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What are the trends in using interns and what problems have existed from their increased use?
Hello! It is my pleasure to respond to your query! To fully answer your question, I have included a legal definition for “intern,” as well as statistics about interns in the United States. Additionally, I’ve outlined several current trends related to the use of interns, and provided details on important things for businesses to consider when deciding whether or not to hire an intern. Lastly, I’ve provided several case studies and examples about problems or issues companies have experienced due to interns, and a bit of advice from experts in the field.
Throughout, I have interspersed information related directly to real estate interns to help best focus the blog entry you’ll write based on this information, however it is important to note that there was very little information available on this specific segment of the overall topic.
Please Note: Although it is certain that some of this information is repetitive for you (considering your background), every attempt has been made to ensure this response is comprehensive, and not too juvenile or introductory. It is my hope this provides exactly what you need.
DEFINING THE “INTERN” & PROGRESSIVE RELATED STATISTICS (2012 – 2016)
The Department of Labor defines an internship as “a formal program providing a practical learning experience for beginners in an occupation or profession that lasts a limited amount of time,” as detailed by Forbes. They go to state that, “Legally, an internship can be unpaid only if the employer is a nonprofit (in which case it’s volunteering) or if the intern earns formal college credit on the job.”
The article details important statistics on interns in the US provided by the National Association of Colleges and Employers (NACE). These include:
• In 2012, 1.5 million internships were filled in the US, about half of which were unpaid.
• In 2013, 63% of paid interns received a job offer after college graduation / end-of-internship.
• In 2014, 97% of major employers planned to hire interns, totaling between 1 and 2 million interns.
• 65% of bachelor’s degree graduates (class of 2015) had participated in an internship (paid or unpaid) and/or co-op. Note: This represents the highest percentage of interns from a graduating class since the survey began in 2007.
• 60% of employers stated their preference was to hire someone with experience gained in an internship.
• 64.6% of male graduates participated in internships, while 65.8% of women did.
• White, Asian-American, Multi-Racial, and International students were more likely to participate in internships than African-American and Hispanic-American graduates.
• 58.8% of interns worked for for-profit/private businesses, 25.7% interned at nonprofit organizations, 12% interned with state/local governmental agencies, and 3.5% interned for federal government agencies.
• 60.8% of interns were unpaid, while 39.2% of interns held paid positions. “Unpaid experiences were by far the most common in the social services industry (81.7 percent), followed by education, government, healthcare, other support services, and recreation/hospitality (50.4 to 63.9 percent).”
• 55.7% of interns worked in the industry in which they hoped to have careers.
• 73% of students stated that internships were highly important to initial career advancement.
• 43% of students stated that getting paid was highly important to an internship, however more students cared about the following factors over pay: Access to mentors, clearly-defined responsibilities, and work-life balance.
• 97% of recruiting professionals “have offered entry-level employees temporary full-time, paid internships, or contractor positions with the potential to receive permanent job offers” with 86% reporting that they do this regularly.
• Internships are most common at medium-sized (4.4%) and large (3.7%) businesses. “Medium and large businesses appear to be doing a better job at building talent pipelines for internship programs: their internship programs are larger relative to their overall hiring programs.”
• Between 2015 and 2016, the industries hiring the most interns were: Leisure & Hospitality (41%), Education & Health Services (36%), and Retail (20%).
Now that we’ve learned a bit about the data for interns in the US over the last few years, let’s look at current trends regarding their use.
TRENDS: USE OF INTERNS
MarketLeader reports that “almost 30 percent of college students work as unpaid interns, according to the National Association of Colleges and Employers”. They also report that, within the real estate market, it is most common to hire paid interns, rather than using the unpaid variety. Some trends related to the use of interns include the following.
• TREND: GRANTS FOR BUSINESSES HIRING INTERNS: AmericanExpress reports that some states and cities offer grants to small businesses to hire interns. For example, “InternNE is a program in Nebraska that awards eligible businesses up to 50 percent of the internship cost, or up to $5,000 per student, and 75 percent of the cost if the business hires a student who receives a Federal Pell Grant, along with an additional $2,500. The initiative was created to create jobs and ties to Nebraska for both students and businesses, and is one of many similar programs around the country.”
