Signs You’re Underemployed & How to Change It

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Updated May 1, 2023

A recent study showed that college graduates who start their careers underemployed are more likely to remain underemployed 5-10 years later. Learn how to spot the signs of underemployment and find out what you can do to avoid this career pitfall.

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You just graduated from college and are applying to jobs – but the only ones you're getting callbacks from are those that make little use of your hard-earned degree. Or you've been in the workforce for a while, but your job title and salary don't match up with your education and training. If either of these scenarios sound familiar, you might be underemployed.

Underemployment is a big problem for many in today's workforce. It often begins with the first job, straight out of college, but then haunts you through the years. Learn about the most common warning signs of underemployment and what you can do to turn things around.

9 Signs You're Underemployed

To understand whether you are underemployed, you must first know what “underemployment” really is. There are a few different ways to define underemployment, but in general, it's the state of being in a job that doesn't fully utilize your education, skills and abilities.

Let's take a closer look at the ways you can determine whether you're underemployed.

You're overqualified

Sometimes the signs of being underemployed are as simple as holding a bachelor's degree – or higher – but working in a job that requires a level of education that's less than what you've achieved. “One major sign is that people are working below their educational level,” says Cheryl Palmer, a certified career coach. “For example, if a lawyer is working as a paralegal, that person is underemployed.” Unfortunately, a 2018 Burning Glass Technologies survey found that those with a bachelor's degree whose first job does not actually require a bachelor's degree are more likely to still be underemployed five years later.

You're not making as much as you should be

A quick look at resources like Glassdoor or PayScale can tell you what others in your current position are making, on average, around the country – and if you find that you're making far less than others in your field – especially those in your area – that's a big red flag. According to the same Burning Glass Technologies survey, 43% of recent graduates were in a job that did not require a bachelor's degree, while the other 57% were in a job that did require one; the pay difference between the two was staggering, with that 43% making an average of $37,330, and the 57% making $47,470.

You don't feel challenged

In the beginning, you went to work excited about what the day might offer and you felt like you were learning something new each day. But eventually the excitement wore off, no new projects came your way and you stopped learning new things. The loss of those challenging projects or new experiences might mean that your career has become stagnant and you're no longer progressing towards that next promotion or career goal.

Your work never changes

Day in and day out, it's the exact same thing. There are no surprises. Sure, the fact that nothing changes can be quite comfortable and that can keep you content in a job for a while – but eventually, the lack of growth is going to leave you feeling stuck and can ultimately hurt your career in the long run. And it's even worse if your boss discourages you from exploring new areas and responsibilities.

You're disengaged and unmotivated

When you're not being challenged, not learning new things and doing the same thing day in and day out, you're more likely to become disengaged and unmotivated at work. It's rare to find someone who loves their job every single moment of every single day, but in general, people who are working in jobs that match their education and skills tend to be motivated and excited about their work.

You're teaching your boss new tricks

Perhaps your boss curses every time he or she tries to use Excel, but you know it like the back of your hand. Or new software takes you only a day to figure out while your supervisors struggle. No one is an expert at everything and knowledge exchange can and should happen between all levels of a workplace, but if you find yourself constantly teaching the higher ups how to do their job – or just stepping in to do the job all together – that's a clear sign of underemployment.

You're not getting enough hours

“Another sign is that workers are working fewer hours than they would like to,” Palmer says. “A typical full-time position is usually 40 hours per week, but if someone is working 20 or 30 hours a week but wants to be full-time, that person is underemployed.” To make matters worse, part-time work often means an employee can't receive any sort of benefits, thus cutting individuals out of employer-sponsored healthcare, long-term and short-term disability coverage, stock options and other benefits.

You're taking on a second job (or a third) to make ends meet

Whether you're not getting enough hours or are working several hours but not getting paid enough, the bottom line is the same: Not enough money. That's why you're picking up side gigs to earn extra cash. You're not doing it to pay for the little luxuries, but to simply make ends meet – but others who have your same level of education aren't going through the same struggles.

You're only making lateral moves

A lateral move is when you move to a new role that's at the same level with similar pay as your current role. In some cases, a lateral move can be a good thing and may even be a better move in the grand scheme of things. But if it's been several years and you're still only moving laterally, chances are you may be stuck in underemployment, especially if you're simultaneously experiencing any of the examples mentioned above.

