The internship season is upon us. It might be better to say that it never ended.
Some estimates put the total number of internships in the United States a bit over 1.5 million positions per year, and with new spots opening with every school term, students with an eye for work experience are usually keeping tabs for interesting posts opening in their area.
In fact, internships have become such a standard part of the education experience that your school might require it for your major, or assume that most students will partake on their own initiative.
What should you, the intrepid business student, be looking for when you start applying for internships?
The Value of the Internship
The most valuable benefit of an internship is, of course, getting some work experience under your belt, which is why so many students are keen to have one or two added to their resume before they graduate.
Internships are also seen as a great way to get recruited and have a job waiting after you graduate – making a great impression on a company you want to work for during your internship can help skip the line when they start hiring fresh graduates. Getting an internship after you graduate is also a tried and true method of getting your foot in the door.
We digress – these are the benefits you have heard about from every angle by now. What you might not know is how much the circumstances surrounding your internship will play out for your job prospects after you graduate.
Paid Versus Unpaid
Everyone would prefer an unpaid internship, of course, but you might be surprised at how big a difference it comes to whether you are paid for your work. The conventional wisdom over the last few years has been that the experience of the internship is the most valuable part of the experience, but paid internships offer a lot more than a bit of extra cash.
You get what you’re paid for
Every year, the National Association of Colleges and Employers surveys internship participants about their experiences. For students who undertook paid internships, all the common knowledge of internships applied: students graduated with job offers nearly twice the rate of students with no internships (63% vs 35%), earned far more in their first jobs ($51,200 vs $37,000), and generally benefited in every way that was expected.
Students who went with unpaid internships had a very different story. On the whole, they were barely better off in terms of job offers than their peers with no internship at all (37% vs 35%), and worse, they started at even lower salary points ($35,700 vs $37,000).
Why The Discrepancy?
There are a few factors at play when it comes to unpaid internships. The first is that companies who tend towards hiring lots of unpaid interns are generally more strapped for cash than those who pay for student labor. This means when it comes to hiring, they are less likely to have many openings to offer even the best interns.
Another factor at play is that when a company hires an unpaid intern, they are making a much smaller investment in that student, so there is less incentive to make that intern be fully productive. This translates to less training, less important tasks assigned, and (most importantly) less incentive to keep them around after the internship expires.
This means that the job experience you get with an unpaid internship is likely much less valuable than a paid internship.
Are unpaid internships worth it?
Lower starting wages, barely better chances of getting a job, less interesting work while on the internship, why would students offer to work for free at all?
At the end of the day, the solution is not quite as simple. Taking an unpaid internship in finance is not the same as taking an unpaid internship in social services, for example. If you intend to enter a field where you simply do not see many (if any) paid internships advertised, the field itself may require unpaid internships as a proving ground. This is especially the case in industries like fashion and writing.
The truth of the matter is, though, that even in these industries where unpaid internships are the norm, you will probably struggle to find work after graduating because the industries themselves are so competitive.
Internships are only valuable if you gain work experience that will help you later in your career. If you cannot find a spot at a company that you want to work with, you may be better off sticking with the classroom and try to build up your resume through certifications or other training programs.
How To Land A Great Internship
There are some extra tips and tricks to keep in mind though. Companies generally hire interns in cycles, but the recruitment process to fill each internship starts an average to 6 to 8 months ahead. If you want to get an internship before you graduate, you need to start right now (click here to go to our internship search page).
Internships are also extremely competitive, moreso now than ever. Companies expect to hire fewer interns in 2016 than they did in 2015, so your pool of competition is getting fiercer. Be ready to apply early and often, and be ready for rejection (as with any job hunt).
What if I miss out?
If you try and fail to land an internship, it is not the end of the world. Per the most recent survey data, you have some things to take solace in:
- You’re probably going to earn more after you graduate than someone who took an average unpaid internship out of desperation to have “something”.
- Just because you get an internship doesn’t mean you have a secured job. After 1 year, workers who had no internship had more secure jobs than people who took an internship, but were hired by a different company after graduation
- After 5 years, workers who had no internship at all had the most secure jobs (64.2% were still with the first employer they worked with after graduation)
This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!
This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!Learn More