Every employee will be happy until they find something better, no? I mean I guess sure one could make a valid rebuttal that "overqualified" people are probably working on less borrowed time, if we take the metaphor all the way to the end of the line, right?

But I guess where I'm finding myself endlessly perplexed is the default assumption you're describing (and I'll gladly offer a concession to), versus the alternative of overqualified employees being seen as potential force multipliers for increasing productivity by allowing them to use their additional qualifications via some kind of tract towards management or specialized role? Even if it's on a small team?

Bob is overqualified for X, yet exceptional at Y. X+Y just happens to be a thing the team could possibly benefit from, helping the company as a whole. Maybe we should think about hiring Bob and grooming him to take ownership of X+Y and stewarding the rest of the team, helping them learn and become masters of X+Y in due time.

Does that make sense?

Hopefully the phrasing isn't too god awful there, coffee hasn't hit the lower brain yet :P

I had the luck of being overqualified for my first job, straight out of college. I did X (CAD), but I chose my career because I wanted to be a developer. I did Y (sysadmin) because I showed my employer that I could do more. For half a year I did X+Y for the salary of X because I was young, optimistic and eager to please... until they hired a real sysadmin because surely he could do Y better than someone who does X and Y on the side.

From this I learned that being overqualified is a risky proposition. Even if your team appreciates the added value, your company might have other plans. I believe it's better to tighten your belt and wait for a more suitable opportunity than risk hurting your career growth.

BTW, your phrasing is perfectly fine. Try to read mine.