Breaking the cycle of underemployment: A guide for students and graduates


Over the past decade, unemployment for college grads has shrunk by more than half — from a peak of 5.3% in July 2009 to 2.5% in July 2018. And that’s great news for current and future graduates. But there’s another, more low-profile issue affecting the financial future of college graduates: underemployment.

Underemployment refers to a person working less than full-time or at a job for which they are overqualified. There’s no one way to measure overqualification. Workers may be too skilled for their current position, or perhaps they have more education than the job demands.

What does underemployment look like? It can be the holder of a Ph.D. in humanities teaching at a high school. It can be a recent liberal arts graduate working part-time as a barista instead of launching a career. Or it can be a middle-aged manager at a manufacturing firm taking an entry-level position in a new field after losing his job to automation.

According to “The Permanent Detour”, a 2018 study of underemployment produced by Burning Glass Technologies and the Strada Institute for the Future of Work, 4 in 10 recent grads are overqualified for their first job out of college.

Other findings from the study include:

A graduate who starts out underemployed is five times more likely to remain so than their peers who start out in positions that match their level of education
Underemployed workers tend to make thousands less than their appropriately employed peers
Those who earned a degree in a STEM (Science, Technology, Engineering and Mathematics) field have less difficulty finding appropriate employment than others

But degrees and majors don’t always tell the whole story. Graduates of all disciplines come with skills that are attractive to employers. If you’re a current student, you can take action to avoid underemployment. And if you’re a recent graduate caught in this cycle, there are steps you can take to break free.

Finding the right skill set: A solution to underemployment

Some large-scale drivers of underemployment that simply can’t be helped. The Great Recession created a cycle of underemployment that some workers still suffer from almost a decade later. Technological advances can also create a spike in underemployment if they lead to employers eliminating more traditional positions.

On a position-by-position basis, underemployment is much more addressable. In their study “Saving the Liberal Arts”, Burning Glass Technologies and the American Enterprise Institute identified two skill sets that job-seekers can target to make themselves more appealing to employers:

Social skills (communication, critical thinking, etc.)
Technical skills (computer science, statistics, etc.)

To employers, the ideal candidate will display a mixture of both skill sets, instead of just focusing on one or the other. Today, it’s easier than ever to master these skills, but the techniques to do so differ for students, graduates and workers.

Avoiding underemployment: Steps for students

Maybe you’re a senior in college with a degree in the liberal arts or humanities concerned about your employment prospects after graduation. Or perhaps you’re a freshman who wants to pursue a career that offers a competitive salary but also wants to study a subject you’re passionate about.

If you’re currently pursuing a bachelor’s degree or higher, chances are you have access to a number of on-campus or online resources. You don’t have to go so far as changing majors or adding a minor to bring more skills to your portfolio.

Guidance counselors: Your guidance counselor may be able to provide a list of electives that can help you gain some experience in one or more of your desired skills. They may even be able to help you identify a career path for life after graduation and suggest resources that could help you prepare.

Internships: Of course, internships are a tried-and-true way to gain ideal skills for employment. But you have to choose carefully because not all internships are paid positions and they may offer widely varying amounts of actual experience. Before you accept an internship, make sure you have the opportunity to earn the skills you want.

“It’s all about creating a personal competitive advantage,” says Mark C. Perna, CEO of the consulting firm TFS Results and author of “Answering Why: Unleashing Passion, Purpose and Performance in Younger Generations.” “Internships can be a great way to test drive a company and determine if a position there would be the right fit. Further, internships are a valuable asset on a resume and can provide the missing piece of actual work experience that many graduates lack.”

Independent education: An on-campus library offers access to a wide variety of physical and digital materials that help you develop new skill sets. Some college libraries may even have current textbooks in reserve. Students at certain colleges may be eligible for a free or discounted subscription to a variety of online learning sites, such as, Coursera or Udemy.

