Most people assume that hiring interns is an easy way to get enthusiastic and driven workers at a deeply discounted rate.
In reality, though, internship programs come with many strings attached. The numerous legal and compliance hoops employers must jump through to hire interns may make it a poor fit for some startups.
But with proper planning and oversight, you can build an internship program that increases your company's productivity and provides students with valuable real-world experience. If you're interested in starting an internship program at your startup, here's what you need to know:
- Four benefits of starting an internship program at your startup
- Three drawbacks of hiring interns for your startup
- When is the best time to hire interns?
- How to hire an intern in five steps
- Three tips to help you recruit and hire interns for your startup
- Reduce your internship program's admin work with Warp
Four benefits of starting an internship program at your startup
Fresh perspectives from a new generation of workers
College students and recent graduates seek internships for real-world industry experience. These opportunities allow them to connect the skills and knowledge gained through their coursework with the day-to-day tasks they can expect to take on in the workplace.
Since these young professionals learn their industry's latest concepts and best practices in their classes, they can combine that knowledge with their unique perspectives and tech savviness to create new approaches that transform how your startup operates.
Increased productivity
More hands on deck means additional help around the office, and the right interns for your organization will be excited to make a difference in the workplace.
They may not be able to develop a new marketing strategy or lead a product launch just yet, but with proper training and mentorship, interns can support your core team in their everyday tasks by the time they complete your internship program. The extra help also means that your team can now take care of any tasks that have been put on the back burner for a while.
Robust talent pipeline
A strong internship program can be a vital piece of the puzzle if you want to improve your recruitment efforts.
Think of internships as a trial period with your startup, where you train and assess young workers who may want to continue working at your company after their internship. Once these workers are onboard as full-time employees, they'll already have a strong sense of your company culture, values, and mission. They'll also be very familiar with how your startup operates, the team members they'll be working with, and their day-to-day responsibilities.
Leadership opportunities for your core team
Creating an internship program also opens up new opportunities for your core team members, especially those who want leadership experience for managerial roles at your company in the future.
The people who oversee your interns will have a chance to serve as mentors as they guide these workers through the training experience. You'll also have an opportunity to observe how these workers perform in a relatively low-stakes management role, so you can see whether they'd be a good fit for something bigger in the future.
Three drawbacks of hiring interns for your startup
Unexpected costs to consider
The truth is that most for-profit businesses can't offer unpaid internships unless they meet specific requirements outlined by the Department of Labor (more on this later). And although some internships are unpaid or offered in exchange for college credit, these "low-cost" opportunities still require as much work and oversight (if not more) than hiring a traditional full-time or part-time employee would.
Employers are responsible for making internships a mutually beneficial relationship. In exchange for affordable labor, companies provide interns with opportunities to learn skills that will further their careers. This can quickly become a time- and resource-intensive initiative for your organization. Even if you hire unpaid interns, your startup may shoulder the costs in other ways.
High turnover
Many internships last several months, with only a few lasting up to a year at most. And because new hires only become productive once they're fully trained on the company's way of doing things, you may not get a return on your investment until several months into your internship program --- at which point most of them will leave your organization.
Short internships can also result in poor or lackluster performance. After all, these temporary employees may not be invested in the long-term success of your startup as a full-time employee would be. So, hiring and training interns may not be worth it if your startup is still finding its feet.
Complex regulations to consider
You should also consider the legal and compliance aspects of your internship program. Recent changes to how companies can conduct internships mean there are many more hoops to jump through to run an internship program legally.
Understanding and staying up to date on these regulations is extra work that your startup may not be able to commit to at this time, especially given the hefty fines and other penalties employers must face if they fail to meet these requirements.
When is the best time to hire interns for your startup?
When deciding whether or not to hire interns for your startup, you must first consider the benefits and costs associated with the initiative.
Do you have the resources needed to train and supervise your interns properly? Are you and your team able to provide them with a meaningful educational experience at this time? Are you willing to do the work to make sure your internship program meets federal and state requirements?
Because of the extended learning curve that comes with hiring and managing an intern (for both your organization and the intern), it's often more worthwhile to prioritize hiring and training full-time employees until you've established your core team. Then, once you're satisfied with how your employees work together --- and perhaps once you feel your junior employees are ready for more leadership opportunities --- an internship program may begin to make more sense for your business.
How to hire an intern in five steps
If you've decided to start an internship program for your startup, follow the steps below (as well as the tips in the next section) to understand how to create a program that benefits you and your new interns --- and avoid any legal or compliance issues along the way.
1. Figure out what you want your internship program to look like
Think through the logistics of your internship program, including details like:
- The length of your internship program
- What departments in your organization might benefit from an intern
- Projects, tasks, and duties interns will be responsible for
- Who will be responsible for overseeing the interns
- Any skills or qualifications candidates should have
- What the screening process will look like
- What training or mentoring you will offer interns
- Compensation and benefits (more on this below)
The more specific your plan is, the better. Prospective interns will be drawn to opportunities where they can learn skills and gain experience that they can apply to their chosen careers. Companies that present a defined plan for training and mentoring interns will be seen as more prepared and less likely to take advantage of them.
