What Is Underemployment? Meaning, Types & Impact in India
Book a Free DemoUnderemployment
When an employee works in a role that does not fully utilize their skills, qualifications, or availability. Underemployment can impact job satisfaction and career growth.
Underemployment happens when an employee works in a role that does not fully utilise their skills, qualifications, or available working hours. It can also refer to situations where workers take lower-paying jobs than they are qualified for or work fewer hours than they want.
In India, underemployment is common among fresh graduates, skilled workers in rural areas, and employees affected by economic slowdowns. It impacts career growth, job satisfaction, and overall earning potential — making it a key concern for HR and policymakers alike.
💬 “By using Pagarai’s skill mapping tools, we were able to reassign underemployed staff to more suitable roles.” — Manoj, HR Operations Lead
👉 Want to identify and reduce underemployment? [Get Pagarai’s skill gap and role alignment toolkit →]
Types of Underemployment
| Type | Description |
| Skill Underemployment | Working in a role below one’s qualification level |
| Time-Related Underemployment | Working fewer hours than desired |
| Wage Underemployment | Earning less than the market standard for one’s skills |
Bonus: Regular skill gap analysis and internal mobility programs can help Indian companies address underemployment.
Why It Matters
- Affects employee morale and retention
- Leads to lower productivity and skill utilisation
- Reduces earning potential for workers
- Indicates inefficiencies in workforce planning
- Impacts national economic productivity
Common Tools for Addressing Underemployment in India
- HR analytics platforms for skill mapping
- Internal job boards for role reassignment
- Pagarai HR Suite – for skills assessment and career development tracking
How Pagarai Helps
- Identifies skill mismatches using employee data
- Suggests suitable internal opportunities for underemployed staff
- Tracks employee upskilling and reskilling progress
- Integrates career development with performance management
- Provides reports to optimise workforce allocation
FAQ
Q1: Is underemployment the same as unemployment?
No — underemployment refers to being employed but not fully utilising skills or time, whereas unemployment means having no job.
Q2: Which sectors in India face high underemployment?
Education, agriculture, retail, and certain service industries.
Q3: Can upskilling reduce underemployment?
Yes — training employees for in-demand skills improves job alignment and career growth.
Q4: Does Indian labour law address underemployment?
Not directly — but government programs like Skill India aim to reduce it.