Reasons for Being Underemployed Temporarily

Underemployment can happen to anyone and in some cases, it may even be necessary, but it's usually a temporary situation. It isn't an ideal state, but some of the potential reasons for being underemployment include:

Little or no work experience

Some college students spend all their time in the books and not enough time trying to gain real world experience through internships, volunteering or working. When this happens, there isn't much to add to a resume, which makes finding a job difficult, especially when up against other grads who put in the time to gain a couple years of relevant experience. As a result, it may be necessary to spend a year or two in an entry-level position so you can gain some experience and then move into a role that better matches your education.

Training or skills gained in another country

Almost everyone has heard a story of someone who was a doctor, lawyer, CPA or in another highly-regarded or specialized position in their home country, only to arrive in the United States and take a job that is lower than the position they held abroad. When this happens, it's often due to foreign credentials that might not be accepted or not considered equivalent by U.S. employers. In this case, workers might take a low-paying job or one that's at a lower level while earning the U.S. credentials they need to move into a job that uses their skills appropriately.

Going back to school for an advanced degree

Those who are going back to school to earn a higher degree might choose to stay in a part-time job or a job that doesn't fully utilize their skills in order to have time for school. In this case, the goal is to complete the degree as quickly as possible and move into a job that is more suitable for their skills and knowledge.

The lingering effects of recessions

Though the majority of the economy has recovered from the 2008 recession, the damage done during those difficult years continues to haunt many who wound up underemployed or unemployed for long stretches of time. After working for many years in jobs that didn't make full use of their skills or education – or being unemployed all together – many are now far behind their peers in terms of advancement and pay and have to work their way back up again.

Fast and frequent technological changes

“For those educated a while back, they may not have kept up with technology changes,” says Laura Handrick of Fit Small Business. “For instance, in my field of instructional design, most jobs now require e-learning technical development skills using specific software that I have no experience using, even though I have a Master's in Instruction Design.”

Too much competition from technology

On the other hand, some workers find themselves out of a job when technology advances enough to replace their job. For example, ATM machines that cut down on the number of entry-level bank tellers hired by financial institutions or automated assembly lines that can produce more output than humans for less money. Workers driven out of these jobs for which they are educated and trained may turn to positions in the service industry, where they are much harder to replace but where they rarely have the same earning potential as they would if they were utilizing their degree.

Overqualified or overpriced

Your degree might make your knowledge worth quite a bit, but the competitive job market often looks to the lowest bidder. “Some individuals with high-level degrees are overpriced for the business market,” Handrick says. If competition is driving down salaries, accepting a job where you're underemployed may be the only option for some.

Lacking in people skills

Someone might be an excellent candidate for a position, with all the training and experience they need, but they bomb the interview process. “Some very qualified people are in fact, not very good with people. The interview process always involves people even if the job doesn't,” Handrick says. “I've met many very qualified, highly educated and talented individuals who have trouble with employment because they simply aren't likable and don't interview well.”

Discrimination

Discrimination in the workplace is illegal, but it does still happen. Some people have much more difficulty finding a job and end up taking whatever they can get because they need to work. This can be especially true for people with disabilities, mental illness or those who have spent time in prison. With so few employment options available to them, they will often take a job that doesn't make good use of their skills or education level, simply to be able to bring home a paycheck.

Is Underemployment Ever the Right Move Longer-Term?

The quick answer is yes. For most people, being underemployed is a problem – they feel held back from their true potential and their paycheck and title at work reflects that. But for some, being underemployed is actually a conscious choice. It's important to look at your life goals, where you want to be in a set number of years, your financial situation and current circumstances to help you decide whether underemployment is a negative. The reasons to stay underemployed long-term are as unique as the individual. Below are some examples of when it may be right:

  • Parents who want to spend more time with their children
    “Parents who want to dedicate time to their children might choose to stay underemployed to give them more flexibility with their time,” Palmer explains. “A mom or dad might choose to work part-time or take a lower position in order to accomplish this goal. Another reason that someone might choose to stay underemployed is that the person just wants to dial back. The person could be at the end of his or her working years and doesn't want to be stressed.”
  • Retirees looking to stay busy and socialize
    Oftentimes, retirees make the decision to re-enter the workforce in a lower role than when they were employed. Some may have been C-level executives or senior management when they retired and then realized they want a job to keep them busy or purely to stay connected with people. As a result, they take on jobs that aren't as demanding or stressful as their previous roles.
  • Employees who aren't looking to advance
    Not all workers are striving for the top and that's perfectly OK. Someone who has a hobby or interest that they have always wanted to pursue but never had the time to do so might actually enjoy being underemployed – assuming they can still pay all their bills. Or someone might be tired of the “rat race” and could be completely content where they are professionally.
  • People who need job security and good benefits
    In some cases, it boils down to job security and the benefits that come from a long-term position. This can be especially true for workers supporting a family or people with health problems. A job that doesn't fully utilize someone's education or isn't challenging enough may still provide a steady paycheck, attractive health insurance premiums, better work-life balance and other perks. For some, that's enough to make them stay long-term.

