Why are paid interns more likely to get job offers?

Employers increasingly looking at recent graduates' work experience

A study shows that college students completing paid internships are more likely to receive job offers than are those who work for free, Andrew Soergel reports for U.S. News & World Report.

The 2014 report from the National Association of Colleges and Employers found that 65.4% of that year's graduating class who had paid internships received job offers prior to graduation, compared with just 39.5% for those who had unpaid internships—not much higher than students who had no internship experience at all, 38.6%.

Most paid interns are at bigger companies

Soergel suggests several reasons for the discrepancy.

First, it could be that companies with the resources to afford paid internships are also more likely to have resources to hire those interns later.

Eighty percent of employers consider internships to be a recruiting tool, but larger, for-profit companies frequently are better able to afford to pay students, while smaller government offices and non-profits may be unable to do so. The latter two types of organizations generally have less turnover and fewer resources to hire someone new as well.

Legal challenges to unpaid internships

Additionally, recent lawsuits regarding unpaid internships against major companies—such as Viacom, Universal Music Group, and Fox Searchlight Pictures—have spooked many organizations from offering them. The class of 2014 had the lowest rate of unpaid internships, 46.5%, since the data was first tracked in 2011.

Legally, in an unpaid internship "the employer that provides the training derives no immediate advantage from the activities of the intern," according to the Wage and Hour Division of the Labor Department.

An 'experience gap' could be a larger problem than the 'skills gap'

"The concern is that the intern displaces paying work. They take the place of a job that someone could be given. All these students say, 'That's how I get my foot in the door.' Well, yeah, and someone else could get their foot in the door and be paid while they're getting their foot in the door," says Michael Harper, a Boston University law school professor.

Employers demand experience

While employers say they expect to hire more recent graduates this year, they also place increasing weight on prior professional experience. An unpaid internship may signal the student did not engage as much in the workplace as someone who received pay.

"Employers want people to come to the workplace with already a set of both technical and foundational skills. The more summers you can spend accruing those skills, the more of a track record you can demonstrate to employers," says Matt Sigelman, CEO of Burning Glass Technologies. (Note: Burning Glass is a partner of EAB.)

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A recent survey by his company determined intern demand was higher in March this year than last, but that there is a mismatch between available positions and students' fields of study. For example, last year 18% of college students graduated from business operations and management programs, but just 8% of the internship openings correlated with that field.

"It really challenges the notion that an internship is something that you go off to [in order to] learn job skills. It really feels increasingly like you're expected to have the job skills that get you the internship that gets you the job," Sigelman says (Soergel, U.S. News & World Report, 5/5).

The takeaway: Internships are becoming increasingly difficult for students to land, and unpaid ones may not benefit students in their job hunt, according to recent reports.

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