This story is part of Fast Company’s editorial package “The Intern Economy.” In the spirit of back to school and new opportunities to learn beyond the classroom, we’ve collected the personal stories of interns and managers to reveal what this step on the first rung of the career ladder means for the future of work. Click here to read all the stories in the series.
Type “Internships are” into Google, and you’ll get a list of fill-in-the-blank predictive suggestions such as: Hard to get, slavery, important, illegal, scams, paid, boring, exploitative, stupid, and overrated. Tell us how you really feel, internet.
The fact that people actually search for those phrases may be a litmus test that reflects the generally sour sentiment surrounding internships as stale leftovers of the Devil Wears Prada-like nightmares and Monica Lewinsky linger.
That doesn’t mean internships are falling out of favor, nor that all of them require grunt work for no monetary or professional reward. A report by the National Association of Colleges and Employers (NACE) suggested that intern hiring would increase by 2.9% in 2019 and found that offer rates, acceptance rates, and intern-to-employee conversion rates all increased year-over-year. The average hourly wage for an intern is also the highest it’s ever been, at $19.05. Interns at big tech companies like Facebook, Amazon, and only a little ironically, Google are making the most, with a median monthly income upwards of $7,500, according to Glassdoor.
Those numbers don’t speak to how interns are treated on a human decency level, but as the workforce evolves, companies are finding better ways to forge mutually beneficial relationships with its most junior members. Some are even leading the charge to democratize the system of internships and create a more sustainable workforce for the future.
Creating a talent pipeline
Although the concept of apprenticeship has been around for centuries, internships as we know them have been around since the end of World War I, when the title referred to a doctor in training, practicing without a license. Panasonic was founded in that same period, making it a 101-year-old company this year. To sustain internal innovation, it’s been focused on pipelining college-aged talent into its internship programs before converting them to full-time employees, for about as long as the company’s been in existence.
Panasonic connects with students at universities around the country, as well as on websites like Glassdoor, LinkedIn, and Indeed to diversify the company with candidates who contribute fresh ideas to its more curated culture.
“I think there’s a difference between the way that Gen Z and millennials view the world,” says Mary Battle, employer branding and campus programs lead at Panasonic USA. “There is no better way than to bring in interns who are able to help us, for example, synthesize data to communicate it to executives,” she says. “It helps us to think differently about things that we’ve been doing to continue our legacy.”
Interns at Panasonic, Battle says, are doing anything and everything across the business, from architectural, electrical, mechanical, and software engineering, to marketing, communications, and HR. At the same time, they reap the benefits of developing the soft skills needed in a work environment that can only be learned firsthand. “They bring a lot of great technical skills to the table,” Battle asserts, but having difficult or friendly conversations face to face is also part of the learning curve. She believes that as internships continue to evolve, they become even more valuable as a talent pipeline.
Panasonic had 100 interns across the U.S. this summer alone but declined to say how many have been hired for full-time positions. In the last year, there have been over 50 entry-level new hires in total for Panasonic Corporation of North America who were not former interns.
Leveraging micro-internships
Though conventional internships can be a crucial step to getting a foot in the door, there are still serious bumps and potholes in the college-to-career path that they don’t pave away. Many students commit to 10-week summer internships only to realize a few days in that the industry they’ve chosen is not for them. And by the time they’ve landed that internship, often as a rising senior in college, they are in too deep to change their minds about their related degree.
At the same time, companies continue to pull candidates from the same universities and use dated hiring methods, such as relying on GPA and a student’s major to predict a fit.
Though the NACE report found that the intern-to-employee conversion rate was on the rise this year, it’s still not too impressive at 56.1%. And once newbies make it to first-year-hire status, only about half of them stick around.
The matching process for candidates and companies alike may be fundamentally broken in some cases, but micro-internships may be the fix. Parker Dewey, a network that connects students with companies for the short-term project-based assignments, works to make that match as frictionless as possible. Through the platform, students can take on as many tasks as they want and explore more career options than before. College kids usually complete anywhere between 5 and 20 assignments, starting as early as freshman year.
Parker Dewey doesn’t disclose specific metrics, but it says it’s helped connect thousands of students with hundreds of companies. It doesn’t measure conversion rates of micro-interns who go on to become full-time employees either because the goals for each company and student using the platform vary greatly. While it can be utilized as a recruiting tool, it can also just be a good way for students to experiment or for companies to create brand awareness.
Jefferey Moss, the founder and CEO of Parker Dewey, says that alongside the emergence of the gig economy, micro-internships have allowed for the perfect alignment of interests between companies and college students.
