Posted February 13, 2017 by

Don’t ask, “Do we have to pay interns?” The answer is always yes.

 

A common question in the space of college recruitment and talent acquisition is, “Should interns be paid?” Sometimes, unfortunately, the variation is “Do we have to pay interns?” In fact, there are over 7.4 million Google search results for that latter question, with the No. 1 hit typically being this ProPublica article asking “When is it OK not to pay an intern?” However, I look at it from the other side. In short: you should and need to pay interns. 

First of all, paying interns is a Fair Labor Standards Act (FLSA) issue. In the broadest terms, government and non-profits do not need to pay interns, whereas for-profit companies do need to pay interns. The U.S. Department of Labor actually developed six criteria for determining whether an intern can work unpaid. (You can find everything on the sexily-titled “U.S. Department of Labor Fact Sheet Number 71.”)

The fourth criterion is worded as “… the employer that provides the training derives no immediate advantage from the activities of the intern …”

As College Recruiter president Steven Rothberg puts it, “I defy anyone to provide an example of an internship designed to deliver absolutely zero value to the employer.”

Unfortunately, though, paying interns (even in for-profit contexts) isn’t always the norm. Data from InternMatch has shown over 1 million unpaid internships in the U.S. alone, often in industries and profit structures where payment would be necessary under law. This has hurt more than a few companies legally: Fox Searchlight had to settle a lawsuit around unpaid internships on the set of Black Swan; Conde Nast was apparently paying interns $1/hour and also had to settle; and HootSuite, theoretically a “new-age” company (social media is their focus), drew a ton of criticism online for unpaid internships. (They eventually gave these interns six months of back pay and ended the concept of unpaid internships entirely.)

There is an end game to everything here which must be taken into account: from that same InternMatch research, paid interns who get hired full-time have, on average, a $51,930 starting salary. Unpaid interns who get hired full-time (which is less likely; only about 38% of them do) start with a $37,087 starting salary. On the company side, an unpaid intern ($0) + a lower starting salary obviously costs less, which might be favorable.

 

An unpaid intern is more likely to spend time on clerical, non-essential functions (i.e. things that might be automated in the next 3-5 years, if not now) and less time on professional tasks. So while you are spending fewer dollars, the ROI is likely to be lower. There’s “shallow work” and “deep work,”. While not every employee can always do “deep work” (sometimes spreadsheets do need to be painstakingly updated), you generally need more “deep work,” critical-thinking-based employees to compete in a more knowledge-driven economy. Most of the data around unpaid interns and how they convert to full-time doesn’t show that happening.

Also, you don’t just have to pay your interns, you should pay them. In fact, you should think of your internship program as a major part of your overall talent strategy. If you’re swayed by allure of unpaid interns possibly converting to lower full-time salaries, think of it along these lines: research has shown that the concept of an employee able to “hit the ground running” is actually not accurate. Most employees require 90 days or more to assimilate into a role (that’s a full quarter). Paid interns, though, have several advantages if they convert to full-time:

  • They already know your processes and people
  • They already understand the work you do and were engaged in it

If you viewed the paid internship as the 90-day assimilation/engagement period, the full-time conversion is much smoother than converting unpaid interns or attempting to hire from a completely new pool.

To answer to your 7.4M queries: yes. Yes, you should pay interns. There are legal reasons, fiscal reasons, engagement reasons, logical reasons, and more.

 

 

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