How paid internships can help boost productivity and cut recruitment costs

Hiring an intern can bag you a motivated member of staff with fresh ideas and new skills: a boost to productivity and your employer brand. Emma Page looks at why interns are worth paying for.

Around 70,000 internships are offered a year in the UK, according to social mobility charity Sutton Trust. But of 10,000 graduates in internships six months after they leave university, at least one-fifth are unpaid. With the average cost of carrying out an unpaid internship approaching £1,100 a month in London and £850 in Manchester, this puts valuable work experience beyond the reach of many.

Under employment legislation, anyone who is acting as a ‘worker’ must be paid the national minimum wage. This means employers have to pay an intern unless he or she is required to complete the internship as part of a UK-based higher-education course, if the scheme is less than four weeks long, or if the intern is simply shadowing an employee and not expected to undertake any actual work. There are some exceptions in the charity sector, but subsistence and travel must be reimbursed.

Following the publication the Matthew Taylor review on working practices last year, Theresa May announced a crackdown on unpaid internships, sending more than 550 warning letters to companies and setting up HMRC enforcement teams to tackle employers advertising for unpaid interns.

Not only are unpaid internships exploitative and a barrier to social mobility, they’re nearly always a false economy. Engineering, IT and investment organisations all woke up to the case for paying interns a decade ago and now have properly structured and well-advertised graduate internships, often leading to permanent positions. But unpaid internships are still rife in the media, charity and fashion sectors.

“It’s not a coincidence that these are where the practice started – the idea of paying your dues has become built-in,” says Tanya de Grunwald, founder of Graduate Fog, a campaigner for fair internships. “Also, SMEs and start ups are bad on paying interns, using the poverty defence of ‘we can’t afford it so don’t pay’.

“Change is happening though – largely because more and more general examples of why diversity is important are emerging. Bad publicity is a good motivator when it comes to big firms.”