Underemployment: Impact on Business and Strategies to Prevent it

This report examines the impact of underemployment on business organisations and the ways, methods and strategies that may help in preventing the situation of underemployment. It discusses the objectives, time scale, background, marketing strategy, impact on business, and constraints that create the situation of underemployment.

Underemployment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Underemployment is a situation where there is lack of workforce with unavailability of
workers in the area of companies, industries or workplace. It is also the situation where skills or
talent of the employee is not valued which forces the workers or employees to give up their work
in order to recognition. Generally, underemployment is caused due to lack of jobs at workplaces
which is mainly due to unavailability of jobs in organisations. Sometimes the companies or
organisations pay less to the employees or workers which forces them to leave their jobs. This
situation of underemployment is very uneconomical for growth and development of any country.
The efficiency, productivity and skills of the employees is misused or wasted due to this situation
of underemployment. When an employee is not able to work full time which causes less use of
his skills leading to hamper his financial needs causes the situation of underemployment. The
main reasons of underemployment are extremely severe and critical economic situations that
affects the growth of a company or organisation. The decline in economic growth of a country
also causes the situation of underemployment which affects the performance and growth of an
employee(Cuestas and Gil-Alana 2018). This situation also leads to less or not full use of
resources by employees which affects the overall development of employees. The main aim of
this report is to examine the impact of underemployment on business organisations and the ways,
methods and strategies that may help in preventing the situation of underemployment.
TASK
The situation which causes the deteriorating conditions of employees due to lack of work,
workforce and jobs in companies, organisations or industries causes underemployment. The
manner in which the labours are employed with part time jobs which does not regulate with their
professional or financial needs. This is a very alarming situation in consideration with the
efficiency and productivity of employees which must be improved in order to regulate the
working standards among employees.
Objective
The main objective of underemployment and the situation of insufficient employment is
to eradicate such problems of employment from the working industry (Driffill 2018). It aims to

provide a stable base of employment for employees in order to manage their economic needs.
The jobs of employees is so insufficient that it affects his performance and growth in the
company (Fakih, Haimoun, and Kassem 2020). This leads to improving the standards of
organisations by providing productive work to the employees and also contributing in improving
their skills.
Such objectives can be achieved by taking following measures in order to improve the situation
of underemployment which are mentioned below:
 The standards of the company should be improved in order to provide and enforce
productive work for growth of employees as well as the organisation.
 There should be proper and appropriate training of the employees in order to give them a
descriptive idea of particular work or task done by them.
 The skills and performance of employees should be improved by providing them regular
training for implementation of productive work in the organisation.
 Government should also provide sufficient and adequate opportunities for enforcement of
a stable and productive work force.
 The employees should be offered job according to their skills and capability which may
enable them to execute productive results for growth of the company or organisation.
Time scale
This situation refers to the condition of underemployment which is formed due to need of
additional hours for working with load of extra work. When employees are not able to work
according to the required task or have worked less in comparison with the allotted hours. The
situation where employees could have worked for additional hours if provided an opportunity for
working. All these situation form the condition of time scale in underemployment.
Brief background of the problem
The change in economic conditions of the country with fall in growth of economy caused
the problem of underemployment. The condition of recession which causes decline in the
economic growth of the country also created the issue of underemployment. This situation arises
when skills of the employees are not used in a productive way which adversely affects the
performance of employees (Hauser, and Burrows 2018). The increase in population with more
supply of workers in comparison to less demand of workers also created the lack of employment
in corporate sector. This increase in population with less availability of opportunities created a

great barrier for equal work opportunity. The lack in development of the industries with less
technological and economic support blocked the advancement and capability of working
industry. When the skills of employees does not meet the requirement of work of a particular
industry, then it give rise to the situation of underemployment (Kawai and Mohr 2020). This
situation is mainly caused due to under or over qualified graduates who are not able to match the
appointment requirements or are over qualified for the role.
Example - Earlier there was less development in the education sector which led to the rise of
unqualified graduates who were not able to complete their education due to personal
responsibilities enforced upon them.
Background search
According to Michael J Boyle, Underemployment is the condition where the skills,
performance and experience of the employees is not able to match with availability of work. The
utilization of the skills of labours are not properly used by organisations in consideration of the
effective labour force. This forces an employees to work in a capacity which does not follow up
with his personal growth and experience. High qualified employees have to work in part time
jobs with less payment and low payment standards. The situation of underemployment forces the
workers or employees to work with low paying which is inconsiderate with their skills and
capability.
The situation Underemployment is caused due to decline of economy with decrease in economic
standards of business cycles and recessions which has majorly affected the employment area.
Underemployment is mainly of two types which is Visible underemployment and Invisible
underemployment.
Visible underemployment is a situation where the employees work for less hours than the
required hors to be worked in a particular organisation. The employees are entitled to work part
time rather than full time which may affect their productivity. This working of part time with
lesser hours may force them to work in other jobs in order to meet their financial needs for
smooth conduct of daily life.
Invisible employment is a situation where the employee is not able to find a suitable job
according to his qualification, skill or experience. This forces the employee to work in the other
area or field of job which does not match with his skill or qualification (Kim and Golden 2022).