“Companies, for the first time, are willing to let individuals outside of the four walls of their organization execute professional projects,” he says. “Every professional has projects on their plate that are just not the best use of their time. If you could provide that opportunity to a college student, that student can get their foot in the door, explore career options, and earn some money,” Moss explains. “For the company, it becomes a great way of getting work done. More importantly, it’s starting to build relationships with college students who could be a fit down the road.”
But Parker Dewey is invested in more than just forging mutually beneficial working relationships. “We’re trying to ultimately democratize the process around college-to-career,” Moss says, adding that companies are more willing to take a chance on an unconventional candidate when the commitment is lowered to a single project. “By making all of the micro-internships low-risk for students and companies alike, we can actually change the behavior of companies.”
What’s more, the virtual nature of micro-internships eliminates the geographic and economic limitations that have historically left much of the student population untapped and at a disadvantage because of where they live or go to school. “We’re retraining hiring managers,” Moss says. “You don’t need to be a white male from MIT or Berkeley or Stanford to do the role.”
Helping resist the robot revolution
Siemens, a German industrial manufacturing company with branches here in the States, has built an apprenticeship program to prepare junior members of its workforce. The idea of apprenticeships may evoke an image of a medieval sooty blacksmith, but today, they look more like investments in the future. They’re industry-driven cocktails of formal education and hands-on technical experience, and most apprentices come out with a degree as well as a certification, while getting paid to do it. You may have heard presidential candidate Beto O’Rourke advocating for this model recently in his earnest and dulcet tones.
For Siemens, instituting apprenticeships at the company was an answer to a critical need. Back in 2011, it opened a new gas turbine plant in Charlotte, North Carolina, offering up 1,500 open jobs. Siemens received 10,000 applicants, but they still couldn’t fill all the positions with qualified workers because the jobs required know-how with new mechatronics tools. The company looked to its heritage for a solution.
Barbara Humpton, CEO of Siemens USA, says, “We were able to build a German apprenticeship model with American spirit by reaching into the local community, engaging with the local community college, and developing a mechatronics curriculum that would train the workforce we needed. And we’ve kept the program going ever since.”
In the case of Siemens’s Charlotte plant, the company often partners with Central Piedmont Community College so that students can get in-the-classroom and on-the-job training at the same time. Not only do they get paid, but Siemens also makes tuition reimbursement available to its employees.
At the factory, the apprentices are put to work under the guidance of an experienced supervisor to learn how to use the machinery and produce quality products. And when an apprentice is ready to join Siemens as a full-time employee, their average starting salary is $55,000. So far, 31 apprentices have passed through the program and all have become full-time employees on completion.
The company has expanded its program to nine states, and it’s worked with the Department of Labor to put together a playbook for others so that they can implement similar programs in their own environments.
Siemens is spending $50 million a year on training its own workforce, despite national concern that automation might replace factory jobs in coming years.
“What we’re seeing is in fact, technology elevates the role of the human,” Humpton says. “That’s why we are so noisy in getting businesses to understand the return on investment of worker training,” she continues. “If we can invest in our employees and help them take control and ownership of their own careers, there are a myriad of paths to ongoing career success for them.”
She adds that right now, Siemens has 1,500 open positions in the U.S., many of which are jobs that didn’t even exist five years ago. With that rate of change, it makes sense for companies to build sustainable systems that can train new employees as they become necessary, without having to solely rely on the freshest undergrads out of the gate.
“I think we’re going to be building an ecosystem focused on lifelong learning because frankly, the technology is evolving faster than any educational system could keep up with,” Humpton says. “We’re going to need ways to allow people to enter at any stage of their career. We’re waking up to the idea that there are multiple pathways to the American dream.”
Not going anywhere
Internships will continue to be part of that pathway for the foreseeable future, says Glassdoor’s senior economic research analyst Amanda Stansell. Historically low unemployment may be creating fierce competition among companies looking for the best workers, she says, but that won’t last forever.
“As the world of work evolves faster than ever before, even the most in-demand entry-level jobs require a prior internship or experience that demonstrates a candidate has the right skills to jump in and succeed on the job,” says Stansell. Investing in having an internship or other related work experience will put job seekers ahead of the curve when applying for an entry-level role. “Although there isn’t a magic number of internships required, the truth is that most companies expect to see at least one internship listed on a résumé when reviewing a potential young professional candidate,” she says.
If you aren’t able to complete a traditional internship because of time or money constraints, don’t panic, adds Stansell. “Volunteering or other relevant work can also help demonstrate you’ve built the right skills for the job. Just make sure to connect the dots on your résumé.”
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