Business hiring tips: Reasons to hire less educated applicants

Too much education is bad for corporations for a multitude of reasons, but having access to an educated workforce is always good just in case the need arises. Department managers and human resource officials know that hiring people with too much education sometimes leads to more disadvantages than benefits for an employer. Moreover, since businesses are usually in existence for the primary purpose of making employees and employers money, obstacles to that purpose including too much education are to be avoided.

Over-qualification

Overqualified employees get bored, unhappy, annoyed and can disrupt workplace equilibrium with subversive manipulation, underhanded deeds and misplaced professional ambition to the detriment of peers. Such individuals are better off not hired by some employers because they are simply not worth the effort, trouble, and time. This is not to say less educated employees are not capable of the same things. Rather, according to the Harvard Business Review, there is an increased possibility that employee curation decisions will turn bad if more overqualified employees are hired. 

Cost

According to Patricia Schaefer of Business Know How, the Family and Work Institute cites lower education as the dominant factor in lower employee earnings. What if those employees can also do the same job for less though? In some cases including outsourcing, if less educated people can do the same job for a net gain, it is more cost effective to hire them. For example, hiring a 30K per year employee with a Bachelor of Arts with a net profit margin of 21 percent is better than keeping 45K per year employee with a Master of Science. This is especially the case if revenue rises less than the amount needed to offset the higher costs of hiring a more educated employee. 

Turnover

Employees with a lot of education, or higher earnings expectations are less likely to want to stick around a business. The Center for American Progress states employee turnover costs companies because they have to pay for things such as lost productivity in between hires, training expenses for new hires and recruitment costs. If an educated new hire is obviously seeking upward mobility and there is no room in an organization to accommodate that, then hiring a potentially less ambitious or less educated employee is sometimes the solution.

Competition

Educated people know a lot and that is a potential threat to co-workers and managers. In a report published by the InterAmerican DevelopmentBank, it was found that younger employees - some of whom are more educated than those making hiring decisions – are discriminated against in order to preserve the job security of older employees. New hires that have too good a grasp on what is going on, and that are able to out-think both their superiors and colleagues are a job security hazard and put the beloved status quo at risk by rocking the corporate boat. 

Insubordination

The possibility of insubordination is also a potential consequence of hiring an employee with more education than is necessary to work a job. Employees that are overqualified are more likely to become frustrated or disgusted by their work situation thereby raising the probability of an insubordinate act. In "Taming the Difficult Employee", Nancy Aldrich states insubordination arises from "lack of control" and "rewarding negative behavior". Using similar reasoning, being rewarded for getting an education is a negative reward when that reward is a job that is too restrictive and takes away from an employee's sense of control.

How Outsourcing Benefits Business and the Economy But Not Necessarily Individuals

Outsourcing does cause job losses, and can contribute to lower consumer spending but it can make corporations wealthier. Over the long run, wealthy corporations are advantageous to the economy especially if that wealth is used to grow businesses and increase employment.

For people who lose jobs it's difficult to rationalize the personal implications of being part of a greater economic formula that theoretically benefits the population at large. For businesses, outsourcing often has many benefits that assist in meeting corporate goals, shareholder expectations and economic objectives.

To not outsource would be riskier than outsourcing and the benefits of outsourcing outweigh any disadvantages if accounted for properly. In the long term outsourcing provides corporate, community and economic cures that would be a missed opportunity had outsourcing never taken place. Below are a few of the benefits enjoyed by companies that successfully outsource.

• Lower employment related costs
• Increased revenue
• More investment capital
• Creation and/or maintenance of more specialized jobs
• Improved competitiveness
• Outsourcing reduces the need for office space in pricier real estate markets lowering overhead costs.

The negative impacts of not outsourcing

Companies outsource to exist in a competitive world with the hope of getting an edge. If they didn't outsource they could potentially face lower profit margins, decreased equity capitalization, reduced advertising, marketing and research budgets in the short term alone. In the long term a chronic decrease in profit, equity, leveraging and operating budgets could lead to decreased market share, higher financing interest rates, even more decreases in profit and budgets and then possible downsizing, take over or bankruptcy.

Social consequences of outsourcing do not outweigh the benefits

While outsourcing may not be considered ethical or valuable to a community of workers the benefits outweigh the costs at both the corporate and macro-economic levels. The corporate advantages are outlined above and the economic benefits include the following:

• Potential for higher Gross Domestic Product (GDP)
• Increased financial leveraging both domestically and internationally
• Improved chances of economy improving innovations across various industries
• Possible increased market share and/or reduce market share loss
• Greater global market positioning in terms of GDP can lead to
• Sustained and/or improved confidence in national currency

It is evident outsourcing not only advances corporate goals but also national goals. While it is true that not everyone benefits from downsizing the advantages to a nation outweigh the costs. Laid off workers who retrain have a greater chance of improving their financial situations and in the long run a more specialized and skilled workforce can emerge in part from the effects of outsourcing. This more skilled and specialized workforce can be advantageous both at the community level, corporate level and national level in terms of know how, income potential and standard of living.

Outsourcing is more likely to be a cure for corporate ailments than a problem. The advantages can be seen across more than corporate balance sheets and income statements, but also in society, national economic performance in addition to corporate bottom lines. There a few negative short term impacts on local communities of workers, but in the long run, the advantages do outweigh the costs, and future generations may be thankful that outsourcing has taken place.