Hard work doesn’t always pay

Does it ever make sense to contribute your labour free of charge? Matthew Lewis, then an out-of-work masters graduate, decided it did. Sadly, the introductions to employers promised in lieu of a salary never materialised. Instead, he spent six months interning at a business development consultancy making sales calls without pay or commission. “I did the same job as the guys who hired me – but they were salaried and I wasn’t,” he says.

His is not an isolated case. Reports abound of unfair practices. In February, a BBC documentary, Who Gets the Best Jobs, highlighted the prevalence of unpaid internships in the world of fashion PR. More recently, HSBC’s legal division was accused of nepotism and bolstering social inequality when a senior employee implied that his department limited work experience to the offspring of its own executives. In April, Nick Clegg, the UK deputy prime minister, said Whitehall would ban informal internships as part of a drive to improve social mobility.

Now the controversy has been stoked further by former intern Ross Perlin. In an exposé of questionable practices, Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy, he estimates there are 500,000 unpaid interns in the US, subsidising corporate America to the tune of $2bn a year.

However, stories of employers in fashion, politics, advertising and the media giving a leg-up to sons and daughters of acquaintances, or taking advantage of jobless graduates desperate for an inside track, paint a partial picture. For every alleged abuse there are also companies using internships to spot outstanding potential and beat competitors in the annual scramble for the best students. “For us, internships are an investment,” says François de Wazières, international recruitment director at L’Oréal, which recruits 3,400 interns worldwide – and pays them. He says they receive an average of about £1,500 ($2,400) in the UK and €1,400 ($2,000) in France.

Some interns at other companies receive non-financial rewards such as a phone after working on a campaign for a mobile phone brand. More important perhaps, practical experience can be a crucial springboard into employment as employers often see it as vital way to spot talent. The creative industries have a tradition of doing this. Like many agencies, marketing group Iris Worldwide hosts unpaid students and encourages them to brainstorm and work up ideas. “The thing [students] need most is experience and access to people in the industry,” says Ian Millner, the chief executive.

The counter-argument is that giving employers a free ride with un­paid labour props up companies that would otherwise go out of business, depresses wages and limits the career options for students who cannot afford to work free. Mr Perlin also argues that internships take away opportunities from regular workers.

When does give and take tip over into exploitation? In the UK, it boils down to whether an individual falls within one of four exemptions to the National Minimum Wage Act: volunteers; voluntary workers; work-shadowing/work experience; and students on course placements. Simply labelling someone an intern is not a get-out, says Alison Clements of Lewis Silkin, the law firm. What matters is whether “they are performing real work” and are obliged to work fixed hours.

Adam Foreman, a partner at Littler Mendelson, the law firm, says US law that guarantees interns a minimum wage is often ignored. Because “the interns are hoping to turn their internships into full-time jobs”, he says, transgressors are rarely hauled before the courts.

In Intern Nation, Mr Perlin dissects the employment practices of some of the world’s biggest corporations, inc­luding Disney, which he accuses of replacing “well-trained, decently compensated full-timers” with an army of low-paid interns. But for employers that approach recruitment strategically, internships are typically a cost – albeit one they hope will pay off in better, happier recruits.

By September this year, the UK division of PwC, the professional services firm, will have recruited about a third of its 2012 graduate intake from its summer vacation interns. Over the coming weeks, the group – selected through open competition – will be paid a graduate starting salary, meet clients, receive training and tackle a project. “Our recruitment tools can tell us whether a candidate is right for us,” says Richard Irwin, head of student recruitment. But without this kind of hands-on experience, “what the candidate might not know is whether we are right for them”.

All too often, says Rajeeb Dey, founder of Enternships, which arranges work placements in smaller businesses, employers fail to think through “what it means to have another person inside the company” and interns end up “running random errands”. They leave with a negative perception of the business that they may pass on to fellow students, including via websites such as Interns Anonymous.

Allowing interns “quality time away from their desks” so they can explore the organisation is important, says Jennifer Cook, a graduate rec­ruitment adviser at Linklaters, the law firm. For John Cordrey, a 2010 PwC tax intern, networking with other functions led to a change in his career plans. He is now set to join PwC’s corporate finance team instead of the tax division of a rival, whose internship was “less flexible”, he says.

As the expectations of students change, so must internships. Mr de Wazières says L’Oréal “sells” its international careers to graduates. Until 2009, all interns did their placements in their home country, which for internationally minded high-fliers was frustrating. “For the current generation of students, early international experience has a much bigger appeal.”

Do’s and don’ts for interns

● Check out your chances. Ask how many interns are made permanent. If the answer is very few, this may indicate that interns are seen as a cheap expedient, rather than as future employees.

● Establish the ratio of interns to staff. A high ratio can be a sign that the employer’s business model is unsustainable.

● Check the work will be relevant. Also check what training you will receive and who will manage you.

● Decide if the internship will develop your skills. Is it merely a job someone else would have to do? Ben Lyons, co-director of campaigners Intern Aware, says he has come across advertisements for “intern receptionists and cooks”.

● Don’t be lured into working set hours without pay. Working flat-out can leave you no time to search for salaried employment.

● Don’t be afraid to look at other options. Becky Heath, co-founder of campaign group Internocracy, says that volunteering may teach you more than a business that treats interns as free labour.

Source: Alicia Clegg, FT.com, Thursday 23rd June 2011