Recent poster reminded me of this, and… In case you hadn't figured it out before, that term is just an asinine excuse that means the company knows you're too good and can go anywhere at any time.
So, yes… Companies don't like to hire people they can't control.
And I say this as both an ex “overqualified” employee, and now a business owner myself.
Pro-tip… If you WANT a position, downgrade your curriculum accordingly and don't stand out TOO much in the hiring process.
Learnt this after I got hired by one of those mega international companies with mass recruiting and training process. I was the only one to ace every test at the first try (most people barely got a passing mark by the third), I was the fastest and most precise in the practical testing, and out-performed everyone of the new recruits three days straight. Got fired in the fourth before even starting my shift for, and I quote, “No specific reason”.
Never missed, only got late by 15 minutes once, and followed every rule.
Sure that does play a role in fearful incompetent management pyramids, but… That's a matter for another time.
So, yeah. I have come to love the new term rolling around: “Act your wage”. Nothing more, nothing less…