But if you don't see yourself in any of these scenarios and want to a better job, here's what you can do.

How to Go from Underemployed to a Job You Deserve

“This takes initiative on the individual's part,” Palmer says. “People who know that they are working below their potential have to position themselves appropriately to get where they want.” If you're feeling underappreciated, your skills underutilized and your hard-earned education going to waste, it's time to do something about it. These actionable, realistic strategies for getting out of underemployment and finding the job you deserve can help you get out of your rut.

Research your worth

It's time to get a firm handle on exactly where you are in the workforce. This includes researching similar positions, the typical income level of that position and the skills and knowledge required to get there. “Find out what would make your skill set more desirable to potential employers by analyzing job postings and doing informational interviews with people in the field,” Palmer recommends.

Go back to the negotiating table

Once you know what you should be making and you know you have the skills and education to warrant a higher salary, more responsibility or more hours, approach your boss with the facts. Schedule time for a frank discussion about the job you're in right now and where you want to be within the next few years. It might not produce immediate results, but it can get you moving in the right direction.

Work towards a promotion

Put your words into action immediately by stepping up your game as much as you can. Find out what promotions are available, how to get there and work towards that goal. Ask your boss for more responsibility and bigger projects. Pick up extra shifts. Get involved with committees. Do what it takes to make it clear you're ready to move forward.

Formulate a plan for moving on

If the discussion with your boss about advancement and higher pay isn't productive, it might be time to start looking for a new job that uses your skills and education to the fullest. But you don't want to simply quit your job and start sending out resumes. Instead, come up with a game plan. What's your ultimate career goal and what are the individual steps you need to take to get there? Save money for expenses and begin working towards the next step, whether it's learning a new skill, getting a certification or networking to find the right opportunity.

Perfect your resume

Your resume is often the first opportunity a potential employer has to “meet” you and first impressions count. Think about your skills and work experience and make sure your qualifications shine. Get expert advice and tips in our resume writing guide.

Volunteer

Volunteerism opens up doors you might not have considered. It gets you out in the community and helps you network, it looks great on a resume and gives you an opportunity to different types of roles. It can also lead to a new. Put your skills to good use here. For instance, if you are well-versed in accounting, offer to help a nonprofit organization keep their books in order.

Take a class to get a feel for a new career path

Not sure what you want to do? Think about the things you enjoy and what kind of career might fit into that. Then take a course or two that puts you in the thick of it. You'll learn more about this new area and can determine if it's the right move for you.

Go back to college to boost your education

Even if it's just one course at a time, that's enough to get you started on the right path. For those who work long hours, online courses, certifications and degrees are available through many colleges and universities. In some cases, employers offer options that pay for college. After you've completed your training or program, you can leverage yourself for a promotion or raise at your current job or you can use your newfound skills and knowledge to transition into a better career.

Network

It's been said so often that it's a cliché, but it's entirely true: It's not what you know, it's who you know. The more networking you do, the wider a net you cast and the more job opportunities you pull in. Start attending conferences that relate to your field and get to know people. Utilize LinkedIn and other social media platforms to stay in touch. Keep all contact information for anyone you meet, whether they're in your industry or not.

Find motivation outside of work

You may be bored and disengaged at work but you need to stay until you find a better job. Work may not be motivating enough but you can find motivation elsewhere to keep you going until you're in the right position to move on. Exercise regularly to get the endorphins going, travel, write, spend more time with friends and family – do whatever makes you happy and energizes you so going into the office is bearable and you don't lose sight of your ultimate career goal.

Resources for Getting a Job You Deserve

Tailoring Your Resume to Stand Out
How to Make a Stress-Free Career Transition
How to Create a Resume
Become Team
Shannon Lee
Contributing Writer

LearnHowToBecome.com is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

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