Economic Development, Education, and Nonprofits

Nonprofits look to accommodate millennials

Johnson Center report predicts generation will make up more than half of workforce this year.

January 31, 2020
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As millennials have become the largest sector of the workforce, nonprofits are working to accommodate changing attitudes and the resulting need in workplace change. 

New research by Teri Behrens and Tory Martin of the Grand Valley State University Dorothy A. Johnson Center for Philanthropy shows nonprofits are succeeding in changing with the times in some areas but struggling in others. 

This year, millennials — typically interpreted as those born between 1981 and 1996 — are predicted to make up more than half of the U.S. labor force for the first time, while baby boomers make up about a quarter of the workforce, the report cited.

While millennials are used to trying to counteract negative stereotypes, some of which have stronger research support than others — well-done research has shown narcissism and high self-esteem are more prevalent than in previous generations, Johnson Center said — millennials typically are working harder to pay off loans and afford to start families. 

Millennials want that work to offer more than just a paycheck, which is an opportunity nonprofits could harness. 

“One of the key pieces of millennial generational wisdom is really that there's much less of a difference between the home life and the work life,” Martin said. 

Just as millennials like to support businesses and organizations that invest in some way in social causes, they like to give their time to workplaces that do the same, she said.

“They want jobs that they find meaningful,” Martin said. “They don't see much reason in going to work if they don't see the value of the work that they're doing.”

This means millennials think about engaging in charitable work both as professionals and as members of society, leading to some blurring of the boundaries between sectors. Because of this, as more for-profit companies emphasize social outcomes, the research warns the nonprofit route may actually be less attractive based on salaries and benefits.

Though millennials want to do meaningful work, they also value flexibility and a good work-life balance. They want workplaces that measure productivity in output rather than hours worked or physically in the office. They may even be willing to trade higher pay and faster advancement for more flexibility.

They’re also attracted to workplaces that commit to professional development, ongoing and transparent feedback, and cross-generational mentorship. They prefer close contact with their managers, thinking of them more as coaches rather than bosses.

Since it changes jobs more frequently, the nonprofit sector, which already struggles with a lack of skilled leaders and high turnover rates, will have to re-examine how it thinks about talent development and retention, the research warns. 

The most recent U.S. data shows the nonprofit sector employs 12.4 million workers, 10.2% of the U.S. workforce overall and equal to the number of manufacturing workers. 

The millennial generation is the most diverse in the history of the country — 56% of millennials are white versus 72% of baby boomers, Johnson Center noted. The U.S. population as a whole is expected to hit majority minority status by 2045, the study cites. 

Increasingly heterogeneous generations are requiring that workplaces of all kinds evolve, and philanthropy is no exception. While nonprofit leaders are well aware of this, there’s not enough progress in diversifying the sector, Johnson Center said. 

“There's talent competition in every sector, but there certainly is a very strong trend within nonprofits to focus on additional ways to support people of color entering the workforce, especially,” Martin said. “We've been focused on this for a couple of decades and, frankly, haven't moved the needle significantly yet.”

Hiring and retention can mitigate this stagnation, and some organizations are looking to open the doors wider by focusing on entry points. 

“I think it's a natural progression as society becomes more open and inclusive and realize that there's natural unfairness and then there are also increasingly louder voices saying this is something we have to fix,” Martin said.

Increasing the availability of paid internships and apprenticeships is one way to make the sector more easily accessible to everyone, Martin said. People of color, especially, report that unpaid internships and low-salaried jobs are barriers early in their careers and challenging to their retention and advancement.

“If those internships are unpaid or are burdensome in other ways, then that kind of cuts off a significant portion of the potential workforce for people who can't afford to do that on their own, who can't afford to take unpaid jobs,” Martin said.

A solution to this could be expanding the use of competency-backed hiring practices, which have been shown to result in greater diversity in hiring, increased talent retention and improved overall performance, Johnson Center said. 

Martin highlighted Talent 2025, West Michigan Works! and Mercy Health Saint Mary's as organizations that have implemented such hiring practices.

From there, nonprofits need to take steps to create better and clearer pathways into leadership positions if they hope to retain employees. 

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