What are the private, public and nonprofit sectors—and which one is right for you?
Most students and recent graduates already have an idea of whether they’d like to work for a private, public or nonprofit organization. But many young professionals don’t actually understand the differences between the three, or know which one is the right match for their career aspirations and skills. Here we summarize each sector and highlight its greatest advantages, to help you figure out which one is best suited to your goals!
The private sector is driven by revenue and growth. For this reason, salaries can be impressive—particularly at the top of the corporate ladder. On the flip side, employment is considered less stable and secure. If revenue suddenly drops, private companies often respond by cutting back the workforce to reduce expenditures. In this sense, employment in the private sector offers high risk and high reward.
The huge breadth of careers in the private sector means that companies vary greatly, but in general there is greater opportunity to earn a high salary and receive promotions. The working environment is considered more demanding than that of other sectors, as employees are often required to go above and beyond their ordinary list of responsibilities to drive growth for their departments. Many companies have an “Up or Out” policy, meaning that if you fail to grow, you will likely be asked to leave.
Private sector jobs
Small business owner
Private sector organizations
Advantages of the private sector
Higher earning potential
Less red tape and faster decisions
High levels of responsibility
Focus on innovation
The wide range of opportunities available in the public sector reflects the diversity of the sector itself. In a nutshell, public employment refers to jobs that contribute to the effective running of a country at a local, regional or national level. This requires administrators from a vast array of disciplines, from economists and policy analysts to scientists and communication specialists. The public sector is not revenue-driven, and salaries are funded by taxes. Organizations in this sector are generally quite rigid, with lots of policies and procedures to follow.
People often think of public sector employment as less stressful, more secure and more flexible than private employment. On the one hand, there are great retirement and health benefits, and high job security. But the sector is not completely protected, and countries undergoing economic hardship often have to cut public sector jobs and reduce pensions. If the economy is stable and growing, however, it’s likely that the public sector will experience similar growth and stability.
Public sector jobs
Public sector organizations
The White House
Environmental Protection Agency (US)
Houses of Parliament (UK)
Foreign Office (UK)
Advantages of the public sector
Flexible working initiatives
Attractive retirement and healthcare benefits
Lower turnover rates
The nonprofit sector is separate from both the public and private sectors, but it may collaborate with either of them at any given time. The main purpose of an NGO (non-governmental organization) is to help the public in some way, so profit is not a governing factor. The organization must seek a balance between expenditures, time and expertise in its charitable initiatives, while making sure there are enough funds to keep working. This means that organizations aim to be lean, flexible and creative. Although compensation may be lower than that of other sectors, there is great opportunity for employees to develop their skills and take on more responsibility.
There is a general notion that compensation is comparatively low in the nonprofit sector, as any profits should in theory be redirected back to the organization’s charitable goal. However, remuneration for top positions at many NGOs and charities is high, reflecting the level of responsibility and skills required to lead these entities. In some cases, the CEOs of certain charities can even earn six-figure salaries.
Director of Operations
The Red Cross
Doctors Without Borders
Advantages of the nonprofit sector
Make a positive difference
Develop a diverse skill set
Gain greater cultural awareness
Learn to be creative and flexible with limited resources