• TREND: MILLENNIALS SEE INTERNSHIPS AS FUTURE INVESTMENTS: Forbes details how Millennials often view internships – even unpaid or low-level positions – as an investment in their future – as long as they are working in a high-prestige field or within their chosen occupation/field. Often, these individuals can do this as they are still being supported by their parents. “The spread of the low-paid or unpaid internship reflects the growing inequality between Millennial haves and have-nots, where those with enough resources can continue working for free in hopes of their ‘big break,’ and those without have to settle.”
• TREND: PUSHBACK AGAINST UNPAID INTERNSHIPS: Several sources indicate that there have been multiple lawsuits recently of unpaid interns pushing back on the businesses for which they are interning – based on failure to comply with labor laws for interns (as discussed within the next section). Forbes reports that “an increasing number of businesses … have shut down their programs” for interns because of their fear of being sued. However, the article also states, somewhat contradictorily, that “in high-prestige creative fields like music, media, and fashion, low-paid or unpaid internships are spreading out to all sectors”.
• TREND: DEMOGRAPHIC DIVERSITY IS IMPORTANT: SocialHire states that 43% of their surveyed respondents indicated that diversity in the workplace was highly important to them in the companies for which they interned. This represents a 12.2% increase from the previous year’s findings. They go on to say that, “Students are looking for an accepting work environment where a variety of creative opinions are voiced and valued.”
• TREND: INTERNSHIPS ABROAD: Although research shows that data on this has not been collected over time, the Institute of International Education states that, “almost 20,500 Americans participated in for-credit internships in 2012-13, while about 15,000 interned, worked, or volunteered abroad for no credit”. They discuss that the demand for internships outside of the US for Americans has increased over the last few years as students (and parents) grow more concerned about job prospects after graduation. The NYTimes articles states that, “Most providers are for-profit companies, while some are educational nonprofit organizations. In addition, more and more universities, including Columbia, Georgia Tech, Rice, Yale and the University of Southern California, are arranging internships for their students, in part to keep costs down.” An Institute for International Education of Students 2012 survey showed that 84% of those who’ve served abroad in an internship believed the experience helped them build valuable job skills, with 89% reporting getting hired into a job within six (6) months of their college graduation. Overseas internships can prove difficult, however, since many of them require upfront costs (like travel, lodging, etc) which are up to the intern to pay.
• TREND: RETURN-SHIPS ARE ON THE RISE: CNBC details that more adults are taking on low-paid internships than ever before. This is especially true for those who have been out of the workforce for an extended time or those seeking to change careers without going back to school. These return-ships allow people to return to work in a capacity similar to an intern, and offers them “mentorship, experience, and a chance to learn about new industry trends and operations”. Large employers like Booz Allen Hamilton, Goldman Sachs, and General Motors offer return-ships. Experts state that, “The ideal candidate for a returnship is someone who has been out of the workforce for more than five years, not just a couple of years”. These return-ships are most often full-time and paid at a lower-than-typical salary, and are for a specific length of time without the guarantee of full employment afterwards (like internships).
Now that we’ve looked at some statistics and current trends, let’s delve into important considerations for businesses to keep in mind when considering whether or not to hire interns.
IMPORTANT CONSIDERATIONS FOR INTERN USE
Businesses hiring interns should keep in mind that “internships are truly about training the next generation of workers,” as stated by AmericanExpress. If an internship is handled properly, the intern leaves the position having learned a significant amount about the basics of the company, position, and internship tasks. On the employer-side, the business reaps the benefit of having a low(er)-cost worker, as well as potentially developing an individual who will later become a valued employee. Let’s look a little deeper into these considerations next.
