In my last position in the nonprofit workforce, I remember frequently talking to colleagues about our financial struggles. Despite working in a small human services nonprofit with few resources, we loved our jobs. Unlike many places I had worked in the nonprofit sector, within this particular organization the majority of staff members were under 30. In that same organization, turnover was high, with many of the staff leaving after a year.
Yet, most of the employees were not leaving to go to other nonprofit jobs. They simply decided that the financial costs of committing to the nonprofit workforce were not worth it. Many went to work in for-profit companies, and although some had social missions most did not. These personal experiences served as the impetus that led me back to school to obtain my Ph.D.
With those ideas in mind, I recently conducted a study examining Generation Y employees in the nonprofit workforce using the members survey many of you completed for YNPN in 2011. I combined this study with insights learned from an earlier study and investigated the relationship between compensation and the sector switching propensity of young people, comparing them to their Generation X (born between 1961 and 1981) counterparts.
I focused on sector switching as there are costs to both the vitality of the nonprofit workforce and the ability of nonprofit organizations to continue providing some of our nation’s most critical public services. I was interested in contributing to a more nuanced understanding of how the nonprofit sector could retain young people as studies on this topic to merely describe what proportion of the population wants to leave their job. There are few studies that predict what factors contribute to turnover and sector switching.
I began researching the literature and hypothesized that compensation would affect young nonprofit employees differently than other generations for several reasons. First, the nonprofit workforce has historically been composed of part-time employees. However, the sector now demands a professional workforce and many Universities have responded as demonstrated by an increase in the number of nonprofit education programs. Generation Y employees are also growing up at a time when there is a great deal of sector blurring. Employees no longer feel that they can only “make a difference” in the nonprofit sector. In the Trachtenberg School of Public Policy and Public Administration at the George Washington University, where I teach, about a third of our graduates enter the for-profit, nonprofit, and public sectors. Finally, the notion of what a career is, has changed. Employees of all generations recognize the limitations of commitment to one employer for the entirety of their lives. Instead, a career is thought to be made up of several job changes (sometimes even lateral moves) in order for employees to gain the skills and knowledge they desire.
In this study there are six key findings:
- A high proportion of Generation X and Generation Y nonprofit managers plan to sector switch
- Salary does not affect the propensity of Generation X employees or managers to sector switch
- Salary does not affect the propensity of Generation Y employees to sector switch
- Salary does affect the likelihood that Generation X managers sector switch
- Perceptions of compensation equity (comparisons to peers) does not affect the propensity of Generation Y employees or managers to sector switch
- Generation X managers are unlikely to sector switch if they perceive their compensation is equitable to peers in other sectors
Another surprising (or maybe not so surprising) finding is that for Generation Y managers, but not Generation X managers, holding an advanced degree increases the likelihood that they will switch sectors. So what does all of this mean? For me, I have a few more insights about how to move forward in future research. First, money matters for Millennials, and there are hundreds of explanations as to why it would matter for their generation’s commitment to the nonprofit sector but not previous generations; yet, existing data does not allow me to test those ideas. Second, and most importantly, nonprofit managers can use this research to have honest conversations about turnover, sector switching, and what can be done to retain employees. More broadly, your membership in YNPN plays a vital role in continuing to advance these discussions and the time you take to complete the member survey matters!
NOTE: As all academics will attest, particularly those of us in more applied fields, we are terrified of our academic writing never impacting practice, and more honestly no one reading the work we spend our lives doing. Although I am looking forward to 1) people reading this blog and 2) the comments it ensues, I also want to make it clear that beyond what I explain above the data does not allow me to say more, beyond speculation.
Jasmine is the Assistant Professor at The George Washington University, Trachtenberg School of Public Policy and Public Administration. She can be found on twitter: @Prof_McGinnis
 McGinnis, Jasmine. (2011). “The Young and Restless: Generation Y in the Nonprofit Workforce.” Public Administration Quarterly, 35 (3), 342-362 http://www.spaef.com/article/1288/The-Young-and-Restless:-Generation-Y-in-the-Nonprofit-Workforce