2. Decide if you'll hire a paid or unpaid intern
In recent years, internship programs have become more regulated to prevent employers from taking advantage of student labor without offering anything meaningful in return. To avoid lawsuits, companies offering unpaid internships must meet the following criteria, as outlined by the Department of Labor:
- The intern and employer understand that the intern is not entitled to wages for their time or the work performed during the internship
- The internship provides training similar to that given in an educational environment
- The internship is tied to the intern's formal education program through integrated coursework or receipt of academic credit
- The internship accommodates the intern's class schedule and the school's academic calendar
- The employer conducts the internship for the benefit of the intern
- The intern works under the supervision of the company's staff and doesn't displace regular employees
- The intern isn't entitled to a job after the internship is over
Because of these strict guidelines, paying interns is generally the best course of action for most employers, even if it results in more legwork for your organization. Treating interns as employees protects you and the intern from misunderstandings that could result in legal action or reputational damage to your company.
3. Find candidates for your internship program
Since internships are primarily sought out by college students and recent graduates, one of the best places to find great candidates for your internship program is your local college or university.
Contact college career centers to let them know you're interested in hiring students for internship opportunities. If you plan on offering internships in exchange for college credit, be sure to ask them about any guidelines or requirements they have for their internship partnerships. Once you meet their requirements, they can promote the opportunity on the school's job boards or connect you directly with students who might be a good fit.
Other great places to promote your internship program are job search websites, including LinkedIn, AngelList, Work at a Startup, and Indeed. You can also seek out websites that cater specifically to opportunities for college students and young professionals, such as Handshake and WayUp.
4. Review resumes and interview top candidates
The interview process for interns follows many of the same guidelines and best practices as hiring employees.
Although interns may only be with your company for a short while, you still want to choose people who are a good fit for the organization and have the skills or knowledge needed to succeed in their roles. So, seek out candidates who are eager to learn, interested in your company, and pursuing a career in a related field or industry.
You should also determine what your interview process will look like so you can assess each candidate fairly. A typical interview process for prospective interns might look something like this:
- Formal application
- Initial phone call or video chat
- One or two other interviews with their future team members to assess their skills and cultural fit
5. Hire and train your intern
Once you've offered an internship position to your top candidates, finalize the offer with an internship agreement. This contract should include information on:
- Duration of the internship
- Projects and duties the intern will be tasked with
- Any specific outcomes or goals they'll work toward
- Compensation or payment terms, if applicable
If the intern will have access to sensitive information during the course of their work, you may ask them to sign a non-disclosure agreement as well. Have your attorney review both contracts before sending them to prospective interns to ensure your startup is adequately protected.
You should also develop onboarding, orientation, and training processes to get interns up to speed on your company culture and operations. This will help familiarize them with their team members, daily duties, and the business tools they'll be using during their internship.
Three tips to help you recruit and hire interns for your startup
Make sure your program offers meaningful benefits for your interns
Students seek out internships with the expectation that they'll learn real-world skills they can't gain in an academic setting. This is especially the case if you plan on offering unpaid internships, as these young professionals don't receive any other kind of compensation for their time.
So, take extra care that your internship program offers meaningful benefits to your interns --- not just your organization. Assign interns with duties that help them get closer to their career goals and projects with a real impact on your organization. If they're interested in content marketing, for instance, don't ask them to start a new blog for your startup. Instead, think smaller --- like teaching them how to write and optimize a blog post for search engines.
This is where smaller companies can shine, especially compared to their larger counterparts. Because of their size, startups can often better respond to their interns' unique needs and skill sets. They have the flexibility to build programs that are tailored to their interns' goals instead of sticking to a set course of action.
Keep legal and compliance considerations in mind
In addition to the laws surrounding paid and unpaid internships, employers must consider other legal and compliance matters when hiring interns.
For example, companies that pay their interns must abide by tax laws. Paid interns must be paid at least the minimum wage in most states and overtime pay anytime they work more than 40 hours in a work week. Depending on how many hours interns work each week, you may be required to offer them health insurance and other employee benefits during the length of the internship.
So, once you decide what kind of internship you want to offer, take time to educate yourself on the rules and regulations that your startup must comply with.
Schedule regular meetings with your interns
You should also have a method for evaluating your interns' productivity and work performance. If they're working for academic credit, this may be a requirement from their college or university.
Meet regularly with your interns to assess their progress on their assigned projects and tasks. Ask them what they've learned so far and what they think about your workplace. During these meetings, consider asking them for their input on your internship program and any areas needing improvement.
This effort not only shows that you care about their training and development, but it can also help you discover new ways to make your program even more valuable for your organization and for future interns.
Reduce your internship program's admin work with Warp
Because interns typically stay with a company for several months at most, hiring and onboarding these workers throughout the year can throw your back-end operations into chaos without an organized system in place.
But with payroll software like Warp, this becomes one less thing for you to worry about.
Easily add interns to your payroll and set them up with benefits in mere minutes. Once they're added to your payroll system, we'll handle it from there. Our full-service platform automatically manages your payroll taxes, withholdings, tax filings, and benefit deductions without any oversight needed.
Find out if Warp is a good fit for your startup by requesting a demo today.
