How can a person be over qualified for a position?
Many jobs require experience, but how do they determine if a person is over qualified for a position?
They look at your resume, see that your background is "better" than the job you're applying for, and assume you'll be unhappy in the job (even if you know you're willing to take any job at all). In reality, a good part of the time, even if you're willing to take any job and be happy to do your best at it; they're usually right about your being miserable (at least secretly) if they hire you. Other factors, they know you've been making more than they the way to pay, and they don't think you'll be happy with less money. They know you've got years of experience and think you won't want to report to someone who may have less experience than you (that type of thing). Another one: They know you're x years old and have x years experience in x job. They know the people you'd be working with are younger, have fewer years experience, etc.; and they don't think you'll fit in well with them (which you probably won't).
Most employers want to employ people who will stick with the job and stay with them. Often they suggest that people with high qualifications will not stick at mundane jobs, and will quickly move on. They believe that the employee is only using the job as a stopgap whilst seeking more nearly appropriate employment.
By fitting the requirements posed for the position. A person is over qualified if they have more qualifications than are necessary.
A hiring manager needs to fit the best qualified candidate to the position. Being over qualified can actually be an impediment to being able to fit into a system, even though that may be sort of anti-intuitive. An over qualified applicant generally means that they are more specialized and therefore their experience may actually be a worse fit then someone with more general or less skills. Otherwise Mick S. explained it well.
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