In a bid to tackle inequality, the Labour government has said it intends to ban unpaid internships unless they form part of an education or training course. Emma Gross outlines the implications of the move for HR and employers.
As part of Labour’s Plan to Make Work Pay, next month’s Employment Rights Bill is expected to include a ban on unpaid internships, a key aspect of a wider commitment to tackling inequality, social injustice, salary discrepancies and promoting social mobility.
This proposal comes at a time when conversations surrounding fair pay, inclusion in the workplace and ethical employment practices are attracting significant attention. While many companies rely on unpaid internships to hire new talent, Labour’s plan marks a significant shift in how companies design their entry-level roles and working arrangements.
For HR professionals, the implication of this ban is wide since it is challenging the recruitment practice and process. However, it also enables fair opportunities to establish more inclusive and sustainable work. Where internships are designed to provide valuable work experience and exposure to students and fresh graduates to enter into the job market, unpaid internships often result in interns experiencing real work without any financial compensation, which impacts the quality of work the interns produce.
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stable backgrounds, for many, unpaid internships are not a financially feasible option, and in such a critical scenario of “exposure versus financial compensation”, a new graduate might prefer to deny such career opportunities if they are not appropriately remunerated.
Labours’ plan is to make work experience and opportunities available to everyone and not just anyone who might be available to work for free. Such a transition will enable young talent from diverse backgrounds to gain valuable and meaningful exposure in a competitive industry, reducing the financial barriers to entering the market.
When internships are only available to those who can afford unpaid work, the pool of talent is narrowed and often directed and targeted towards people from wealthier and less diverse backgrounds, which perpetuates inequality, particularly in industries such as media, fashion, finance and legal practice, where unpaid internships are common in exchange for exposure.
By ensuring that all internships are paid, companies can attract more diverse skill sets which in turn benefits the company’s output. For HR professionals, this shift presents an opportunity to move from the regular internship practice to training programmes that are more reflective of our diverse society. Moreover, greater diversity fosters increased innovation and creativity, which are key drivers of long-term business success.
Benefits of employee wellbeing
In addition to equity and inclusion, the transition to paid opportunities has important implications for employee well-being since, unpaid internships place significant financial pressure on young workers, many of whom juggle part-time jobs or rely on family support to cover living costs while they gain work experience.
From a mental health perspective, unpaid work also poses disappointment and discouragement, as when a student believes that their skillset and education are not worth remuneration, this potentially affects their confidence and ability to grow and develop their skills. This stress often leads to burnout, anxiety and psychological problems. Consequently, paid internships ease this burden by ensuring that interns can focus on their professional development without worrying about financial stress.
From an HR perspective, promoting an employee’s wellbeing may also increase engagement and productivity, adding kudos to the company’s reputation since a morally responsible employer is more important than ever in recent years. Young professionals are increasingly looking for such employers, therefore it is high time for employers to raise their employment standards and uphold modern practices. Moreover, paid internships can be a key selling point when recruiting early-career professionals, exhibiting the fact that the organisation values and respects its workers at every stage of their career.
By aligning with Labour’s plans and moving to paid internships, businesses can strengthen their employee brand, attract top talent and position themselves as leaders in ethical employment, building a loyal and engaged workforce.
Practical considerations
While transitioning to this “not so new yet rare practice”, certain factors are important and critical when planning from an HR perspective. For example, for small companies, the cost of a trainee might be a problem however, certain strategies might negate such restrictions such as:
- Shorter internships: Focus on specific projects or skill sets, companies can ensure that interns gain meaningful experience in a short timespan
- Flexible working schemes: Remote job opportunities are a two-way street, beneficial for both employee and employer since it ensures reduced costs (such as commute, technical support and setup) and enables a work-life/work-study balance
- Collaborating with educational institutions: A co-funded internship programme between institutions and companies can reduce the financial burden on companies.
Preparing for a ban on unpaid internships
HR professionals should prepare their organisations for a possible ban on unpaid internships as Labour’s proposals gather momentum. This may include reviewing current internship programmes, transitioning unpaid roles to paid internships and ensuring compliance with upcoming legislation.
While this transition may present logistical and financial challenges, it presents a unique opportunity to create a more inclusive, ethical and sustainable approach to practice. By embracing these changes, HR professionals can help their organisations stay ahead of the curve, foster a positive workplace culture, and attract a more diverse and engaged workforce. As Labour’s plans move closer to reality, now is the time for businesses to act proactively to ensure their apprenticeship schemes are aligned with future fair employment practices in the UK.
The Employment Rights Bill is expected to be laid before Parliament by 10 October 2024.
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