• PAID VS UNPAID INTERNS: We discussed this briefly earlier, and will expand on the topic here. MarketLeader states that hiring a paid intern does not mean paying that person minimum wage. In fact, in 2014, the average hourly wage for bachelor’s degreed individual was $16.35 per-hour, while a master’s degreed paid intern would average about $22.58 per-hour. Alternatively, if you are hiring an unpaid intern, there are six (6) federal guidelines laid out by the Fair Labor Standards Act defining how the internship must be handled, or else the intern must be considered a true “employee”. These include: (1) Provide educational environment / opportunities to intern. (2) Intern’s experience must directly benefit him/her and business must not be dependent on intern’s work. (3) Intern is not hired as replacement for other employee. (4) Intern may not perform routine productive work that provides advantages to the business. (5) Internship lasts for a fixed length of time with no guarantee of employment afterwards. (6) Intern and employer are clear that no pay will be provided for intern’s work. MarketLeader reports that, “Number four will be the clincher for most real estate agents. After all, the whole idea of hiring an intern for a real estate practice is to get some help with routine business tasks.” PashaLaw warns that, “A small business that does not comply with these requirements may face liability for wages, overtime, benefits, payroll taxes and income taxes. If an unpaid intern is hurt on the job and would otherwise qualify for workers’ compensation, the employer may face additional claims”.
• THREE CONSIDERATIONS: PashaLaw details three (3) important considerations for businesses to keep in mind in protecting themselves when taking on interns. These include: (1) Pay the intern at least minimum wage and overtime if s/he works more than 40 hours. (2) If intern is in college, collaborate with the institution on college credit awarded for internship, if applicable. (3) Develop a written outline for both intern and business detailing how internship meets six (6) Fair Labor Standards Act guidelines.
• DEVELOPING LONG-TERM EMPLOYEE PIPELINES: Using interns (paid/unpaid) can help businesses develop long-term employee pipelines. Since these individuals become familiar with company policies and culture during their internships, the time period allows employers (and interns themselves) to determine if the intern is a good fit for the company – so that when the internship ends, s/he can be offered full employment. This saves the company money for onboarding as well as talent-recruiting.
Now that we’ve gone over some things for businesses to keep in mind with interns, let’s look at some specific examples and case studies of what can go wrong when an internship is handled poorly – or a business takes on a problematic intern.
CASE STUDIES & EXAMPLES: PROBLEMATIC INTERNS
Let’s look at several “interns-gone-bad” stories and how companies handled the issues and the interns. Additionally, I’ve included examples of what can happen when organizations handle interns poorly, since unprofessional treatment can go come from both interns and employers.
• EXAMPLE – AMBITION OVER PRACTICALITY: CollegeMagazine tells of an intern at Tyco (talent acquisition giant) who decided to prepare and send a video PowerPoint demonstration – instead of delivering a live presentation herself, as she was tasked to do. The video was poorly prepared – and not given the quality-once-over by the intern before she sent it – and her voice-over lagged behind the video’s actions – causing the room-full of attendees to laugh at her idiocy. When interns are given too-free of reigns, not held to specific standards and expectations, and are too inexperienced to realize how to avoid mistakes like these, things can turn out badly for both the intern (who was embarrassed) and the company (who could have lost business due to their careless attitude with the intern).
• EXAMPLE – LACK OF PROFESSIONALISM: Interns who have not experienced the “real-world” of business can sometimes not realize how important it is to communicate with the right tone and respect their employers deserve. CollegeMagazine tells of an intern from Temple University who wrote an email to the CEO of the company for which he was interning. Instead of using a proper form of address, like “Mr. Boss,” the intern began the communication with “Hey, Joe” and maintained a highly-casual tone throughout – causing the CEO to complain to the university about his lack of professionalism. This example builds on the last example in that, once again, had this intern been writing to a client or vendor, the lack of professionalism could have cost the company big-time in lost revenue.
