Why Unpaid Internships Are Usually a Bad Idea
There has been a fair amount of discussion in the press lately regarding the legality and fairness of unpaid internships.
The key proponents of unpaid internships for students are typically startup companies with limited resources, nonprofits, and in-demand employers in certain highly competitive fields such as advertising or public relations.
Despite the obvious benefit to companies of receiving skilled labor for free, unpaid internships are in general a bad idea for a number of reasons: 1) Their nature prevents their use as an effective method of student recruiting.
The nature of unpaid internships means that companies are likely not getting the most talented candidates for the positions; they are simply getting the applicants who can afford to spend the summer without a salary.
It is no secret that many MBA students as well as undergraduates take on significant debt to finance their education, and so for many spending the summer without a paycheck is financially impossible.
One of the key benefits which internships (and projects on 31Projects) offer companies is the ability to try students out and identify the right talent to bring into the organization full-time.
By automatically excluding a large percentage of candidates from their internships, companies lose the ability to use the internships as part of a comprehensive talent pipeline to get the right people in the door.
2) They confuse students regarding their value to the company.
Proponents of unpaid internships often argue that the students are gaining valuable learning experiences which more than make up for the lack of pay.
I agree that there is value in the learning students gain, however this reasoning raises the question why companies are willing to pay students a reasonable salary one year later for a full-time position, yet are unwilling to compensate them for their work during the three summer months as an intern.
I believe that such arrangements set a poor precedent for the relationship between the company and student by confusing the value which the company places on the student's contributions.
3) They prevent equal access to in-demand jobs.
As mentioned before, unpaid internships exclude students who cannot bear the financial burden of a summer without pay.
This eliminates a large percentage of students from the candidate pool for the internship and, to the extent that the company stocks its available full-time positions with previous interns, for full-time jobs.
It goes without saying that pay-to-play internships requiring the intern to pay for the experience take the above three points to the extreme.
Although I am in general highly skeptical of unpaid internships for the above reasons, I can see an argument for them in two settings: nonprofits which have other volunteers working unpaid as well, and startups which have little or no budget to pay for the help.
At nonprofits where unpaid work is less the exception than the norm and students view the experience very differently than a typical corporate internship, I could concede that there is a place for unpaid internships.
I likewise sympathize with early-stage startups where other employees are working as well without pay as I believe the argument that the learning experience offers the student tremendous value has merit in this situation (plus such internships are typically not done with a view towards recruitment for a full-time position).
The key proponents of unpaid internships for students are typically startup companies with limited resources, nonprofits, and in-demand employers in certain highly competitive fields such as advertising or public relations.
Despite the obvious benefit to companies of receiving skilled labor for free, unpaid internships are in general a bad idea for a number of reasons: 1) Their nature prevents their use as an effective method of student recruiting.
The nature of unpaid internships means that companies are likely not getting the most talented candidates for the positions; they are simply getting the applicants who can afford to spend the summer without a salary.
It is no secret that many MBA students as well as undergraduates take on significant debt to finance their education, and so for many spending the summer without a paycheck is financially impossible.
One of the key benefits which internships (and projects on 31Projects) offer companies is the ability to try students out and identify the right talent to bring into the organization full-time.
By automatically excluding a large percentage of candidates from their internships, companies lose the ability to use the internships as part of a comprehensive talent pipeline to get the right people in the door.
2) They confuse students regarding their value to the company.
Proponents of unpaid internships often argue that the students are gaining valuable learning experiences which more than make up for the lack of pay.
I agree that there is value in the learning students gain, however this reasoning raises the question why companies are willing to pay students a reasonable salary one year later for a full-time position, yet are unwilling to compensate them for their work during the three summer months as an intern.
I believe that such arrangements set a poor precedent for the relationship between the company and student by confusing the value which the company places on the student's contributions.
3) They prevent equal access to in-demand jobs.
As mentioned before, unpaid internships exclude students who cannot bear the financial burden of a summer without pay.
This eliminates a large percentage of students from the candidate pool for the internship and, to the extent that the company stocks its available full-time positions with previous interns, for full-time jobs.
It goes without saying that pay-to-play internships requiring the intern to pay for the experience take the above three points to the extreme.
Although I am in general highly skeptical of unpaid internships for the above reasons, I can see an argument for them in two settings: nonprofits which have other volunteers working unpaid as well, and startups which have little or no budget to pay for the help.
At nonprofits where unpaid work is less the exception than the norm and students view the experience very differently than a typical corporate internship, I could concede that there is a place for unpaid internships.
I likewise sympathize with early-stage startups where other employees are working as well without pay as I believe the argument that the learning experience offers the student tremendous value has merit in this situation (plus such internships are typically not done with a view towards recruitment for a full-time position).
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