29/07/2013 09:08 BST | Updated 24/09/2013 06:12 BST

Tackling Underemployment

Earlier this month the TUC released a report which found that nearly 80% of the 587,000 new jobs created have been in low-paying industries, as workers have been forced to take lower-paid jobs after being made redundant. With reports and figures like these and the latest controversy over zero hour contracts, the phrase 'underemployment' has begun to make its way into the mainstream. The generally accepted definition of this term is someone who is in work but not doing as many hours as they ideally would wish or need to.

This is a particular problem for young people, with the National Institute Economic Review indicating that 30% of those aged 16 - 24 said they wanted to work longer hours.

However, I would widen this definition to encompass anyone who is in work but not working at the level they want to be. This extends to parents returning to work, who may take on more junior or administrative positions in order to take advantage of the reduced or flexible hours (for instance, many capable women end up throttling back their ambitions to fit in with their family commitments), or people who end up adopting a 'work, any work' mentality after being made redundant. These individuals may take less hours or a more junior role in order to keep money coming in when they find themselves 'in between jobs'.

Underemployment is also a problem for graduates who are working in low-skilled roles - new statistics from HESA indicate that more than a third of new graduates are working in 'non-professional jobs'.

Whilst there is absolutely nothing wrong with graduates, returners to work or people seeking employment after being made redundant getting some experience in any field of work - helping to bolster their CVs and develop important day-to-day, transferable skills that can only be acquired from experience - it is a worry for individuals, organisations and the economy that people are not reaching their full potential.

If an organisation does have staff members who feel that they are currently underemployed this is not just a problem for the individual but for the business as a whole. Not only are these employers missing out on their employee's full potential, but they will also be seeing lower engagement from their underemployed staff and a higher staff turnover rate as these employees begin to look elsewhere for the roles that will give them the hours and responsibility they are looking for.

But what can be done? Businesses can take action to tackle underemployment, by offering employees keen to work more hours extra work when available and looking at opportunities to increase headcount when there is an upturn. It's also important for these businesses to encourage a culture where managers and employees understand the value in having effective and regular career conversations to help staff identify what their ambitions are and how the company itself can help them to reach their potential. Such organisational changes will benefit businesses, as well as employees by leading to increased productivity, engagement and a widening skills base.

Given stagnant economic conditions, many organisations - across both the public and private sector - are unfortunately still facing the issue of redundancies. Where this is the case, it is important to put in place proper outplacement systems, allowing employees to transition from one job to the next with less anxiety and less time away from the workplace. Businesses who do so will benefit from better employee morale and productivity, protected organisational reputation and improved retention of remaining staff. For many public sector roles, employees may struggle to see how their skills could be transferable to the private sector, so there are certainly actions to be taken around giving people the skills and confidence to apply for new roles in a different sector.

Britain's underemployment rate is inextricably linked to the economic climate. When businesses begin to feel more confident, then we will see continued job growth. Meanwhile, employees and job seekers need to boost their skills where they can, and think about both short- and long-term career management strategies.