My first job out of college was in the magazine world. At the time, most entry-level positions in the industry were internships. And most internships were unpaid. I talked my way into a full-time job because I couldn’t afford to take an unpaid gig. Still, the prevalence of unpaid internships shocked me. Didn’t that mean that only rich or well-connected people could break into the industry?
Thankfully, some things have changed. A majority of interns (60.8%) are paid, according to the National Association of Colleges and Employers (NACE). But that still leaves a considerable number who aren’t. I understand that when your company is small, and your budgets are tight, it’s tempting to go the unpaid route. But take it from me: When you don’t pay your interns, you’re losing out. Here’s why, at Hint, we only offer paid internships.
1. Budgeting for an intern can reveal if you genuinely need one, and you’ll value their work more.
It’s easy to bring interns on board for the wrong reasons when you aren’t paying for them. I’ve seen CEOs bring on multiple interns to give the company the appearance of a higher headcount, even though they aren’t sure what they’re doing. But having bored or low-productivity interns can hurt your company image and culture. The effects are far-reaching. Maybe you’ll see negative reviews on Glassdoor. Or you’ll sense a general air of inertia at the office.
Planning for paid interns forces you to consider them an essential part of your company. The moment you have to put money behind your decision to hire interns, you know that you need them to run your business. And you’ll treat them accordingly. It all pays off for the interns, too. NACE has found that paid internships are far more likely to lead to job offers.
2. Paying interns will help you stay on the right side of the law.
In the U.S., the Federal Labor Standards Act (FLSA) states that businesses must compensate interns if they potentially contribute to your revenue. If the primary purpose of the internship is educational or training-based, compensation is not required, but internships that fall into this category are rare except at large companies. The last thing you want as a CEO or manager in a growing company is a potential labor complaint. Not only will it create a ton of headaches and extra work for you, but the negative PR could make it harder for you to hire in the future. Paying interns a fair wage will help keep your company out of trouble.
3. Offering compensation will attract the best candidates, not just the ones who can afford to work for free.
As a female CEO in a male-dominated field, I understand the importance of a diverse workforce. To make the best decisions, you don’t want all the stakeholders to come from similar backgrounds. I care about representation in the corporate world, and that extends to making sure internships aren’t only accessible to the wealthy.
When you don’t pay your interns, you’re shutting out candidates who don’t have the financial means to perform unpaid labor. But it’s not just about fairness; a study published in Harvard Business Review has found that teams work better when they’re cognitively diverse. When you don’t restrict your talent pool to the people who can afford to work for free, you’ll be able to choose from the best array of candidates.
No matter where you recruit your interns from, one thing’s for sure: Compensating them pays off. You’ll have access to better talent, and you’ll be playing fair. And a deep commitment to equality will affect your entire workforce, not just the ones who are only there for a few months.