Underemployment occurs when an employee’s job does not fully utilize their skills, experience, or availability for work. It can mean working fewer hours than desired (involuntary part-time) or being employed in a role that doesn’t match one’s qualifications, experience, or career goals.
Types of Underemployment
- Visible underemployment – When employees work fewer hours than they are willing and able to (e.g., part-time workers seeking full-time jobs).
- Invisible underemployment – When employees are in jobs that don’t make full use of their skills, qualifications, or education (e.g., a graduate working in an entry-level role with no growth potential).
Causes of Underemployment
- Economic downturns and limited job opportunities
- Skill mismatches between workers and available jobs
- Structural changes in industries (e.g., automation, outsourcing)
- Lack of access to full-time or stable positions
Why Is Underemployment Important?
Underemployment is a key labor market indicator. It highlights inefficiencies in how talent is utilized and can impact both individuals and organizations.
For employees, it often leads to:
- Lower income and financial strain
- Reduced job satisfaction and career growth
- Skill stagnation or decline
For employers and economies, it can mean:
- Untapped talent potential
- Lower productivity and engagement
- Higher turnover as employees seek better opportunities
How Can Organizations Address Underemployment?
- Skills development & upskilling – Offering training and career growth opportunities
- Better workforce planning – Aligning talent with appropriate roles and responsibilities
- Flexible job design – Creating roles that allow employees to apply broader skill sets
- Transparent career pathways – Helping employees progress into roles that match their qualifications
In short: Underemployment reflects a misalignment between workers’ potential and the work they do. Addressing it not only improves employee well-being but also strengthens organizational productivity and growth.
