Harnessing skills of the overqualified : Building human capital pool for competitive advantage

Purpose Many organizations hold the traditional view that due to the potential of higher job dissatisfaction and employee turnover rates, hiring overqualified job candidates is risky. The purpose of this paper is to take an alternative perspective, using human capital and resource-based theories to propose that hiring overqualified job candidates adds to a firm’s human capital depth. This additional human capital depth, in turn, enables firms to improve near-term organizational effectiveness and, ultimately, build long-term competitive advantage. Thus, the conceptual framework makes reference to deployment of the overqualified as an under-used source of human capital. Design/methodology/approach This paper reviews theory and proposes a conceptual framework for reimaging overqualified human resources. Findings There are powerful benefits to hiring overqualified job candidates; however, by not hiring overqualified job candidates, organizations are missing out on a large, easily available, and potentially lower cost source of highly skilled human capital. Originality/value This paper uses human capital and resource-based theory to propose a conceptual framework which makes four key contributions. First, the authors propose that hiring overqualified job candidates increases an organization’s human capital depth. Next, this increased human capital leads to near-term improvements in employee performance and organizational effectiveness. In turn, firms using career development exercises such as job crafting, mentoring, and/or informal leadership to retain overqualified human capital are more likely to convert near-term organizational effectiveness into long-term competitive advantage.