the federal government's La- bour Force Survey. is methodol- ogy makes the report compatible with other commonly reported labour market data, such as the unemployment rate. e survey data has a significant history, said Askari, and could be tracked mov- ing forward. Recruitment issues Overqualification is often an is- sue raised during the recruitment process, said Rowan O'Grady, president of the Toronto-based recruitment agency Hays Canada. "Employers are concerned about engaging with an overquali- fied candidate because their num- ber one fear is that the individual will leave as soon as a more senior LEADERS > pg. 6 Competence. Validation. Trust. HRPA is proud to introduce the CHRP, CHRL and CHRE designations. The new global standard for HR excellence and professionalism. The Certifi ed Human Resources Professional, Leader, and Executive designations for HR professionals at every stage of their careers. Unleash the new gold standard: www.hrpa.ca/designations

• Cover