A Case for Unpaid Internships

Unpaid Internships

 

A recent ruling on the illegality of unpaid internships has caused countless HR Departments to rethink their policies. The ruling states that for profit employers must pay a minimum wage to interns unless they pass 6 criteria of the Department of Labor.  Unfortunately, I think this could end up hurting job seekers in the long run as companies ditch internships altogether to avoid legal trouble.  Experts are already saying that a sharp rise in unpaid internship lawsuits are already popping up according to the LA Times.

Many critics have expressed their disdain for the unpaid internship in the past.  Take Gawker editor, Hamilton Nolan’s post, Internships Don’t Need to Pay, As Long as You’re Rich, which is more of a highly emotional plea devoid of any real reason whatsoever, or Ross Perlin who authored Intern Nation, and readily admits to introducing the plaintiffs to the lawyer who brought the lawsuit to court with Eric Glatt and Alex Footman as plaintiffs.

As the resident career expert here at JobKaster, I routinely advise job seekers to take advantage of internships.  Hell, I’ve even mentioned it in my last post, Help Me Find A Job | The Most Epic Guide in History.  In a tough hiring environment where employers are routinely citing a lack of experienced candidates, internships have gained many a foothold in an organization that wouldn’t have been the least interested if the candidate had walked in with a blank resume.

Why Do Employers Have Internships

The true value to employers is not the short term gain of the intern doing whatever work is assigned to them.  Internships should be used as a recruiting tool for employers to find and attract the best talent.  Through the internship program, employers can find and develop top talent and also weed out the bad apples.

Paid vs. Unpaid

In paid internships, interns typically have a higher degree of skill and provide some benefit to the employer (e.g, Engineering Interns).  The employer provides relevant experience, development and training, networking opportunities, and a chance for the intern to develop a better understanding of the field and work.

In unpaid internships, interns typically do not yet have the skills to produce tangible results.  Employers still provide the same benefits above, but training and development becomes more of a focus; although, it could still include some menial tasks such as filing, copying, etc.  Unpaid internships can actually reduce productivity for the employer, as they train and develop the interns.

According to the Department of Labor, unpaid internships must pass these 6 criteria:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.
  2. The internship experience is for the benefit of the intern.
  3. The intern does not displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.
  5. The intern is not necessarily entitled to a job at the conclusion of the internship.
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

The “rules” above are highly debatable and will cause many employers to terminate their internship programs altogether. Hopefully, the majority choose to switch to paid programs, but this is highly unlikely in some cases.

It would be great if all internships were paid, but the truth is that internships are already costing employers money in lost time and resources training and developing these short term hires.

Note: While “for-profit private sector” employers are bound by this loosely translated criteria, non-profits and government agencies are free to use unpaid interns with no abandon.

Compensation vs. Value

Under the rules of the law I clearly understand why this debate it taking place, but what Nolan and Perlin are failing to note is that the argument shouldn’t be about paid vs. unpaid internships.  It should be about compensation vs. value.

Furthermore, Nolan and Perlin are really saying that these interns are too stupid to realize the difference between a crap job and a real opportunity and have to be protected from themselves.

Like any job, an internship has to be evaluated based on value.  Compensation is only a small part of that equation.  The real value for the intern is experience, expansion of their network, referrals, and of course a brand to put on their resume.  I think students are well equipped as adults to decide whether the internship opportunity is of a great enough value to commit their time and resources or to take another route.

What Value Should an Internship Provide to the Intern

When you are searching for an internship, you have to think about the value that you will get out of the experience.  It is your responsibility to evaluate the opportunity.  First, you should think about what the internship should provide for you:

  1. Relevant Experience – Internships provide relevant experience to your field of study.  Top internships should provide a project that you can put on your resume that will impress future employers.  Experience is one of the top values you can gain from an internship to help you transition into a career after graduation.
  2. A Job Opportunity – The true hallmark of a great internship is the opportunity to find a job at the company after graduation.  Find out how many interns the company hires per year.  Then, work hard to impress your employer and show them that you would be a valuable addition to the team.
  3. Networking Opportunities – In lieu of an actual job, networking is your biggest goal in the internship experience.  Don’t just hang out with other interns.  Go to lunch with a employees at all levels of the organization at least once a week.  If possible, go to lunch with someone different every day.  Meet as many people as possible.  Networking is the #1 way to find a job.
  4. A Taste of the Workplace – Internships give you a chance to evaluate your career choice.  You will never have this chance again to test drive a career to see if it’s the right fit.  Unless you know exactly what you want to do for the rest of your life, do internships in different fields to get a taste of what life will be like if you choose that career.

The true value in an internship is a head start in the job market.  You now have more experience than your competitors, you know more people, and you’ve actually proven that you can do the work.  If you’re internship doesn’t provide these opportunities, I suggest you do something of higher value.

A Case for Unpaid Internships

If you noticed, I not once noted compensation as a reason to take an internship.  Of course it helps, but an internship’s true value lies in: relevant experience, job opportunities, networking, and the career test drive.

Now, the top performers are working to be accepted to the top internships in the nation.  These internships are paid, provide tremendous value, and have the Brand to boot (Google, GE, PricewaterhouseCoopers).

What about everyone else?  Just because they weren’t able to join one of the top internship programs, doesn’t mean that they should be left out.