Online tools: If you need help identifying your ideal combination of skills or career path, check out Launch My Career. Developed by the U.S. Chamber of Commerce Foundation, Launch My Career helps identify “hot jobs” in demand and helps students understand their current earning potential.

Although Launch My Career is currently available in a limited number of states, you can look for it by searching “launch my career” and the name of your state. If it isn’t available in your state, you can try a variety of public and private employment websites, such as Indeed or Linkedin. Many employment sites also offer insight into currently in-demand careers.

Escaping underemployment: Steps for graduates and workers

Underemployment can affect anyone, no matter how long they’ve been in the working world. “The Permanent Detour” found that 87% of workers appropriately employed at their first job continued to hold jobs matching their level of education five years later, but what about those who don’t?

Sometimes underemployment can be voluntary. Maybe you have a history of working full-time, but you’re choosing to take part-time work to have more time for family or other personal matters.

But sometimes underemployment can be involuntary for both experienced and new workers. Perhaps you’re a middle-aged employee facing job loss due to downsizing, but retirement looms on the horizon. Or perhaps you’re a college graduate taking part-time work until something better comes along. But student loans won’t wait until something better comes along.

Luckily, recent graduates and experienced workers can take a number of steps to find (or regain) appropriate employment.

Internships: Internships can be a viable option for the recently graduated (around 1 to 2 years outside of school). However, if you’ve been in the workforce for a while, consider volunteering instead.

Volunteering: Volunteering keeps your resume current. For experienced workers, it shows that you’re sharing your expertise while learning new skills, and for recent grads, it can help you build marketable skills without the need for another degree.

“Show up and get involved in your local chamber of commerce events,” says Eric Hobbs, CEO of the IT service provider Technology Associates. “You’d be amazed at how many influencers and executives give their time to nonprofits and community-oriented efforts. Learn a new role, build new skills or contribute to a cause you believe in, and you may be amazed at who you end up rubbing shoulders with.”

Independent education: Many online education sites available to students are also available to the general public. While you may have to pay full price for some courses, many sites will still offer a number of courses for completely free.

“Going back to school doesn’t have to mean earning another degree,” says Perna of TFS Results. “There may be a relatively inexpensive technical skill program they could complete in a year or so that would give them a marketable skill in a living-wage career.”

Online education sites typically offer “micro-credentials” — also known as “nanodegrees” or “digital badges.” Earning micro-credentials shows that you’ve completed a course in a specific field of study, and it can help you bolster your resume with specific skills.

Utilize the information provided by job-seeking tools to help narrow your search. LinkedIn has partnered with to offer LinkedIn Learning, which offers personalized nanodegree programs for $30 a month (free to LinkedIn Premium subscribers).

Networking: Sometimes when searching for a job, you just have to know the right person. Reach out to your personal network, and see if your school has an alumni network that can help you make new connections.

Advocacy groups: Advocacy groups dedicated to helping people find secure, appropriate employment can foster connections between employers and potential employees, and organize instructional meetings to help their employees improve their job search skills.

For example, Generation is an advocacy group dedicated to training recent graduates and helping them build skills. While Generation is designed for those just graduating or currently in college, AARP’s Back to Work 50+ focuses on helping middle-aged workers regain appropriate employment or advance in the workforce.

Finding the right job may be easier than you think

“Underemployment isn’t a new phenomenon,” says Gil Gildner, co-founder of Discosloth, a search engine marketing firm. “The good news is, even a less than desirable job gives you the financial ability to spend some time looking for a better opportunity.”

Underemployment is a stark reality in today’s job market, one that a number of Americans have to face. The good news is that you have more ways than ever to break the cycle and find appropriate employment. These can include online courses, personal networks and more traditional methods like internships and electives for current students.

Your major could matter less than your ability to develop and market a practical mix of skills, including both technical and social skills. Once you’ve developed those, you’ll be better able to avoid or escape underemployment and go on to have a successful career.

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