Source: Real Business
5 April, 2013 in News by Jess McGreal
Paid internships are not just for the FTSE 100. SMEs who offer paid roles for young people can attract greater talent, add value and ultimately boost business.
In a world where experience trumps education and personality trumps all, internships are an essential stepping stone to the professional career. Today, the traditional two week placement has transformed into three month extravaganzas with a fifth of young people now entering their chosen industry via unpaid work. Employers have been criticised for utilising interns as a means of cheap labour they can easily exploit, in a climate where unemployment rules and austerity reins.
Industries from fashion to finance have been accused of employing unpaid interns to fill gaps that would otherwise be occupied by paid employees. Large companies are not the only ones to blame – SMEs also need to rethink their approach to internships, in order to attract wider talent, motivate staff and, ultimately, add value.
Talent is value
Paid internships could boost business by attracting the best of new talent. Only offering unpaid roles means SMEs are restricting their staff search. Recent Trade Union Congress (TUC) research revealed that “internships in London are out of reach of most of the UK’s youngsters.” A whopping 78 per cent of 18 to 34-year-olds could not afford to live in London for an unpaid internship. For business, this means missing out on three quarters of the talent pool from the word go.
“Just because it’s a short term commitment doesn’t mean it should be unpaid by any stretch of the imagination,” says Rob Blythe, co-founder and director of Instant Impact: a recruitment company which unites fast growing SMEs with the best students and graduates from top universities.
“Instant Impact offers paid internships to small firms that are growing so quickly that time is more a constraint than money,” Blythe explains. “They are really looking for the very best people and we are trying to find people that can make a real difference straight away. Companies are often less constrained by cash and more by the quality of their people and time to look for new interns. There are some incredibly talented people out there, who are potentially more cost effective than other employees,” he adds.
Interns can be both valuable and cost effective in the everyday running of many SMEs. The majority (84 per cent) of employees who have worked in a company that employs interns believe they are a useful addition to their organisation, revealed research commissioned by Internocracy. Internships no longer comprise of making tea and filing, now interns are given more responsibility and become an essential part of the team.
Daniel Todaro, managing director of Gekko argues: “Unpaid interns may be a method of balancing the books right now, but how about in ten or twelve months’s time when the business has little continuity, low morale, employees fearing for their jobs, and zero stability. The old adage of spending money to make money could not be truer, and that investment has to be in people first.”
Avoiding costly consequences
Shockingly, the majority of business leaders are unaware that unpaid internships could be costing companies in the long run. Only 12 per cent of managers understand that for-profit companies may be breaking the law if they offer unpaid placements.
Employing an unpaid intern for long periods of time, regardless of how the job was advertised, the title or contract, for-profit organisations could be breaking the National Minimum Wage (NMW) Act 1998. To date, all interns who have taken their employer to court have won. (You only need to think back to the prominent news story concerning the Poundland court case in February, where a judge ruled in favour of a jobless graduate.)
Libby Page, campaigns and policy coordinator at Intern Aware, a national campaign group for paid internships, reminds employers: “In many cases unpaid internships are illegal as they breach National Minimum Wage legislation that states all workers are entitled to a wage, so by not paying their interns companies could also risk being taken to an employment tribunal and facing legal action and fine. Intern Aware have helped interns claim back money from previous employers and have been successful.”
Many employers are also unaware that last December, Labour MP Hazel Blears introduced the Internships (Advertising and Regulation) Bill. This legislation aims to ban the advertising of unpaid internships and regulate the conditions of employment. Said Blears: “In the current economic climate it is all too easy for unscrupulous employers to exploit the hopes and dreams of young people by offering long-term unpaid internships which require them to work for free.”
To make this reality takes time. Parliament have yet to hear the second reading of the Bill.
A great option for SMEs to attract talent – without spending money or breaking the law – is to offer traditional two week work experience placements. These allow graduates who cannot afford to work for free on the long term to gain essential industry experience.
Eulogy! a top 15 independent PR agency offers these types of placements throughout the year, helping young people trying to break into the industry. Adrian Brady, CEO and founder of Eulogy! notes: “Over 10 per cent of our workforce started as interns here. They understand your culture from the bottom up and tend to be loyal, as you have given them an opportunity. We get back great enthusiasm and – without sounding all high and mighty about it – you actually can feel good about giving someone a chance and help them create a job, because it’s not just us who creates it, it’s them too.”
There is no denying it – internships are here to stay. They offer a chance for young people to gain key skills and expertise to succeed in business. But current epidemic unpaid internships must stop. Graduates need to be a valued element of an SME’s work force in order to allow Britain to become a great entrepreneurial hub where business can flourish.