Here is where unpaid internships come in… It might not be at a Fortune 500 company, but maybe it’s a lesser known company.  These companies have a cost in running an internship program.  Instead of money, you are being paid in experience.  Your wages are essentially going to the mentors and coworkers who will be taking time away from their regular duties to help guide you on your internship journey.

This was the point of the unpaid internship anyway.  To provide real value to students through a real world apprenticeship.

Three Students, Three Options:

Three students looking to get into film are searching for a summer internship at Fox Searchlight Pictures.  Which one would you hire?

Student 1 – “Jane”

Jane is actively involved in the student film association, has a 4.0 GPA, and has been searching for the right internship since her sophomore year in high school.  She has been using LinkedIn to network with Fox Executives and has even had lunch with three Fox employees.  She applied and was accepted to a paid internship where she managed all of the extras and props for a set of a blockbuster film.

Student 2 – “Sam”

Sam is also in the student film association and has a 4.0 GPA, but he didn’t start looking for internships until the last minute.  He figured his Dad would find him something.  After all, his dad was in the movie business.   Sam got an unpaid internship opportunity fetching coffee and making copies for a production assistant.  Sam wasn’t happy about the job, but he thought it would be good to have the name on his resume.

Student 3 – “Jack”

Jack is in the student film association, but he doesn’t remember the last time he went to a meeting.  He has an average GPA.  He actively searched for internships all year, but was not accepted to any paid programs.  He did receive an opportunity for a unpaid internship fetching coffee and making copies for a production assistant, but he decided that the value just wasn’t there to justify his time.  Jack decided to go back home and get a job in retail for the summer.  Over the course of the summer, Jack decided to make a series of short films to build his portfolio in lieu of the internship.  He posted them to YouTube and attracted over 1 million hits.

Which one of these students would you hire?

Sam, didn’t really get any relevant experience, but he was able to make some contacts in the industry.  Jane gained a ton of experience, impressed her bosses, and was offered a job pending the completion of her coursework.  Jack on the other hand, didn’t even look for a job after graduation.  He had already received multiple offers.

Only the Rich

Nolan would still argue that unpaid internships favor the rich.  He might be right… But that’s life.  You could also say that the rich already have a network, so why do they need an internship to begin with?  Perhaps they’ll get the job over you anyway.

Personally, I’ve never had the opportunity to complete an internship.  I worked at an oilfield company, delivered furniture, and sold and installed car stereos to pay the bills when I was in college.  After college, I worked offshore in the Oil and Gas Industry.  I paid my dues then moved into a Project Management role at GE.  Now, I am in Business Development for another oilfield company.  It took me seven years to get where I wanted be, but I made it happen.

Luckily, truly successful people never let circumstances get in their way.  Hardships may have been fought along the way, but they always found a way to make it work.  For example:

  •  Howard Schultz (Starbucks Chairman and CEO) – Schultz grew up in the Canarsie Projects in Brookly, and his father drove a taxi and worked as a delivery driver.  Howard made it through college on a sports scholarship, got his first job in sales at Xerox, and ended up working his way up to CEO of the most iconic coffee companies in the world.
  • John Paul Dejoria (John Paul Mitchell Co-founder and CEO) – Dejoria worked his way out of homelessness twice before founding John Paul Mitchell with only $700.
  • Larry Elilison – (Oracle Co-founder and CEO) – Larry Ellison was adopted and did not have any family connections or come from money.  He dropped out of college twice.  He eventually found a job and his calling.  He went on to start Oracle with two others and is now one of the top 10 richest men in the world.

Should I still get an Internship?

Of course!  Just make sure that the value is worth the effort.  Don’t take the first thing that comes along, and treat it for what it is worth, a long lasting career decision that has to be treated with the utmost care.

 

 

 

About Paul Chittenden

JobKaster Co-Founder & Resident Career Expert

2 Responses to A Case for Unpaid Internships

  1. Valentino Martinez June 30, 2013 at 3:57 pm #

    The only exception for an unpaid internship is an employer who truly cannot afford to pay for one. However, the moment they can pay for that internship THEY SHOULD PAY for that internship. Why? If an employer has any self-respect for their brand they should be reminded that college interns are invested in getting on with their career trek. And along the way they are going to remember their interfaces with those employers they come in contact with.

    Good – Bad – or Indifferent – those internship experiences will be indelible and will bring forth mini-ambassadors and mini-critics. So show some modicum of respect for the intern who, by in large, is not a complete idiot. Their sweat equity has value, particularly if the employer knows how to manage and leverage their work effort. Pay your interns – challenge and grow your interns and reap the adulation for the partnership. Don’t pay them, or short-pay them – give them mundane jobs and reap the caustic reaction for a time wasted and an experience that wounded a relationship that had such potential to be valued.

    • Paul Chittenden July 19, 2013 at 3:28 am #

      Valentino,

      I agree with you in some respects. If you are interning for a Fortune 500 Company, then by all means, I would expect the internship to be paid. I would also expect their to be an actual internship program in which interns are developed according to a predetermined plan.

      Interns will remember their time spent at a company, and it may shape their outlook of said company for the rest of their working careers.

      But what is the value that the intern is getting out of the internship. This is the most important thing. I would much rather take an unpaid internship in my target industry where I had personal contact with the CEO and senior management team for a job in which I learned about this business and built relationships that would help me find a job down the road rather than a paid internship where I was one of 50 other interns doing rather mundane work all day.

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