Internships are arrangements in which tertiary institutions students lend their talents to companies in return for an opportunity to develop business skills and gain exposure to the work environment. Many internship programs do not compensate interns financially – though some companies make exceptions to this general rule, either voluntarily or to meet state guidelines – but such positions are nonetheless often quite beneficial to the students who participate, for they receive “real world” business experience and an opportunity to impress potential employers.  


Internships are seen by students as potentially valuable tools to explore general career avenues as well as specific companies. Such arrangements can provide them with valuable work experience (both practical and for resume enhancement) and an opportunity to line up a job before graduation. In addition to securing good work experience, students also may be able to gain academic credit and financial compensation (albeit modest in size) for internships.

Internship programs are also potentially valuable to employers. Unfortunately, some companies continue to regard interns as little more than a free source of labor to catch up on filling other tedious office tasks. But many business owners and managers realize that internship programs can provide them with an early opportunity to gauge the talents of a new generation of workers and, in many cases, sell themselves as a quality place for students to begin their careers after they graduate.

Internship programs are understandably most prevalent in larger companies. But small companies can realize significant benefits as well. In many respects, interns can be ideal workers for small and mid-sized companies. They are typically hungry to gain experience, willing to perform less-desirable tasks, and eager to perform well. Moreover, their fresh perspectives often challenge entrenched processes and attitudes that have outlived their usefulness. 

In addition, internship programs enable businesses to sort through a pool of potential employees. As weeks pass, intern performances can be evaluated, and the pool can be culled down to good workers who are already familiar with the company. The organization has the opportunity to observe the student at work and review work habits, technical ability, interpersonal skills, and adaptability before making a full-time commitment.

Internships substantially reduce the risks in cases where offers of permanent employment might be made. Not only can the organization pre-screen the intern; the student also can learn about the company. The possibility of dissatisfied employees seems far less likely when both employers and employees have clear expectations of each other.

Interns also often prove to be invaluable recruiting tools when they return to campus. A student returning from an internship with a favorable impression becomes an on-campus advertisement. Students listen to their peers and often trust their opinions more than those of campus representatives or professors. The cost of recruiting permanent employees is reduced as students become familiar with the opportunities the organization has to offer and top students are attracted to permanent positions.

Distinguishing Interns from Employees

Internship programs can be tremendously helpful to small businesses, but there are legal hazards associated with such programs of which employers should be aware. Unless your internship program is essentially educational, your interns may look suspicious like employees, who are entitled to the federal minimum wage. 

There are six criteria for distinguishing Interns from Employees

  1. Interns may be trained using equipment and procedures specific to the employer, but internship experiences must be akin to experiences that would be able to gain in a vocational school.
  2. Regular employees cannot be displaced by interns, who should be closely supervised.
  3. Interns are not guaranteed jobs at the completion of their internship. If they are, the experience looks more like the training period at the start of a new job, for which they will be entitled to fair wages.
  4. Both employer and intern need to understand that training time does not entitle interns to wages,
  5. Training should be primarily for the benefit of the intern.
  6. Companies providing training to interns must derive no immediate advantage from the activities of the intern. Although an internship program will benefit your business over the long-term by providing a pool of trained applicants with familiar work habits, it’s not meant to be a source of free labor.

Most business consultants offer soothing advice to small companies that might be scared off by such criteria. They point out that the overwhelming majority of firms that establish internship programs are pleased with them. Business owners and managers also need to know that, generally speaking, even unpaid interns have the same legal rights as employees when it comes to protection against discrimination or harassment.

It is best to cover them for workers’ compensation too because if they are injured on the job and not covered, they can sue your business for medical expenses and possibly for negligence, which can subject your business to unlimited damages. However, interns do not have the same rights as employees in the realms of unemployment compensation or termination procedures.

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Bernard Taiwo

I am Management strategist, Editor and Publisher.

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