• 2 EXAMPLES – UNCLEAR ON BUSINESS EXPECTATIONS: CollegeMagazine tells about an intern at SDKCreative who, despite several reminders about dressing up for an incoming important client, opted to wear corduroy cargo pants on the day of the client meeting. When confronted about her manner of dress, the intern saw no issue with presenting herself to the client in less-than-professional clothes. Another example demonstrating how inexperienced interns can be unclear on what is expected of them in the business world comes from USNews. The story details an intern who would routinely come in for shift 45 – 50 minutes late, despite repeated discussions and warnings on the behavior. “Eventually, he started coming in only 20 minutes late and asked for praise because he had made 'vast improvement' in his punctuality."
• EXAMPLE: POTENTIAL (OR REAL) LAWSUITS: As mentioned previously, disastrous experiences with interns have led to lawsuits, like the one filed against Conde Nast. Additionally, interns’ careless, reckless, or unprofessional behaviors could place the company in legal or major financial jeopardy. One example of this comes from USNews about an intern who felt the work was getting in the way of her study time. To provide herself with more study time, she brought her brother in to complete her intern-related work (filing, shelving, etc). She was caught doing this a second time after she’d been spoken to about it the first time it was discovered. The implications of what could have happened – like if this job had entailed private legal or medical documents, or other confidential patient/client information – are staggering.
Note: Are you seeing a trend here? Research indicates that many of the issues companies seem to have with interns stem from their lack of professionalism and experience in how to function in the business world, and often, their inability to determine what level of professionalism is expected of them. Alternatively, when a business handles an intern improperly, it can be just as devastating for both parties. Here are two (2) examples.
• EXAMPLE – CLEAR EXPECTATIONS ARE KEY: USNews discusses an intern who, despite having signed a contract indicating the specific number of days and hours he was to work during this internship, and despite having attending his own going away party the day before, still showed up to the workplace (the day after his tenure ended) upset that he was no longer with the company. When a business doesn’t set / outline clear expectations – or when the intern doesn’t understand the implications of specified timelines, the result can cause issues on both sides.
• EXAMPLE – TENT-DWELLING INTERN: One additional example details what can happen when interns aren’t provided for fairly. Entrepreneur outlines the story of David Hyde, an intern at the United Nations in Geneva, Switzerland. Hyde accepted the internship even though he did not have enough money to cover the costs of living in the expensive city during the internship period. His solution was to live in a tent during the tenure of his time with the UN. After his story came to light, Hyde admitted he lied on his application because he’d already been turned down for several internships “because he lacked the means to live while working without pay,” and that “he was trying to draw attention to the fact that unpaid internships inherently exclude young people with less wealthy backgrounds from valuable career experience”. The UN’s Declaration of Human Rights guarantees equal pay for equal work, and thus their actions of hiring unpaid interns caused a disconnect between their stated beliefs and their actions, which is a huge HR faux pas for any organization.
Lastly, let’s listen to and heed a bit of advice from experts on the subject of interns.
ADVICE FROM THE EXPERTS
MarketLeader states, “Internships may seem like an easy way to get free or cheap labor. However, the federal government, and the interns themselves, feel otherwise. If you truly require help, but lack the funds to hire an assistant, consider a piecemeal approach. Outsource your marketing, writing or database tasks. Even one duty taken off your plate frees up time for you to spend on more important aspects of your business.”
This advice may not work for real estate professionals, however, since so many of the tasks involved require a licensed professional rather than an untrained worker.
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SUMMARY
In 2016, 97% of recruiting professionals offered temporary, full-time paid internships with 86% reporting this was a standard practice for their companies. Medium-sized and large businesses most frequently employ interns, and the industries hiring the most interns are: Leisure & Hospitality (41%), Education & Health Services (36%), and Retail (20%).
Trends in internships include: Grants for businesses hiring interns; Millennials viewing internships as positive steps for their career progressions; continued pushback against unpaid internships (including lawsuits); increased need for demographic diversity in workplaces hiring interns; increasing numbers of internships abroad; and the rise of return-ships.
Poorly-handled internships, incompetent interns, or unprofessional bosses can cause ethical, moral, professional, and legal dilemmas for both the interns and the companies for which they are working, as well as for the universities the interns represent.
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Thank you again for your question, and I hope this information gives you what you need. Please contact Wonder again for any other questions you may have!