Cary Curtis, founder and managing director of specialist SME graduate recruiter Give A Grad A Go, explains why unpaid internships are a lose-lose situation. He argues that this trend must be reversed to ensure maximum return on investment for both graduates and their employers.
When asked about company values, one of the first things most leaders of small and medium-sized enterprises (SMEs) will say is: ‘We value our employees’. Many executives believe their companies do. Yet relatively few of them actually demonstrate this when it comes to interns.
The following story illustrates this point. An employer was debating with his HR department about the pros and cons of starting an internship programme, when the topics of pay and training came up. The employer asked, ‘What if we invest in them, and then they leave?’ The HR manager replied, ‘What if you don’t invest in them…and they stay?’ He went on to point out that if they didn’t pay the interns and invest in training them, then these promising new employees would leave anyway.
Unpaid internships still exist
Despite the fact that it’s simply the right thing to do, and that graduates on paid placements deliver greater value than unpaid ones, thus far in 2011, 30 per cent of all internships and placements listed on the government-run Graduate Talent Pool have been unpaid. It’s logical to ask why. First, nearly 1 million 16 to 24-year-olds in the UK are out of work, the highest level since 1995. This makes the graduate-hiring market very competitive. Second, the current economic and business climate in this country has encouraged many enterprises to use the soft employment market to take advantage of interns. On the other hand, many graduates are desperate to be able to list a position – any position – on their CVs.
Yet this approach is ‘penny wise and pound foolish’. By not investing in their graduates, employers are saying that they don’t expect to derive any value from them. Also, employers who have not committed actual salary to a graduate are less likely to focus on creating a positive experience for that person. From the other perspective, if employers expect nothing from them, then the graduates will expect to gain little from their experience and are therefore unlikely to ‘go the extra mile’.
Why pay for what you can get for free?
One of the top motivators for humans is self-achievement; in the workplace, this refers to the sense that we are valued by our colleagues. Employers support this need for self-achievement by recognising individuals for their contributions – even with a simple ‘thank you’ – and by giving them work to do that is meaningful and rewarding for them and the company.
In the case of internships, value should be a two-way street. The employer-intern relationship should be a positive one, built on mutual trust. Graduates should expect to gain invaluable knowledge, experience and, yes, cash for necessities like food and rent; in return, they must work hard, do their best, and seek out ways to deliver real value. Employers should expect to gain enthusiastic, productive workers who add significantly to their businesses. They should treat their employees with respect, help them grow, and compensate them for their time and effort.
To expand on this theme, even employers driven by purely mercenary motives will recognise a number of benefits from offering paid placements, including:
New ideas – Young people are brimming with ideas, and they can offer perspectives that long-time colleagues may not have. Plus, they are eager to impress.
Talent – Assuming the employer takes the time to screen candidates well, they will be gaining high-talent, low-cost team members. Plus, by offering a wage, even a reduced one, they don’t price a lot of graduates who can’t afford to work forfree, out of their recruitment market.
Cost-benefit – Given the chance, graduates can have a significant impact for their employers, at a very good price point.
Trial run – Great temporary graduates can become great full time employees, and paid placements offer a low-risk way to find the best ones.
Lower onboarding costs – Placements who become employees will be highly productive from day one, with minimal additional training required.
Backing a winner
SMEs account for 99.9 per cent of private sector businesses in the UK, and most of them would benefit greatly from a robust graduate recruitment programme. However, many SMEs don’t know where to start.
For many, it boils down to commitment, involving the following key steps.
1. Pick the right ones – Many smaller businesses place an advertisement in a local newspaper or post a position to a government-backed website, conduct general interviews with a few people, and hire someone based largely on ‘feel’. The hiring of great graduates depends on developing a solid job description, measuring candidates against that brief, and taking a professional approach to selecting the right person.
2. Set expectations – Once the hiring process is complete, it is crucial to set mutually agreed expectations, built around meaningful work. This ensures that both employer and graduate understand clearly what value is being measured from their joint experiences.
3. Invest – This refers to pay, as well as broader support, which can range from formal training opportunities to the simple act of making graduates feel a part of the team by welcoming them and including them in appropriate company matters and events.
4. Provide feedback – New graduates nearly always need more input and guidance than more experienced colleagues. By establishing formal feedback mechanisms, both sides will remain on the same page.
Graduates repay investment
Employers that demonstrate commitment to their graduate programmes can expect to have their expectations met as well. This means they have earned the right to expect the graduates on a placement with them to (at the very least):
• show up on time
• be presentable
• offer to help in any way
• be respectful
• ask questions
• work hard
• remain focused
The best of course will go much further than this, exceeding expectations in terms of work delivered, creativity, ideas, enthusiasm and team-building. Conversely, if you expect your employees to work for free, then don’t expect them necessarily to offer any of the above attributes. The chances are, they’ll be too preoccupied with searching for paid work, and figuring out their next career move.
With the pressures they face, today’s graduates represent an enormous reserve of enthusiasm, creativity and talent. Some employers may be tempted to think they can get all this for free – after all, if graduates are desperate enough, surely they will seize any opportunity? But then, ask yourself if you really want someone working for you out of desperation.
To ensure maximum return on their investment, employers must take the time and attention to hire, and then nurture their people, set appropriate expectations, and above all pay individuals what they are worth. For their part, graduates must repay this investment by truly committing to their position, and by continuously adding value. After all, you’ll be giving someone their first big break – don’t think they won’t appreciate it.
About Give A Grad A Go:
Give A Grad A Go (GAGAGO) was started in 2009 by Cary Curtis. Its mission is to provide today’s talented and hardworking graduates with exceptional career opportunities within dynamic and ambitious businesses. GAGAGO specialises in placement-topermanent SME graduate recruitment, and is the leading player in the SME marketing, IT and finance sectors.
Source: PKF Accountants & Businesses Advisors, Cary (founder of Give A Grad A Go)