Qualified interns are a tremendous asset to your company. They bring fresh ideas, they spread the word about your business to their friends and contacts, and often, they turn into solid full-time hires down the road.

But, the question remains: Should you pay your interns?

You don’t want to be perceived as “cheap,” but for many interns, the experience they gain and the professional contacts they make is more than enough. They don’t expect a paycheck in addition to these benefits.

Whether or not to offer your interns paid compensation is not an easy decision. There are moral, legal and ethical considerations involved. Ultimately, you must do whatever is best for your business.

The Law

The legal climate around the use of interns has changed in recent years. Lawsuits have drawn attention to the Fair Labor Standards Act (FLSA), which dictates if and when interns need to be financially compensated for their work.

  • FLSA criteria determines whether someone is a trainee or an employee. The difference between the two is that employees must be paid at least minimum wage – even if you also offer college credit. It all boils down to providing skills and opportunities for your interns, if you can’t or don’t want to pay them.
  • If your intern is contributing to your revenue, then they need to be paid. Anything beyond a generous, educational mentor/mentee relationship requires financial compensation. The only exception is volunteers at nonprofit organizations.

A Paid Intern Is a Happy Intern

Research has shown that paid interns are more likely to convert to full-time hires and to stay with an organization than their uncompensated counterparts.

  • Happy interns are productive. They tend to be more excited to come to work, contribute, and put forth their best efforts. And by paying, you will likely get interns who are more flexible with their time, as they may not have to rush to paying jobs in order to make ends meet.
  • Boost your reputation as an employer. Satisfied interns will spread the word, quickly becoming promising brand ambassadors. They will sell your company and culture to their friends, who may one day be prospective hires.

What If You Can’t Afford It?

You may see the upside to paying interns, but your bottom line remains firm: You simply cannot afford to pay them. Now what?

  • Clearly communicate how they will benefit from their intern experience. Interns have the opportunity to get ahead of the learning curve, even before they enter the workforce. They can make contacts who will stick with them throughout their careers.
  • Make it happen. Interns who are not in it for the money are more likely to be sincerely dedicated and eager to keep learning. Educate them continuously on the skills they will master and the professional network they will establish. Be sure to follow through. Your relationship with your interns needs to be mutually beneficial.

As you make critical staffing decisions – including whether or not to add former interns to your team – consider partnering with the expert recruitment and retention team at PrideStaff Modesto. We’ll develop a staffing strategy that works for you today, tomorrow, and for the future success of your business.

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