The problem of underemployment in the United Kingdom was examined in two studies. The first study sample, which was selected to be representative from the standpoints of firm size, 8 business types, and the United Kingdom's 14 economic regions, included 474 recruiters. They were interviewed by telephone regarding their recruitment problems. In the second study, qualitative interviews were conducted with 30 employers and various recruitment agencies, outplacement consultants, and graduate career advisors. One-fourth of the medium and large firms considered overqualified applicants a problem. Employers offering relatively low-level or unskilled jobs stated that they receive large numbers of applications from university graduates and even postgraduates. Recruiters often expressed reservations about hiring graduates for low-level positions out of fear that they would demand more money, faster promotion, and more interesting jobs than less qualified applicants would. Career consultants reported that some employers use overqualification as an excuse for rejecting mature applications, whereas other employers fear that experienced applicants will want more money, more responsibility, and quicker promotion. Career consultants also stated that people who have been downsized often apply for unsuitable jobs out of desperation and that employers sometimes attract unsuitable applicants through hyperbolic or vague advertising. (MN)