Business

Why It Pays to Pay Your Interns Well

Think you’re saving a buck if you don’t pay your interns? Think again. Not giving them incentive to support your company’s mission will ultimately cost you.

Column by Tim Schlee

According to Glassdoor.com, the average Google intern makes $5,678 per month – more than $68,000 annually. That’s not including free housing, free transportation, cafes, gyms, etc. At the same time, Google thrusts its interns into the thick of major projects, often overwhelming them with a level of responsibility most college students have never known.

Crazy, right? But Google’s program is not alone. It’s part of a growing trend of expansive internship programs that demand the commitment and devotion of full-time employment – with the pay to match.

 

The Changing Climate of Unpaid Internships

To the careful observer, it’s no surprise that many internships are changing. The deck is stacked against the unregulated, unpaid programs that have dominated the past few decades, with modern judicial rulings finally reflecting public sentiment and long-ignored legal precedent.

Last year, a federal judge ruled Fox Searchlight Picture’s unpaid internships were not legal and reiterated the established (although largely disregarded) standards for determining the legitimacy of an unpaid internship.

With the ruling, Fox was forced to pay its interns at least minimum wage. Similar cases followed with similar results. It’s not a deadly blow to the unpaid internship – many interns are reluctant to report illegal internships for fear of being blacklisted from their industry – but it’s a step in the right direction.

 Making the Right Investments

Regardless of legality, there’s reason to compensate interns well. A worker with decent pay, responsibility and the opportunity to gain real workplace experience is far more likely to contribute something of substance to a business than an unmotivated and unpaid intern.

It is with this mindset that forward-thinking companies, such as software development firm Fog Creek, invest significant amounts of capital into its internship programs to

find, attract and retain the best talent available.

Fog Creek began its search this year with 776 applicants, reducing that number to just nine after resume reviews, coding tests, and in-person interviews (for which the company paid to fly in applicants). Once hired, the interns received $6,000 per month in salary, a $1,000 signing bonus, free housing, catered lunches and more. That’s a massive – and expensive – undertaking for a company of about 60 employees.

Despite its size and resources, Fog Creek and other smaller companies have found ways to offer interns exciting and engaging opportunities in the hope of snagging the best employees before they even enter the job market. And they’re not alone. A study from the National Association of Colleges and Employers found that employers extended job offers to nearly 70 percent of their interns in 2008, up from 57 percent in 2001, with retention increasing in employees who came from internships.

The Rules of Engagement

Flashy benefits like fitness centers and catered lunches are just the icing on the cake, however. What really sets the best internship programs apart is the opportunity to engage in truly meaningful work.

For all the perks at Google, for example, the interns must work incredibly hard to stay afloat.

Kitt Vanderwater was once a Google intern and is now a full-time software engineer at the company. “It was a little overwhelming because I was doing all these things I had never done before,” she says. “I was the one who was driving a lot of the decisions we were making.”

The value of such responsibility is clear. The employer, after a thorough recruitment process, can trust the intern to deliver solid results. The intern, on the other hand, gets the benefit of meaningful work in a real office setting. With such a system in place, an intern is no less an asset than any other employee, which is why he or she should be compensated accordingly.

The Benefits of a Better Internship Program

While there are still too many businesses that fail to invest in truly engaging internship programs, those such as Google or Fog Creek have identified one of the most valuable tools at their disposal: the passion of youth to grow, to learn, to do.

Businesses that sequester their interns into positions that amount to little more than a personal assistant are wasting their most precious asset – the future.

That is why it pays to pay your interns well. While there’s a long history of low-quality, unpaid internships in the U.S., the federal ruling last year may have been a turning point. With a host of high-quality programs across the nation, like those at Microsoft, BP, Google, and Fog Creek, the future is looking bright.

 

Tim Schlee is a Kansas City native who studied English and linguistics at Truman State University. He is a content writer for Red Nova Labs, which offers Web marketing technology for the self-storage industry, including lead-generating search engines and facility management software. For more information, visit www.rednovalabs.com.