Internship program dividends: grooming young talent can yield results for employers and participants

HR Magazine, Jan, 2006 by Dawn S. Onley

Students may think of internships as a way to acquire professional skills while earning some money in the process. But employers often view their student interns as potential new hires who are worth cultivating, and these organizations see their internship program as a way to create a cadre of young workers who already know the company.

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"Interns are a pipeline of full-time talent," says Steve Pollock, president of WetFeet Inc., a San Francisco-based research and consulting organization that specializes in talent recruiting. "The market for campus talent has gotten much more competitive."

In fact, a student recruitment report released in July by WetFeet found that campus recruiting was more competitive in 2005. The average number of internship offers received by students at top-tier universities jumped by 18 percent for undergraduates and 11 percent for MBA students compared to 2004.

The research also found that students overwhelmingly view internships as critical to their career plans. Of the 2,653 students who responded to the WetFeet survey, 79 percent felt a good internship was essential to meeting their long-term career goals, up from 76 percent in 2004.

While internships give students an opportunity to learn valuable skills that often translate into full-time employment, they also provide employers with the perfect avenue to test a student's contributions in the workplace. A well-run internship program also can deliver long-term rewards for a business: Many employers report higher retention rates among employees who began as interns.

Interns Wanted

Employers look for the best and brightest students in a variety of ways. In addition to attending college fairs and using campus career centers, some employers sponsor student groups, work with alumni associations and hire on-campus representatives to identify potential interns.

At Booz Allen Hamilton Inc., a consultancy based in McLean, Va., the company takes a targeted approach to its search for interns, holding a series of career fairs and recruiting interns from 13 colleges and universities up and down the Mid-Atlantic region. The firm, which mostly draws students majoring in technology and engineering fields, also finds some interns through an employee referral program.

In the summer of 2005, Booz Allen had 175 interns, up by 10 from the previous summer. The company usually makes offers to about 35 percent of its graduating interns.

"What employers are looking for is someone with very raw experience," says Julie Martin, manager of Booz Allen's federal sector. "The overall goal is for them to be extremely open to learning tasks."

In an effort to get interns up to speed quickly and ease their integration into the work environment, many companies provide training and orientation on issues such as the organization's rules on dress, behavior, ethics and technology use.

The high value employers place on the work interns do is reflected in the fact that four out of five are paid for their efforts--often handsomely.

WetFeet's study, managed by independent market research firm Q & A Research of Novato, Calif., found that the average salary offer for internships was $638 per week for undergraduates, with an average signing bonus of $302. For MBA students, it was $1,473 per week, with an average signing bonus of $693.

Booz Allen pays its interns between $11 and $18 an hour, depending on the student's major and whether he or she is in the undergraduate program or part of the MBA internship pool. The company uses data from two surveys to gauge competitive compensation rates in the marketplace, while also taking into consideration cost-of-living expenses, Martin says.

Interns who are not paid--about 20 percent of all interns, according to WetFeet's Pollock--usually earn college credit for their work.

Organizations that have unpaid interns, known as learners or trainees, must adhere to the Fair Labor Standards Act (FLSA), a federal law that sets workplace standards on wage and overtime requirements, among other things. The Department of Labor has compiled a list of criteria to help employers determine whether a student intern is considered an employee within the meaning of the FLSA. In essence, the work being performed by an unpaid intern should be a part of the student's college curriculum and should primarily enhance the student's skill set in much the same way conducting college lab work does.

The Washington Center for Internships and Academic Seminars, an educational nonprofit that places student interns with thousands of organizations in government, business and the nonprofit sector in the Washington, D.C., area, enables students to earn up to a full semester of credit for their work.

"We encourage all our internship agencies to offer students scholarships or stipends," says Arleen Marie Borysiewicz, the center's senior vice president for external affairs.

Spell It Out

Companies that are the most successful in recruiting interns first do their homework by determining the goals they hope to achieve from their internship program, experts say. Some of the decisions the company must make include which area of the organization could benefit most from having additional staff, what organizational objectives--such as focusing on diversity or tackling a special project--can be furthered by the internship program, and what the intern is expected to accomplish.