There are so many great reasons for college students to have internships. They’re a terrific way to break into an industry and begin building career and mentor networks. And they significantly increase the chances that students will receive job offers and make more money in their first job.
Internships are equally important to employers, who are always on the lookout for new talent. Intern-to-employee conversions are running at a five-year high — employers hire nearly 60% of interns for permanent positions — and employers overwhelmingly say that internships offer the best return on investment for entry-level recruiting. Additionally, Generation Z interns help employers looking to bridge the information gap to tap into new ideas, audiences and perspectives.
Though no one doubts the value of internships, we’re still debating whether interns should be paid. This debate needs to end because interns absolutely should be paid.
Unpaid internships for college credit have existed seemingly forever. They’re still prevalent in industries such as government and nonprofits that function on lean budgets. In journalism, media and entertainment, the sheer number of applicants puts downward pressure on the impulse to pay interns.
A huge misconception remains that the experience and academic credit that come with unpaid opportunities are worth significantly more than an intern’s meager paycheck or that academic credit is a benefit to the student. What most employers don't realize is that they have no authority over whether their internship is credited or not, that is up to the students’ institution. And “offering academic credit” simply means you’re now requiring the student to go through extra logistical hoops. While unpaid internships can be worthwhile in very limited circumstances, they come at great cost to students. Students have to pay tuition to earn those credits and students who move to another city for the summer can expect to spend upward of $7,000 on housing, food, transportation and related expenses. Unpaid internships also raise issues of fairness, equity and potential exploitation simply because most college students cannot afford to forgo a paying job or go deeper into debt simply to burnish their resumes.
The good news is that the majority of employers have come on board. Across the Handshake jobs platform for Gen Z and early talent, roughly 75% of all internship postings seen by students in 2022 were paid positions — a 15-point increase from the prior year. This growth is fueled by employers who are more aggressively seeking talent, companies who don’t want to be left behind by their peers and changed minds among a few long-standing holdouts. The longstanding argument that only the biggest companies could afford to pay their interns has also proven to be outdated and untrue. For example, the White House recently began paying its interns and earlier this year the U.S. Office of Personnel Management and the White House Office of Management and Budget urged all federal agencies to pay interns and make federal jobs more accessible and more attractive to young workers.
These are promising trends. Still, the number of internships that offer both experience and a paycheck should be much closer to 100%. Here’s why:
Paid internships can attract a larger pool of applicants.
Handshake data from August 2022 through February shows that paid internship postings attract an average of 43 more applicants per job than unpaid ones. Which makes perfect sense: A much smaller number of students can afford the expenses associated with an unpaid internship. Paid positions, meanwhile, open the door wider to a larger number of qualified college students who have the talent and desire, but no option to work without pay.
Paid internships attract a more diverse applicant pool, especially if employers use equitable recruitment tactics and offer flexible options.
Generation Z is the most diverse generation in our nation’s history, and pay transparency and equity are crucial issues to them. Paid internships signal to them that their talent and potential are valued. Comcast’s
They are a terrific way to test out prospective employees.
The National Association of Colleges and Employers has found that nearly two-thirds of students who complete a paid internship at a for-profit company receive a job offer before they graduate. For unpaid interns, the job-offer rate was below 40%. That suggests that employers see that a student worth paying is an employee worth hiring.
They enable organizations to show they care for employee well-being, which is a priority for Gen Z.
The Class of 2023 is extremely interested in employers that offer flexible workplaces, a healthy company culture, a viable work-life balance and fair compensation. They want their bosses to walk the talk, in other words, and unpaid internships undercut this message. Students feel more valued when they’re well compensated. Consequently, employers will notice a different level of quality, time and productivity from interns.
Paid internships build a positive brand for employers among college students and career services offices.
Interns who feel they were treated — and paid — fairly will become brand ambassadors. They’ll tell their friends and career counselors, who will be sure to inform the next crop of interns that your company is a great place to work and launch a career. Many employers have learned that there’s no better marketing for talent than students telling other students about the experience of working for that company.
It costs money to develop talent, and Gen Z knows its worth. When it comes to paid internships, employers can pay now — or pay later.