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ORS Partners Research: The Unpaid Internship Debate

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ORS Partners, a provider of Outsourced Recruiting Solutions (ORS), is comprised of top professional recruiters hired to build and scale companies in the Greater Philadelphia Region.
Many of our clients struggle determining if they should or should not pay their interns. Here's what the market is telling us...

Published in: Recruiting & HR
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ORS Partners Research: The Unpaid Internship Debate

  1. 1. The Unpaid Internship Debate ABOUT US ORS Partners, a provider of Outsourced Recruiting Solutions (ORS), is comprised of top professional recruiters hired to build and scale companies in the Greater Philadelphia Region. 1
  2. 2. Overview > • 43% of internships were unpaid in provided needs to outweigh the pay. • Cooperative – TYPICALLY UNPAID • Field Experience – TYPICALLY PAID • Practicum – TYPICALLY UNPAID • Service Learning – TYPICALLY UNPAID • Externship – TYPICALLY UNPAID • Apprenticeship – TYPICALLY PAID > in·tern noun (ˈinˌtərn/) • a student or trainee who works, Interns sometimes without pay, at a trade or occupation in order to gain work experience. Why Students Intern… 1. Work Experience 2. Add skills to resume 3. Potential for full-time employment 4. Making professional contacts 5. Compensation (Source: Internships.com, 2013 Employer Survey, 2013 Student Survey) Paid vs. Unpaid 2013 • Rule of Thumb: the experience Types of Internships www.orspartners.com info@orspartners.com (484) 684-7471 2
  3. 3. The Unpaid Internship Debate > > 2013 Internship Trends • STUDENTS SAY FAIR WAGE IS $12.45/HOUR. 43% of www.orspartners.com info@orspartners.com (484) 684-7471 3 $13.21 West $11.96 South $12.37 Northeast $12.11 Midwest Expected Pay by Year in School Freshman/Sophomore $11.35 Juniors $12.00 Seniors $11.63 Grad Students $15.15 Source: Internmatch.com, 2014 Annual Intern Report internships were unpaid in 2013
  4. 4. The Unpaid Internship Debate > > Business Trends • Rule of Thumb: the experience provided needs to outweigh the pay. • If you don't plan on paying an intern, you need to certainly make sure they are learning something. • Positions that are highly coveted or competitive usually are not paid. Typically, these positions sometimes have a high starting salary if interns are hired. • An intern for an average position that would require more effort to find and hire would, in most cases, require payment. • Most companies with the resources to pay www.orspartners.com info@orspartners.com (484) 684-7471 4 interns usually do. Sources: Steve Brittin, VP of Strategy, Systems & Process, ORS Partners; Statista
  5. 5. 6 Types of Internships & Pay • Externships are distinguished by their short duration. The student spends a short period of time (usually one to three weeks) observing and often working with professionals in their career field of choice. They are most common in the legal and medical fields and are unpaid. > • Service learning allows you to work in organized service within a community (elementary school, secondary school, institution of higher learning, or community service program). Typically unpaid. • If you want to learn a highly skilled trade, and make money doing it, apprenticeships offer both practical experience and in-school training. Apprenticeships are paid and wages increase as the apprentice gains experience. Apprenticeships vary in length from one to five years. > • SERVICE LEARNING • EXTERNSHIP • APPRENTICESHIP • COOPERATIVE EDUCATION (CO-OP) • A co-op is a three-way partnership between a student, an employer, and a college or university. It allows students to integrate work experience into their academic studies for credit. www.orspartners.com info@orspartners.com (484) 684-7471 5 • FIELD EXPERIENCE • Fieldwork is an opportunity—most commonly used by students pursuing careers in science or sociology—to develop skills by observing, recording, mapping, and interpreting data. Typically paid. • PRACTICUM • Practica offer students the chance to apply their academic experience to a real-world project. Students work in teams or individually under the joint supervision of an employer and an academic adviser. Typically unpaid and through university curriculum.
  6. 6. Legalities > What Employers Need to Know • Unpaid interns should not be doing the same work as employees but should have specific intern tasks and should always be in a structured educational program following the requirements outlined by the DOL. • The internship should resemble an educational program – have a program description, outline/syllabus, and assignments with documentation. > • Most important with using unpaid interns is understanding what violates FLSA and state labor laws. • To learn more about the Department of Labor requirements for interns, please visit: • Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act • New Department of Labor Guidelines on Internships • Forbes Article: The Era of Internships Are Over, Never Hire An Intern Again www.orspartners.com info@orspartners.com (484) 684-7471 6
  7. 7. How to Find Interns > > Top Tools Used By Students Who Found Internships 67% Friends 100% Google Search www.orspartners.com info@orspartners.com (484) 684-7471 7 • Internship Sites • Utilize intern specific job boards to post your positions • Internmatch.com • Urban Interns • BarefootStudent.com 2013 Trends Source: Internmatch.com, 2014 Annual Intern Report 60% Family Member 53% Internship Sites • University Connections • Contact professors or departmental heads at targeted colleges that can identify strong candidates and good response rates • Send emails asking to refer students to job postings • Ask to be featured on departmental websites and university job boards
  8. 8. Industry Insight > > Additional Intern Resources • Forbes Article: Should you pay your interns? • InternMatch.com • Internships.com • InternshipPrograms.com • New York Times: The Unpaid Intern, Legal or Not - NYTimes.com • The Washington Post: Are unpaid internships illegal? • Dissent: Opportunity Costs: The True Price of Internships www.orspartners.com info@orspartners.com (484) 684-7471 8

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