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Willing, able... but don’t exploit an intern - FT.com

How can small and medium-sized enterprises (SMEs) ensure the benefits of taking on an intern outweigh the pitfalls?

We love our summer engineering interns at FreeAgent. Young, enthusiastic, talented. I talked to the FT about why interns should be treated as equals and challenged accordingly. 

The FT operate a paywall so I’ve included a copy of the article verbatim below. Copyright is with the FT of course.

Willing, able . . . but don’t exploit an intern
Clear benefits for graduates in working at SMEs

In principle, it sounds like a good idea: an eager graduate, keen to get involved in every aspect of the business – and willing to work long hours for nothing more than bus fare and a cheap sandwich. But how can small and medium-sized enterprises (SMEs) ensure the benefits of taking on an intern outweigh the pitfalls? And, more importantly, how can they make sure that they do not fall foul of the national minimum wage requirements governing work experience?

It is estimated that there are more than 100,000 interns at any one time in the UK on work experience placements of about three months. And while a larger corporate might be the preferred option for many interns seeking impressive names on their CV, there are clear benefits of opting for an SME.

“Outstanding interns make a bigger impact in an SME and get noticed immediately, so advancing your career and position in a company can be far quicker,” says Phil Pinnell, founder and director of Scratch, the fresh meal kit company. “Add to this the chance to work in a small and dynamic team and have more influence on the company as a whole, joining an SME is an attractive prospect for many candidates.”

Lucy Cheatham, marketing director for Grad Central, a graduate recruitment specialist “It is key that small businesses have a clear idea as to what they would like their intern to do. Many of our clients create a full programme that exposes the interns to varying degrees of the business. Not only does this give them a worthwhile spread of experience, but it also maximises the amount of support the intern can provide to your business on a day-to-day basis.

“It is important that graduates and interns understand the potential opportunities that exist within SMEs. Because of the size of SMEs they are better placed to adapt and support interns or graduates during their time within the business. SMEs also pose an excellent opportunity for interns or graduates to really leave their mark on the business and make a good impression. Although larger companies might make for better headlines on your CV, it is also important that the experience you gain is varied and relevant to what you want to achieve.

“Business both large and small have now woken up to the potential that interns and graduates pose to their business, meaning relevant experience and transferable skills are increasingly more important if they are going to secure that coveted role.”

Joanne Douglas, marketing manager at Plan-Net, an IT services company, sees other advantages to working in a company where you can get to know everyone else’s name. “Smaller companies cannot fail in making the experience worthwhile as the intern can piece together the workings of a company much more quickly than in a larger company, even if they’re not being always being hand-held along the way,” she says.

“Exposure to senior management and the decision making of the company, which again is much easier for a smaller company to do, really helps an intern develop a good understanding of the organisation, the world of work and how to conduct themselves.”

The benefits for SME owners are also evident. Alan Townsend, vice-president of business operations for Monster Europe, the global recruitment specialist, says interns can add real value in providing a fresh outlook and new ideas. “The more an intern is inspired by the purpose of the business overall, the more they will be motivated to do this.”

It is a significant investment in time and resources for an SME to attract and hire an intern, he argues, so there needs to be a real opportunity at the end of it. “A company that can prove that is on offer is very attractive – despite being small, large or midsize. The type of intern who is really only looking for brand names on their CV will not be the right match for most SME businesses. However, where an SME can invest the time to attract a more entrepreneurial undergrad it can be a perfect match.”

The key, argues Olly Headey, chief technical officer and co-founder of FreeAgent, an online accounting services provider based in Edinburgh, is not to give interns menial “work experience” tasks. “They should be embedded into the team as an equal. Anything less isn’t going to challenge them, or prepare them in any way for their first job in the real world.”

However, SMEs need to be aware that interns become eligible for the national minimum wage once they take on “worker” status in the eyes of the law – and, more importantly, HMRC. According to the government’s Businesslink website, this can be when an intern is deemed to have agreed a contract with the SME for their work. But be warned, “the contract does not have to be written: it may be implied (ie reflecting what happens in practice in the workplace) or oral (ie a spoken agreement of work in exchange for rewards)”.

There are many, of course, who see this as a good thing. Interns, they argue, are at risk of abuse by companies both large and small. Tanya de Grunwald, founder of careers advice website GraduateFog.co.uk and author of How to Get a Graduate Job in a Recession, thinks interns are exploited as cheap labour and SMEs are among the worst offenders.

De Grunwald has identified a phenomenon she has termed Stockholm syndrome interns. “They are interns who genuinely believe that their employer is doing them a big favour in allowing them to work for them, for free.”

While she recognises the value of work experience, her point is simple: interns should not be seen as free labour. “As for the idea that some SMEs would have to close if they didn’t use unpaid interns, we say find another solution – or close,” she says. “If you can’t afford to pay the staff you need to get your work done, you’re not running a viable business. It is not the job of young, desperate workers to prop up your company.”

Paul Sellers, the national minimum wage policy officer at the Trades Union Congress, echoes her concerns. “We are in favour of high-quality work experience, but it has to have its proper place. We are worried that there is a tendency for employers to substitute interns for paid employees and not to pay the minimum wage.”

An elegant solution is to pay the intern the minimum wage, something many SMEs – and larger companies – already do. Yet despite the pitfalls, the benefits are still apparent – both for the company and the intern, as FreeAgent’s Headey points out. “[One intern] was so good that we offered him a job at the end of his three months, and he has been working for us part-time ever since. The downside to having someone this exceptional on board is that they’re going to be in huge demand once they graduate. This particular guy graduates this summer and, unfortunately for us, has just been hired by Twitter in San Francisco.”

© The Financial Times Limited 2016. All rights reserved.