More US employers are abandoning unpaid internships and paying to fill the roles these interns would perform, the Wall Street Journal reported on Monday, as historically low unemployment rates and a scarcity of available workers forces them to compete more extensively for even entry-level talent.
Internships in general continue to rise in popularity, the Journal notes, pointing to a survey from the National Association of Colleges and Employers (NACE) showing that around 60 percent of college graduates in 2017 said they had an internship at some point while in school—a marked rise from just under 50 percent who said so a decade earlier. However, just 43 percent of internships were unpaid in 2017, compared to about half in 2012, NACE found, while the average hourly wage for interns increased 3.7 percent to $18.73 in 2018.
Although unpaid internships are often criticized for exploiting young people’s labor and shutting poor students out of career opportunities, employers are not paying interns merely out of the goodness of their hearts. The Journal hears from several companies that have converted their unpaid programs into paid ones, or turned down opportunities to add unpaid internships, in order to remain competitive in the market for college student and graduate talent. Young people have more options in today’s job market than they did during the recovery from the Great Recession, so employers who want to cultivate future employees through their internship programs may need to offer interns something more than college credit and experience.
Earlier this month the US Department of Labor announced that it was revising its test for determining whether interns count as employees entitled to protections under the Fair Labor Standards Act, citing recent federal court rulings that rejected the previous test:
The Department of Labor today clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA. The Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the Division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis.
The department has issued a fact sheet explaining the standard it will enforce going forward, which is more flexible than the previous test and is based on the rubric the courts have used to judge who is the “primary beneficiary” of the internship and the “economic reality” on which it is based:
Faced with a large number of women in STEM fields who exit the workforce mid-career, many employers in the tech sector have been looking for ways to bring these women back, both to address overall skills shortages and to improve diversity and inclusion. These women are typically mothers who leave their jobs either to devote their time exclusively to raising children or in response to workplace cultures that don’t allow them to balance family and career; though they may not intend to drop out of the job market permanently, in their fast-changing fields, a career gap of just few years can make it very hard to re-enter—and some of these women have gaps of a decade or more.
To help them get back on their professional feet, some companies have launched re-entry initiatives or “returnships”: internship or mentorship programs for mid-career employees that enable them to rapidly update their skills and re-establish their professional networks. Erin Carson at CNET profiles IBM’s re-entry program, a 12-week internship that places mid-career women with STEM backgrounds in one of the company’s various business lines:
Participants get a mentor and work on an actual project, whether it’s in data analytics or programming. The idea is that the program can create a smooth transition for its interns, get them up to speed and give managers a chance to see the interns’ work before hiring them.
Whether paid or unpaid, internships are meant to be mutually beneficial to the employers who offer them and the young people who pursue them, offering interns a leg up in the job market and valuable experiences that enhance their skills and employability. Unfortunately, a recent survey of interns in the UK finds the vast majority of them feel their internship was more of a one-sided deal, Emily Burt reports at People Management:
More than half (53 per cent) of the 18 to 30-year-olds surveyed by Lloyds Banking Group said they spent the majority of their internship completing menial tasks such as printing or photocopying documents, while more than a third (33 per cent) said the majority of their day was spent making tea or picking up lunch for colleagues. Overall, 83 per cent felt their employer was the main beneficiary.
The study also suggested that poor experiences of internships could be hurting the confidence of young people at the start of their careers. A quarter (25 per cent) of respondents said their internships had either no impact or a negative impact on their future career prospects, while only three in 10 (32 per cent) felt their internship had boosted their employability.
Internships have gotten a bad rap lately in the UK, particularly as the country has grown increasingly aware of how its entrenched, historical class divides are affecting social mobility and competition in the labor market. A bombshell report earlier this year claimed that the actual number of internships is six times the number advertised to the public, with the vast majority offered only to those with the family or school connections to know about them.
