The Young and the Restless: Generation Y in the Nonprofit Workforce

The ability of nonprofit organizations to attract and retain the next generation of its workforce will play an integral role in the growth and vitality of the sector. Management literature provides a number of suggestions to nonprofit managers of how to enhance noncompensation related job characteristics in order to attract and retain a young workforce. Yet, this literature ignores the fact survey research indicates that Generation Y employees value compensation and non-compensation related characteristics differently than previous generations. Before management changes are proposed and implemented by nonprofit managers, we must first understand how the nonprofit sector compensates Generation Y employees. This study enhances our understanding of wage differentials by using data from the 2005 American Community Survey to examine a sample of 36,000 young, educated employees both within and across nonprofit, mixed and for profit industries. My findings indicate that the wage equity experienced by minorities and females found in previous research, is not consistent when comparing nonprofit and mixed industries. Additionally, one of the most notable findings (not discussed in previous research, but likely relevant to this sample) is the differences in earnings of employees with advanced degrees (Masters Degree and beyond). Employers in for profit industries are better compensating young employees who hold advanced degrees.