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Unpaid Interns: Exploitation Much?

In light of the unfortunate death of a 21-year old Bank of America Merill Lynch intern, after he worked extra hours, we were faced with one of the major debates surrounding the talent industry today –  ”Should interns be paid?”

The CEO and co-founder of Letsintern, Rishabh Gupta, talks about  his take on the matter.

There is the raging debate across the west – “Is it OK to not pay interns?”

Most of the leaders out there are clear on this.  Everyone who works for an organization merits a salary; a salary which should ideally not be lower than than the minimum daily wages set for that country. But there are some notable proponents of the theory that organizations gain little from the interns. Since it’s more  like training or education for the them hence the intern doesn’t qualify for a pay.
As a co-founder of India’s largest internship platform and also the one which works with some of the biggest names in the industry be it organizations, NGO’s or colleges – we thought we must share our opinion on the same.

(Disclaimer 1: By internships we mean full time or  part-time internships, other forms as volunteers or campus ambassadors are not discussed in this framework)

I will tackle this in classic debate style by taking the most prominent premises and debunking the life out of them. So, firstly let’s deal with the myth that says that  interns do not contribute. I would NOT even argue the 10 mins they save you in getting a coffee, getting print-outs done or some other mundane chore is 10 minutes saved. I am sure most professionals value their own personal 10 mins. If you are paid Rs. 50,000 per month and work 8 hours – 5 times a week. That’s still a Rs. 20-Rs. 30 saved off your productive time. Multiply this by the intern minutes and you probably have a simple math on how much work did an intern do. (Disclaimer 2: We only recommend ‘quality’ job roles. The example of ‘getting you a coffee’ is the least expected of an intern – This is a common misconception. You as a manager are expected to create scenarios for interns to contribute effectively.)

This is not even the argument I would like to put forth. Here, I am putting forth the biggest headache of all organizations – HOW TO FIND GREAT TALENT? As organizations move more and more into knowledge economy – the need for smart, energized, passionate people who can deliver has gone through the roof. Are these not the words in every job posting?

Interns are organizations’ way of sampling young talent, deciding what to keep and not to keep.  If a firm hires 6 quality interns (quality because no one hires interns they don’t feel add value) – chances are 1 would shine through. If you do the math, it is still lower than the cost you would pay an HR consultant/firm for the hire with almost no trial period. You are paying 50% less and getting a trial period with also an option to remove the resources completely without owing any future liability. Removal costs of a hired employee are higher than hiring him. Thus, any organization claiming it does not derive value from interns  is not only bull-shitting itself, but everyone around. The opportunity cost benefits are immense and thus they have the value. Please note, I have not even taken into account that most interns add value by what they do as well – and therefore provide tremendous value for the cost one might incur on them.

Average stipend in India varies between Rs. 3000-Rs.15,000 per month and we must pay our interns accordingly. Developers and designers sit pretty on the higher end, MBA’s and other professional courses sit in the middle while the lower end is crowded by arts and commerce graduates. So this is a plea to any well meaning organization reading this – Pay your interns. They do add value.

The second defunct argument is interns are using our resources to learn etc. and therefore we are providing them with opportunities which they should be grateful for. In that case, I would just like to ask these smart managers that if they love their job and  enjoy it even 50% do they should return half their salary to the organizations they work for, as they are also being provided with resources, learning, opportunity etc. to live their dreams. A gigantic favor by an organization as viewed by their lens. It is so simple, it is in an organization’s’ best interests to mold talent in its spirit and culture. The cost of growing talent internally is far lesser than acquiring talent from outside. Here I would really like to stress that interns add more value than the few thousand rupees you pay them. Interns are most often hired for the least complex but absolutely necessary to-do tasks and these tasks are the loose ends you need to make the overall product, service, operation complete. I cannot emphasize enough on the basic blocks which interns provide for others to build on top off. We use them for first drafts of design, projects, codes, social media strategies, presentations, business development. Its like handing over a construction with the foundation laid. Its priceless to reduce the time of execution.

Well, some of you may at this point quote unnecessary examples of how interns disrupted value creation and were of “NO USE” etc. – well haven’t we had the same experience with employees? Have we stopped paying them? There will always be cases of bad hiring, on-boarding, poor talent. but the fact that you chose them, trained them and trusted them is as much as your fault as it is theirs. Both of you just did not have the right fit, as do almost 40% of employees in most organizations.

So to me, this problem is not about paying or not paying a few thousand bucks or a few hundred dollars – it’s also about the basic human right to being paid for services rendered, the basic need for a free economy where companies cannot exploit the singular person. We don’t need unions or regulations, but just enough companies paying up so that others follow suit or lose the best talent.

When we started Letsintern in 2010, about 90% organizations never paid their interns. As the market place grew, more companies started offering intern stipends and higher too, forcing the other fence sitters non payee employees to dig into their pockets and fight for the best talent. An equal opportunity marketplace changes the scenario from 10% paid – 90% unpaid to 70% paid and 30% unpaid. This change is the very testimony to the fact that organizations do value interns. Why else would companies cough up as much as Rs. 25,000 for graduates and upwards of Rs. 100,000 for some premier B-school students?

Thus, there is both a logical and empirical validation to the fact that interns add value and its a valid conclusion that Interns must be rewarded. If you can’t pay in cash, pay in kind – merchandise, free phone credits, free something else and most of all rewards for their performance. Talent is what will grow your organization, be ready to make small investments in it.



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