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With the job market starting to cool off internships will play an even bigger role for college students in finding a job, and for employers that are trying to hire well-qualified candidates. Here are some tips for both hiring managers and job seekers navigating the tricky labor market.
Things are getting tough for new graduates. Job offers are drying up. The jobless rate among recent grads is at the highest level since 2016 — with the exception of the pandemic summer of 2020. Unemployed workers in general are finding it harder to land a new job. The number of job listings is back to its pre-pandemic normal and the amount of time spent by applicants on finding a new job is creeping up.
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Internships are increasingly key to an offer. Many employers treat them as auditions, in which they get an extended look at a possible hire without a major commitment. In a crowded market, demonstrated, relevant experience via an internship often counts for a lot more than an applicant’s GPA. Firms in finance, consulting and tech in particular are likely to hire from among their prior interns. Even if a graduate doesn’t land a full-time job where they previously interned, a good track record as an intern doing related work can lead to an offer elsewhere. In one survey, 80% of employers cited internship programs as their top recruiting tool.
A sign of how key internships are: 60% of graduating seniors have done one. At the most selective colleges, the figure is more like 90%. A major benefit those schools offer is their deep networks of contacts at leading firms, and the ability to place students with them. The ability to open those doors is a valuable component of the overall experience of attending an Ivy League or other top-echelon university.
Also, note that the nature of internships is evolving. Short-term programs are gaining in popularity. They let students get their feet wet and make an impression on prospective employers, who can cycle through a lot of potential future hires with minimal commitment. Parker Dewey was founded to arrange “micro-internships,” which total less than 40 hours and pay participants $20 to $25 per hour. Another site, virtualinternships.com, sets up online gigs for students looking to work at foreign firms.
For employers considering hiring interns, whether to pay is a major decision. Unpaid programs are OK but should meet certain criteria to not run afoul of labor laws. For starters, there must be a clear benefit to the intern, in the form of gaining skills and experience (and often, academic credit from their university), and it should be clear up front that the work is unpaid. Still, paid internship programs will naturally draw more and better applicants, likely leading to better performance while the program lasts, and a bigger pool of qualified applicants for full-time jobs.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
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