Many companies re-evaluating their internship programs in light of some high-profile lawsuits involving unpaid internships are discovering that paid interns may actually be providing a better return on investment.
The debate surrounding paid verses unpaid internships became heated after a federal district court judge in New York ruled on June 11 that Fox Searchlight Pictures should have compensated two unpaid production interns for the 2010 movie “Black Swan.”
This ruling prompted some organizations to take a look at their internship programs, according to Ronald Kovach, vice president of student services for the American Public University System.
On one hand, some argue an unpaid intern’s experience and development during the program acts as compensation. On the other, Kovach said if the organization is benefiting from an intern’s work, the intern should at least be compensated with the minimum wage.
“The classification of an unpaid internship must be closely scrutinized by an organization,” Kovach said. “There’s certainly a value an intern derives from the experience, but you know, the main thing is how the experience is structured. You could have a paid internship and really learn very little, but there are more circumstances where people are making a contribution and aren’t being paid.”
While intern compensation continues to vary — 36.9 percent of companies offer either an unpaid internship or an internship below minimum wage, according to InternMatch’s 2013 State of the Internship Report — an organization that is paying its interns may be more incentivized to put in an increased development effort, said Robert Shindell, director of content and resource development for Intern Bridge Inc., a consultancy.
“When an intern is paid by the host organization, they are getting more out of it because the internship is putting more into it,” Sindell said. “The interns who are paid are significantly more likely to want to work for that company full time, their level of satisfaction with the internship experience as a whole is significantly higher, and their own self development, how they have evolved as a young professional, is significantly higher.”
But not all internship programs — paid or unpaid — yield positive results. With 58.9 percent of students reporting that gaining experience and acquiring a better portfolio is the most important part of their internship experience, according to the InternMatch report, it is important for companies to develop an effective program.
To Heather Huhman, a career adviser and author of “Lies, Damned Lies & Internships,” the amount of time and money a company invests in developing its internship program — not the amount of money it compensates its interns — will have the largest impact on interns’ overall experience.
“An internship is supposed to be training and development — that’s what it is. An internship is not supposed to be a summer job,” Huhman said. “Interns make a lot of mistakes, and they are there to learn. In terms of whether or not they receive more at a paid internship verses an unpaid internship, I think it really depends on the company and how they set up the program.”
Shindell said a valuable internship program, for example, will engage the intern through assigning meaningful projects, explain an intern’s role within an organizational context, establish a mentoring partnership, and clearly lay out internship objectives.
Companies can start developing an effective internship program by being transparent in describing the program. Through providing examples of prior internship projects, an organization is more likely to attract a good internship match.
“An intern should not be doing mundane tasks because they really aren’t learning,” Kovach said. “An internship is something that needs to be tied to learning outcomes. The university is the one that should be determining from the beginning what the internship experience should be like; then, be in concert with the organization and its needs.”
Jessica DuBois-Maahs is an editorial intern at Chief Learning Officer magazine. She can be reached at editor@CLOmedia.com.