Overqualified Employees’ Actual Turnover: The Role of Growth Dissatisfaction and the Contextual Effects of Age and Pay

Overqualified employees are those with more knowledge, skills, and abilities than their job requires. While these competent workers can bring benefits to firms, they also pose a high risk of turnover. However, the evidence is insufficient on whether, why, and when they actually leave and how organizations can manage their turnover effectively. Based on self-determination theory, we propose that unfulfilled internal aspirations for personal growth can be a major driving force of turnover among overqualified employees. Moreover, we explore how such a mechanism varies by employee’s age and whether pay can exert a mitigating influence. Using longitudinal data over three years (from 2017 to 2019) with a large sample of workers (N = 2473), we found an indirect effect where perceived overqualification reduces growth satisfaction, which in turn leads to actual turnover. Further, we found a three-way moderating effect of pay and age on the relationship between growth satisfaction and turnover, indicating that pay’s effect of deterring turnover was stronger for older employees. This study has theoretical implications for a better understanding of overqualified employees’ turnover driven by their internal impetus, as well as implications for pay policies that effectively manage overqualified workers in age-diverse modern organizations.