Employees have to work in such fields of job which gives them low payment that is much below
his competence level.
There is also a third type of underemployment where a person is not able find a suitable job in
area of his chosen field. This leads to advanced supply of labourers in comparison to demand of
the workers which created a fuss in the field of employment. This situation also affected the
market by getting inadequate supply of productive and skilled workers. The economic condition
of the workers or employees is mostly affected by the situation of underemployment
There are various factors that evaluate the deteriorating situation of underemployment which
majorly affects the economic status and growth of a country. Recession caused a major problem
while appointing the employees in a company (Mihaela, 2020). The declining economic
situation of the company caused the employees to be removed from the company and even led to
the situation of non-payment of salaries or wages to employees or workers. Underemployment
took a rapid rise due to the depriving situation of global market crisis which even dissolved many
businesses with their companies. This outbreak in global market changed the economic condition
of business with fall in business activities. The effective use of technology also created a major
shift in the working structure and pattern of the companies. Automation led to removal of
employees from the field in place of technological development. This forced the companies to
remove extra workforce from the field and make use of technology in an effective way. The
inclusion of technological development has majorly affected the lower class workforce who are
not advanced with the knowledge of technology.
Marketing Strategy
The companies or organisations should use and implement effective strategies in order to
stabilise the market for growth in economy of the country.
There are various strategies that must be enforced to prevent the situation of underemployment
which are mentioned below:
 There must be flexibility in the employment sector by primarily focusing on the
agricultural area which may raise the growth of agricultural output and also contributing
towards the rural and urban areas with adequate opportunities of employment.
 Businesses should invest more in agricultural sector which may increase the employment
rate by supporting farmers with implementation of less interest rates of markets for
productive growth in backward class of farmers.

 There must be more expansion the field of agriculture by laying more attention on
farming of vegetables from growing to its final stage which advances more use of labour
and in turn which may grow the opportunities for employment in agricultural sector.
 The best part about agriculture industry is that it allows unqualified individuals to do the
work of farming. This process includes the work of improving the quality of soil to
growing of crops and vegetables with its supply in the market.
 The employees or workers must be provided appropriate education with effective
training for better results in employment sector.
Impact of underemployment on Business
The devastating situation of underemployment has majorly affected the business cycles
by declining the economic level of company or organisation which in turn has decline the
economic growth of a country (Rambaccussing and Kwiatkowski 2020). The economic
condition of employees has majorly declined which has increased the ratio of poverty in
accordance with inadequate employment opportunities. The situation of recession has drastically
affected the employment rate by hindering the performance of employees with damage to their
confidence in such a way that it may reduce their efficiency of working.
Underemployment has affected the cycle and growth of business in such a way that it has lower
the morale of employees in the following ways which are mentioned below:
 Employees have to work according to the requirements and needs of companies rather
than their own development which affects their personal growth in such a way that their
efficiency for working is reduced at much higher rate.
 The rate of employment has reduced with decline in opportunities of employment which
has led to decrease in economic condition of employees.
The deteriorating situation of underemployment has negatively affected the activity of business
in following ways:
 Inflation of wages – The capability of an employee is affected due to less availability of
vacancies in their aspired field. The unskilled and unqualified role of employees leads to
vacating the positions for required work. This creates the situation of wage inflation in
which there is increase in job availability in comparison to less supply of employees or
workers. So, when there is more demand of work with less availability of workers, the
situation of wage inflation arises. This arise in situation of wage inflation leads to

