When most people think about underemployment, they don’t’ think of it as a good thing.
Underemployment means there is a mismatch between your job and your skills and experience. Meaning, you could be making more money and have a more challenging, “better” job.
On the surface being underemployed doesn’t seem to have benefits. After all, who doesn’t want to make more money?
You could be making more money that would help you reach your financial goals faster. You could also be doing work that is more challenging and, in theory, more fulfilling.
Depending on your goals, there may be benefits to being underemployed, though. Let’s discuss a few of the benefits.
Want to Work for Yourself? Being Underemployed Can Help
Being underemployed typically is associated with being bored. A 2016 report by Gallup reported that 55% of millennials are not engaged at their job, with an additional 16% “actively disengaged.”
After spending seven years in the corporate workforce, this isn’t surprising. A direct quote from a few years ago from a friend who had just started working after college was “I was surprised at just how little was expected of me.”
Now we could go into all the ins and outs of why millennials (and non-millennials) are not engaged at their 9-5, but we’ll save that for another post. The point here is that you are more likely to be disengaged and underemployed than to not be.
When this happens you can look for a new job or look to move up, but I urge you to first consider what your long-term goals are. Is it really your goal to be a director, VP, or executive at a business? Is that your end goal? Or would you be much happier, healthier, and fulfilled working for yourself?
This is a very important question to answer. If your ultimate goal is to work for yourself and own a business, you need to seriously consider how you react to being underemployed. Taking on a new job or moving up and taking on additional responsibilities may not be the smartest thing to do.
One of the things I talk about in Hustle Away Debt is the unexpected upside of side hustles. Technology has made it possible to literally build and run a business from your phone. Never before in the history of the world has anything remotely close been possible.
You do not have to quit your job to start a business.
Let that sink in.
You can have all the benefits and protections that come with a 9-5 while you test out your business idea in your spare time. If the business doesn’t catch on or pan out, you can quit and move on to the next thing without personally going bankrupt.
While technology has made this infinitely easier, if not altogether possible, building a business still takes time and effort. And doing all that work on top of a 9-5 is tough, regardless of how overqualified you are for your current job.
If you want to be self-employed, being underemployed can be a blessing. At one point in my career I nearly sold my blog and moved on from side hustles so that I could dedicate more time and energy to a promotion I had received. In the end I’m glad I didn’t – I received a book offer just a few months later.
If you need capacity to work on your side hustle and your ultimate goal is to work for yourself, then count being underemployed as a benefit.
Your “Season” of Life Could Make Underemployment a Huge Benefit
Everyone goes through challenging and busy times in life. Whether it’s having a new baby, dealing with a health problem, or something else, there are seasons of life where a lot of your energy is going to be used up outside of your 9-5.
In these seasons being underemployed can be a benefit. You may even need to be underemployed just to get through the challenge or responsibility that you have outside of work.
I’m being intentionally ambiguous here, but I think anyone reading this will be able to identify a time in their life when they or someone they know was unable to be fully present at their 9-5 and gave a lot of energy towards situations outside of work.
It goes without saying that being prepared financially for these situations is always helpful. I know many 20- and 30-somethings who have the option to contribute to an HSA but choose not to because they are healthy. Then when they have a huge unexpected medical situation that requires thousands and thousands of dollars they are left wondering why they didn’t just plan ahead and contribute before they needed the money.
Less Stress at Your 9-5
For many a job is just “a job.” While I talk a lot on this site about making as much as you can at your 9-5 through salary research and other strategies, I also recognize that many simply do not want to be “maxed out” at their 9-5. Or perhaps they want to reach a certain level of employment and then stop trying to go higher, allowing them to avoid any unnecessary stress stemming from their 9-5 and enjoy their free time.
This of course is all relative. There’s always a chance management will change, expectations will change, and your job will change. Nothing is guaranteed at a 9-5, which is why I am so big on promoting the power of side hustles, even if it’s just a small income stream. It protects you if things change at your workplace and your low stress job becomes high stress with long hours.
I’m stating the obvious here, but being underemployed can be a good spot to be in because you can always move up. Employers are having a difficult time finding qualified workers, and those who are underemployed are prime targets to fill open positions. After all, being underemployed implies that you are over-qualified for your current role, making you qualified for higher-paying jobs employers are trying to fill.
Are you underemployed or have you been underemployed in the past? Have you benefited from being underemployed?
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Great points DC. I have been underemployed in the past, and usually used it as means to find something else to fill my time and that was often to do something on the side. Completely agreed on not needing to leave your job to start a business. If I could go back I would’ve tried to start while at my old job, though that would’ve also added compliance hoops to jump through.
Yeah it’s not always possible to start a business on the side. You have to be really careful about conflicts of interest. It’s been quite some time since you worked for an employer, definitely an inspiration for others looking to make the leap!
when you are underemployed is perfect time to set goals and understand the importance to have budget, savings, emergency fund…atg least this is what happened to me in 2012 when I lost job and I needed to repay a little debt…now I’m debt free but I still have a budget and a love/hate relation with it:D
That’s great to hear! I’m glad you were able to make something positive out of losing your job..
I recently spent 2.5 years being underemployed, and I didn’t benefit from it all. It actually made things worse.
Working for a manager who has less experience than you (and does a terrible job!) is demoralizing. Working for minimum wage is demoralizing. Hating everything about your job is demoralizing. It was just as – if not more – stressful than any other 9-5 job I had.
I did try to “work for myself” during that time, but that too was a challenge. I’d come home from work completely drained and depressed. I had no motivation or desire to do anything productive.
So although you raise some good points about being underemployed, it REALLLLLLLLY depends on the situation. If you’re underemployed – and under paid, and underappreciated – you likely won’t find any benefit in that.
Yes, of course it depends on the situation. I think a lot of people feel a need to constantly move up at a job, despite “moving up” not aligning to their long-term goals. Your situation sounds different, that you were underemployed but without any of the benefits that I described.
Being underemployed is how I learned a few skills I wouldn’t be using to earn income today: tutoring and freelance writing.
As you had mentioned with the 9-5 and not being “fully present,” that was me two years ago. A change in upper management expedited the urgency to change career paths so I could maintain my work/life balance with a growing family. My underemployment came after I left that job, but, it really was a blessing in disguise even though it took me by surprise.
Had a stuck to the daily grind, it’s very possible I still would be there and been thinking “what if.”
Thanks for sharing your story, Josh! It would be interesting to get a pulse on how many people are underemployed by choice versus it happening unexpectedly or simply unable to break through to that “full employment” level.
I was laid off unexpectedly over the summer after working for years at well-paying jobs that required 50+ hours a week. I found a new job within three weeks, but it qualifies as underemployed due to working less than 32 hours a week (at 28). It’s a new experience and while it’s good to have time to refocus, it can be pretty demoralizing some days (been at this for a month now). That said, it can be good to help you refocus and I’ve finally been able to launch a blog for passive income!
You bring up an important point: there are huge variations in being “underemployed.” It can be a tiny bit underemployed, or greatly underemployed. I think being a little underemployed can be hugely beneficial if your goal is to have time/capacity/energy in your spare time.
Interesting post, David. I’ve never been underemployed; my wages have followed my skill level, so I can’t speak on the benefits of being underemployed. The only thing I can see is people should constantly be improving their skills regardless of their current situations.
I don’t think it’s necessary to be underemployed to speak to it. I agree, though, that focusing on skills and ability to provide value is important.