How Generation Y is trading hourly wages for corporate experience.
The internship, which was once viewed as optional by college students and as “cheap labor” by Corporate America, has taken the front seat as a necessary career builder for college students and as a vital HR tool for employers. In a 2005 survey by the National Association of Colleges and Employers, more than three out of five college hires had internship experience. Likewise, Dr. Phillip D. Gardner, director of the Michigan State Collegiate Employment Research Institute claims that 75 percent of 2007 college graduates held internships compared to 35 percent of college graduates in 1982. The writing is on the wall. The new generation entering the workforce is changing the definition of “intern” for students and employers alike. We call this highly-competitive group the “Intern Generation.”
The intern advantage.
By seeking out more corporate experience, Generation Y is creating a competitive domino affect. They are offering their services and skills as early as high school for little or no compensation in order to gain an advantage over their peers in the post-education workforce. For companies looking for talent, having an internship during college is no longer admired, but expected. This trend is significantly changing the entry-level hiring process at companies across the nation.
A survey from Vault.com claims that 62 percent of college students planned to do an internship in 2007, up from 41 percent in 2005. In respect to the same statistics, 21 percent of college-age workers left the typical “summer job” industry to move into these corporate internships. While many college students attain internships to gain personal experience, the trend of the Intern Generation has forced many to ditch the summer job to compete with peers for professional, resume-building experience.
Age is just a number – it’s experience that counts.
The Intern Generation has taken such drastic measures to obtain valuable experience that they have sparked the development of a new industry – internship placement companies. University of Dreams offers a New York City internship program that charges participants $8,000 for the six-week experience. Likewise, many private schools, including Cincinnati Country Day in Cincinnati, Ohio; the Brunswick School in Greenwich, Connecticut; and the North Shore Country Day School in Winnetka, Illinois have started offering internships for sale at their school auctions – ranging from $500 to $10,000 for an internship at the investment firm Friedman, Billings and Ramsey. Most recently, GQ broke the barriers by putting a one-month internship up for sale on EBay; the final bidding price: $30,200.
As the private schools indicate, internships aren’t just for college upperclassmen anymore. Mark Oldman, the founder and CEO of Vault.com claims that there has been a 30 percent surge in the amount of high school-aged interns since 2001. Companies like Microsoft encourage high school-aged internships while organizations like HighSchoolInterns.com and College Track offer internship placement for high school juniors and seniors.
Today’s interns are tomorrow’s employees.
Since the talent pool is entering the workforce earlier, the top candidates for jobs are being recruited for internships instead of entry-level positions. From an HR perspective, hiring interns is both necessary and cost-effective. An internship has been considered by many as a 10-week interview for prospective employees. It is a time for companies to test out employees and for employees to test out companies. And, the majority of the top candidates are accepting full-time offers at the end of their internships. In a 2006 survey conducted by the University of Virginia, 42 percent of students who held internships their junior year were given full-time offers by the company in which they interned. Of those offered a position, 59 percent accepted the offer. Internships help companies lower their hiring costs and decrease turnover, while at the same time ensuring the ever-important employer/employee fit.
Here are some helpful tips to ensure maximum acceptance rates for full-time offers extended to interns:
- Be sure to assign real, compelling work to interns.
- Emphasize the importance of the work they are doing.
- Position or assign interns with your high-potential manager. This will provide both the manager and the intern with opportunities to make a difference to the company.
- Make the intern feel like part of the team. The more on board the intern is, the more you’ll be able to gauge their skills and the more they will be able to see themselves as part of the company in the future.
- At the end of the internship, show them how they positively affected the team and the company.
Besides the positive recruiting aspect that internship programs bring to a company, internships have also proven to be a valuable retention tool. According to Lori Antieau, Recruitment Manager for Mervyns, “Our retention rates are highest among new college graduates who have spent the previous summer working with us. And, as a result, the number one place we look to find our new, full-time hires is within our own internship program.”
Get ‘em while they’re young.
Because top-level college students are being recruited for internships early in their college experience, companies cannot afford to wait until students graduate to begin their recruitment process. According to Jean Wyer, head of recruitment for PriceWaterhouseCoopers, “If you don’t reach them by their sophomore year, you’ve kind of missed out.” Companies need to approach the college freshman today as they would a college senior. Delaying this process will compromise efforts to recruit the top candidates for full-time roles later.
Recruiting talent for internship programs is equally as important as recruiting for regular positions. Companies go to great lengths to attract interns on college campuses. PriceWaterHouseCoopers recently gained attention by giving away $3,000 spring break trips to Cancun, while KPMG held a party last spring at Ruth’s Chris Steak House in Washington, D.C. for prospective intern candidates. And it’s not just about recruiting for one particular intern season – having interns return to the company after the internship is equally important in order to protect your investment. Firms like Beers & Cutler guarantee their interns return by offering a signing bonus and scholarship program for graduate school.
An internship program – an investment that pays.
Interns benefit a company by reducing human resource expenditures; providing an opportunity to screen potential highly-talented employees; and the convenience of having additional staff during busy seasons. College students and employers need to recognize this growing intern trend – while college freshman need to start an internship as early as possible to gain the best offer from a company, employers need to update their recruiting efforts to establish early connections with college students.
The Intern Generation has already changed the definition of the internship and they are ready to enter the workforce. Are you ready for the Intern Generation?