increasing of wages in order to appoint the right candidate for desired role, which overall
affects the internal system of business.
 Decrease in productivity - When the organisation or company is not able to find
appropriate candidate for desired role due to imposition of less wages then it creates the
situation of hiring unskilled workers which overall affects the growth and productivity of
company. This situation can be improved by giving reasonable or appropriate salaries in
order to control the productive structure of company. The companies can also improve
their productivity level by initiating training of unskilled employees in such a manner that
they may contribute in development of business of the company. The proper training of
unskilled labourers may help in growth and development of the company as well as of the
employees.
The staying of potential employees for a long time is very much necessary for growth and
development of the company. A potential or reliable employees maintains the standard of a
company by executing efficient and productive work (Sage 2019). In today's world, the
availability of different jobs with attractive salary structure may bribe employees to frequently
change their jobs. There are different ways in which companies can keep their potential
employees for long time which are as follows:
 Impactful leadership at workplace – The management of organisation should inculcate
such leadership skills that they are able to mange a whole team with proper co ordination
of employees. Management of the organisation should encourage their employees in such
a way they lead towards developing their professional skills for growth of the company.
They must guide their employees in a proper direction in reference to their career within
the organisation. The relationship between the employees and employers must be so
much in co ordination that they can smoothly conduct their work in a productive way.
 Valuing the employees – The organisation must focus on their employees in such a way
that it is able to meet every need of employees. The organisation must be able to take care
of the personal and professional needs of employees in such a way that they feel valued
and appreciated by the organisation. The guidance of employees on the correct path will
enable them to be engaged with the organisation.
 Building a peaceful and positive environment – The working pattern of the
organisation should be flexible in such a way that it gives sufficient times for refreshment

and rejuvenation (Valiente-Palma and Pérez-González 2022). The involvement of various
activities with peaceful environment may help in keeping the employees for longer time.
Constraints that create the situation of underemployment
There are various constraints that creates the situation of underemployment which are
mentioned below:
1. Arranging of finance – The irregularity in the flow of cash with inadequate budget deals
affects the financial situation of business in a very negative way. The rise in interest rates
of market restricts the expansion of business in such a way that its affects the economic
growth of a company. The risk in liquidity with imposition of high rate of taxes affects
the management of finance with adverse change in the financial conditions.
2. Finding a location – The mechanisms that are involved in building a business affects
employment in such a way that it restricts the growth of business. The location of urban
and rural areas affects business by restriction certain obligations in relation to
transportation. The rise of skilled and qualified workers in urban areas affects
employment with decrease of opportunities in rural areas due to less qualified employees
in rural areas.
3. Government approval – Government should contribute by growing the agricultural
sector in such a way that employees of rural areas are able to get various opportunities in
their own areas. This will allow the employees to work in their own areas rather than
migrating to different or urban areas in search of employment. This will allow more and
more people of the rural area to get various opportunities in their own areas.
4. Resistance from local business – Business should be expanded in such a way that it
reaches thousands of employees in order to grow and expand the opportunities of
business. They should restrict and limit the approach of local business in order to extract
more opportunities and talent from industrial urban areas. This will enable the
appointment of right candidate with required skill for job.
5. Resistance from local people – There must be restriction of local people in order to
allow talent from developed areas to contribute towards the growth of business. The
unavailability of infrastructure with lack of effective skill or labour may hinder the
growth of business (Zhu and Chen 2022). The limitations with restrictions in employment

opportunities and fewer access to training and qualified workers majorly affect the rate of
employment.
CONCLUSION
From the above report it is concluded that Underemployment is the situation where
employees are not able to work according to their acquired skill and qualification. When
employees are not able to work according to their capacity or organisation is not able to give
appropriate training in accordance with role of job, then it creates the under-employment. The
main cause of under-employment is decline in economy which affects the growth and
development of business. Recession is also one of the major cause for underemployment which
has created a hindrance in growth of business. The decline in economy with recession has also
unemployed many employees with less opportunities of employment. The main objective of
under-employment is to remove the problems of employment by providing sufficient access and
means for development in employment sector. This has led to improvement in skills of workers
by providing them appropriate training with complete knowledge of work to be done by
employees. Government also plays a major factor by providing sufficient opportunities for
employment in order to have an effective workforce. It is also a situations which leads to
mismanagement of skills of employees in accordance with requirement of work. There must be
use of effective strategies for management of marketing in industry. The marketing strategy
should be so effective that it eradicates the problem of under-employment. Business have been
affected majorly due to the situation of under-employment which has caused inflation of wages
with decrease in productivity of employees. This situation of underemployment can be improved
with management of economy which may help in growth of business by training the employees
in an efficient manner and enhancing the skills and performance of employees in such a way that
it may help in growth and development of company with rise in its economy.

REFERENCES
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