Social mobility has been under the spotlight in the UK recently, with universities and employers being called upon to address the disadvantages people from less affluent socioeconomic backgrounds experience in the university application process and the job market. For example, mitigating the effects of class bias is a key rationale behind UK employers adopting “college-blind” recruiting—no longer targeting graduates of elite institutions—or removing the requirement that applicants have a college degree at all.
Another practice that is being increasingly scrutinized as a barrier to social mobility is the unpaid internship, which critics argue gives an unfair advantage to young people with well-off families who can afford to support them while they gain experience in their field without earning a salary. Late last year, the government said it was reviewing the use of unpaid internships and considering imposing new restrictions on them, if not an outright ban.
A new report from the Institute for Public Policy Research gives critics of internships some fresh fodder, Marianne Calnan reports at People Management, finding that the total number of internships available in the UK each year (around 70,000) is more than six times the number that are publicly advertised (11,000), with the remainder effectively reserved for those with the right connections to know about them:
Not only do many of these 60,000 additional positions not offer meaningful learning opportunities or working conditions, they entrench privilege because they are largely inaccessible to those without connections or knowhow, it has been claimed. They also discourage businesses from investing in graduate or other permanent recruitment.
Last August, a nonprofit organization called Path Forward launched a program of “returnships” with six Silicon Valley employers—GoDaddy, Zendesk, Demandbase, Coursera, CloudFlare and Instacart—to help mid-career tech professionals return to the workforce after taking career breaks to care for children or elderly relatives. Many of these returnees are women, as they are still more likely than men to take on caregiving roles, and many in the tech sector believe that bringing these women back into the fold is a critical step toward addressing shortages in key talent segments.
This week, Return Path announced a second cohort of returnships with seven other tech employers, Fortune’s Claire Zillman reports:
The employers include data analytics company Verisk Analytics; Internet advertising and ad management software provider AppNexus; Medallia, a customer feedback solutions provider; Intacct, a company that provides financial management software; Volta, which operates an electric car charger network; Quantcast, a digital marketing company; and Cloudera, a software company that provides data analytics and management products. … The seven new companies partnering with Path Forward want to fill about 30 positions in fields like engineering, marketing, professional services, technical operations, and sales.
Zillman also checks in on how Return Path’s first cohort fared:
Unpaid internships, as we’ve discussed before, are increasingly risky for employers in the US, where they’ve been the subject of numerous lawsuits. They also tend to be a bad deal for interns, shutting out candidates from low-income backgrounds and not always helping young people land permanent paid positions as advertised. Because of the inherent inequity of a position only those with family support or savings can afford to take, the UK is now considering banning them entirely, the Guardian reports:
Damian Hinds, the employment minister, said it was right to review internships as unpaid posts are not accessible to those who do not have help with their living costs. He told ITV’s Peston on Sunday: “I think it is important that young people have an opportunity to get work experience. One of the big barriers to getting a job is not having had employment experience and so there is a role for work experience. But I think particularly in the media, in fashion, in these very sought-after occupations, there is a concern … that with unpaid internships those aren’t actually accessible to everybody and I think it is right that we look at it.”
Hinds said the details would need to be worked out and it was important to ensure that young people still get work experience. However, he said it was crucial to make sure jobseekers had fair access to sought-after roles, especially the creative industries. … Alec Shelbrooke, Conservative MP for Elmet and Rothwell, will introduce a House of Commons private member’s bill to ban the unpaid internships this week, but it is a type of legislation that is unlikely to progress through parliament. Instead, the government could review internships before including restrictions on unpaid internships in legislation in the next Queen’s speech.
The bill, the BBC elaborates, would require organizations to pay adult interns at least the statutory minimum wage, but would exempt “school-age children, apprentices and full-time university and college students completing work experience as part of their studies.” Christopher Tutton, a partner at the employment law firm Constantine Law, tells Recruiter that if the proposal becomes law, interns might end up claiming other rights enjoyed by full employees, beyond the minimum wage: