Unpaid Internships: Get on the Right Side of History(employerblog.internmatch.com)
employerblog.internmatch.com
Unpaid Internships: Get on the Right Side of History
http://employerblog.internmatch.com/unpaid-internships-get-on-the-right-side-of-history/
15 comments
I have really mixed feelings about this. As the founder of a self-funded, bootstrapping startup, every dollar that we spend is coming out of my $dayjob salary, which really limits what we can spend on paying other people. Even paying minimum wage is probably not a realistic option.
And, I think an unpaid internship can be a win-win for both parties in at least some situations.
And, as a libertarian, I reject the notion that the govt. has any business interfering in private contractual arrangements that don't involve the use of force or fraud.
So, would we offer and engage in an unpaid internship at Fogbeam Labs? Well... I don't know. As I said, I don't think they should be prohibited, but the idea also leaves something of a sour taste in my mouth.
We've been talking to some intern candidates over the past couple of weeks, and the idea we've been batting around is to offer a fixed sum stipend, on the order of a few thousand dollars, as compensation for a 6-8 week internship, where the intern would be asked to contribute around 20 hours / week.
8 * 20 = 160 hours, and at $10.00 / hour, you'd be looking at $1600 dollars. The number we have in mind is higher than that, so I guess we actually are talking about paying more than minimum wage. We could only afford to take on one intern at that rate though, but that's probably OK... I doubt the founders have the bandwidth to manage more than one intern anyway.
And, I think an unpaid internship can be a win-win for both parties in at least some situations.
And, as a libertarian, I reject the notion that the govt. has any business interfering in private contractual arrangements that don't involve the use of force or fraud.
So, would we offer and engage in an unpaid internship at Fogbeam Labs? Well... I don't know. As I said, I don't think they should be prohibited, but the idea also leaves something of a sour taste in my mouth.
We've been talking to some intern candidates over the past couple of weeks, and the idea we've been batting around is to offer a fixed sum stipend, on the order of a few thousand dollars, as compensation for a 6-8 week internship, where the intern would be asked to contribute around 20 hours / week.
8 * 20 = 160 hours, and at $10.00 / hour, you'd be looking at $1600 dollars. The number we have in mind is higher than that, so I guess we actually are talking about paying more than minimum wage. We could only afford to take on one intern at that rate though, but that's probably OK... I doubt the founders have the bandwidth to manage more than one intern anyway.
Author here - good point about bandwidth. We typically see that companies that can't afford to pay "x" interns typically don't have bandwidth to manage "x" interns.
If you were to hire an unpaid intern - are they not creating any value for you (or very little)? Then why are you hiring them? If they are creating value for you, then that should be extra money in the pool, and some of it should go to the intern. What am I missing?
If they are creating value for you, then that should be extra money in the pool, and some of it should go to the intern. What am I missing?
The time delay between creating the value and turning that value in money. In a situation like ours, a pre-revenue, bootstrapped startup, we can create a ton of value, but nobody knows exactly when our first (and subsequent) sales will be.
Now, if an intern wanted an arrangement with deferred compensation, contingent on some future revenue, etc., etc., that could theoretically be arranged. But it probably wouldn't be worth the effort to do all that.
OTOH, value can be exchanged in other ways other than money. An intern who works for "free" in the monetary sense may still benefit from the situation. A strong letter of recommendation and a verifiable reference to put on the resume represent a form of value as well.
But, all of that said, I'm still not super crazy about unpaid internships. Like I said above, if we take on any intern(s) we are looking to pay them.
The time delay between creating the value and turning that value in money. In a situation like ours, a pre-revenue, bootstrapped startup, we can create a ton of value, but nobody knows exactly when our first (and subsequent) sales will be.
Now, if an intern wanted an arrangement with deferred compensation, contingent on some future revenue, etc., etc., that could theoretically be arranged. But it probably wouldn't be worth the effort to do all that.
OTOH, value can be exchanged in other ways other than money. An intern who works for "free" in the monetary sense may still benefit from the situation. A strong letter of recommendation and a verifiable reference to put on the resume represent a form of value as well.
But, all of that said, I'm still not super crazy about unpaid internships. Like I said above, if we take on any intern(s) we are looking to pay them.
Concerning the libertarian argument, a counterpoint is that the student is kind of "forced" to do an internship.
The goal has always been that you compensate a person for their time. Time can always be equivalent to money. It doesn't make any sense to bring someone in, have them bust their tail to create or work on bettering something and yet they don't get paid. If you are good at something it shouldn't come free. To me that exposes the culture and ethics of a company. Not only how they treat employees but also its interns. The goal of a founder/entrepreneur is the sense that we get to create our own great businesses and or products and create opportunities for others. Interns today, bring in not only fresh ideas that support the founders but also they also many times your greatest ambassadors. What message are we sending when we don't pay them and force them to find another job outside of this internship so they can support themselves and the companies they works for free? It would be the same as Being the entrepreneur that works hard to create a product that is suppose to sell but everyone takes from you for free yet you are spending the money to create. You'll go out of business because you're just burning cash. It's the same philosophy in having working interns. In short, Pay Them!
I've had both paid and non-paid internships and I've been fortunate enough to have the non-paid internship turn into a contract position and then a full-time position. However, what scared me about each position is that I was never told upfront if there was real possibility for a full-time position. I'm still against non-paid internships, but at a minimum, if you must have an unpaid intern, at least let them know whether or not that internship can realistically turn into a full time position or not and what benefits there will be as an unpaid intern. Set those expectations, that way at least the potential intern can weight the pros and cons for themselves whether or not the unpaid position is really worth their time.
We have had unpaid interns before, as have a lot of companies I know. The difference is you can't find CODERS to be unpaid interns. Every person whose trying to break in to marketing, social media and PR etc., we have no real use for them right now.
I wouldn't be hiring a PR or Marketing person otherwise, it isn't necessary. Numerous times friends of friends have asked for an internship, I've said we aren't ready to hire in that position yet, and they have offered to work for free, for experience, or for college credit.
The better way of alleviating this is to have a skillset that not everyone else has, that any college graduate can't duplicate.
I wouldn't be hiring a PR or Marketing person otherwise, it isn't necessary. Numerous times friends of friends have asked for an internship, I've said we aren't ready to hire in that position yet, and they have offered to work for free, for experience, or for college credit.
The better way of alleviating this is to have a skillset that not everyone else has, that any college graduate can't duplicate.
Here's a publication from the Department of Labor concerning the legality of unpaid internships in the United States: http://www.dol.gov/whd/regs/compliance/whdfs71.pdf
As someone who goes to a state university in the silicon valley, none of my peers have received any unpaid internships. The lowest paying internships that I have heard of are $25/hour.
Author here - The unique requirements at many Silicon Valley companies for rapidly scaling teams require robust, well paid, competitive internship programs. The famous perks at Google, Facebook, etc. definitely extend to internship programs for good reason. We don't know the exact numbers, but somewhere around 50% of all internships in the US are unpaid.
Who benefits from unpaid internships and how much? Not paying for internships eliminates students who cannot afford to work for free.
Do these exist at all in tech? It is not something I have heard of, or can even imagine.
Author here, good question. We see that tech internships are much more likely to be paid, in large part because technology companies recognize the tremendous value of internship programs for fueling their new grad hiring.
"median full-time salaries of young women are 8% higher than those of the guys in their peer group"
Their peer group being under 30, childless, unmarried, metropolitan. These are probably strongly skewing caveats but sounds exactly like the market that internmatch targets.