Recently, one of our hedge fund clients was hiring an entry-level analyst. In thinking about what they wanted in a candidate, he stated that he “would rather hire someone who painted houses all summer to make money than someone who had a cushy internship secured by connections.” This statement led me to think about what the internship has become and when it is a valuable learning experience or merely another way to leverage connections and pad the resume. There are important thought processes that both candidates and employers should keep in mind as they think about what internships should accomplish that can help make this a more valuable experience for both parties. I would like to address measures that both audiences can take to do so.
There are three types of recruitment processes for obtaining internships.
1) On-Campus Recruiting for For-Profit Companies: First, there are the structured internships in which for-profit companies recruit college juniors into summer programs as a way to identify long-term talent for their analyst rotations. Typically an institutionalized process, they are commonly carried out on campus and through formal interview rounds. Candidates are recruited based on skills, GPAs, and academic honors. These internships typically come with some kind of salary or stipend.
2) On-Campus Recruiting for Non-Profit Companies: The second internship type involves non-profits, NGOs, or government organizations and has a similar recruiting structure and level of competition as its for-profit counterpart, although it is oftentimes less financially rewarding in terms of salary or stipend. Both of these internships are very prestigious and can add valuable skills to your resume.
3) Under the Radar Opportunities: The third internship type is the under the radar opportunity in which connections become important in order to uncover and land the job. These experiences can be hit or miss, both in developing skills and in padding your resume. Which internship type to pursue really depends on what you are looking to achieve.
Once candidates have undertaken the hard work and time commitment required to ace the internship interview process, there are a number of factors to take into account in order to determine whether that internship is going to be a valuable and worthwhile experience. The first one is whether they can afford to live off of whatever level of financial compensation the internship offers. The second one is to think about what the day-to-day tasks will involve and if they will be building meaningful skills. The final factor to consider is whether the skills and professional contacts that the role offers will help build toward the student’s academic and career goals.
Unfortunately unpaid internships favor students in economically privileged positions. For students coming from less wealthy households and already buried under mountains of financial aid, the prospect of spending valuable time working for free at an unpaid internship is a luxury they cannot afford. For students in less-privileged economic positions, it’s important to seek out opportunities that may be able to offset any financial needs, such as finding internships where one might be able to get credits toward a degree or applying for a university-sponsored fellowship that will offset unpaid internships at both non-profit and for-profit firms.
Internships also provide students with the important opportunity to gain real-world insight into the day-to-day of a given career without having to take on a serious commitment to that track. I’ve met many young professionals who have had an internship in a specific industry, like finance, only to quickly determine that it is not where they want to be long term. This experience is actually a great one , not only students learn valuable “real-world” skills, but also because they have the chance to determine what they want to do or, sometimes more importantly, what they don’t want to do.
I remember interning as a college sophomore with a financial firm and really thriving. I learned that I loved working in New York and, while the financial industry was where I wanted to focus my career, it was not going to be in research or trading but more likely in a people-driven area. That experience helped me find a career in Executive Recruiting focusing on the financial industry. I know I got my first executive search job out of school because of that internship. Career choices are obviously big decisions that have real economic consequences, and it’s important for students to take advantage of any opportunity that lets them try out different career paths while the opportunity cost to switch gears is relatively low.
I was also able to thrive in my career not only because of my internship experience but also because of the work ethic I developed from doing less glamorous jobs other than interning–like waitressing and bartending throughout college. Both gave me practical experience. This brings me back to my original question: what types of internships and/or student work experiences are most important in building long-term skills?
According to a 2012 survey by Millennial Branding, 91% of participating employers said that students should have at least one to two internships before graduating in order to be considered competitive candidates. But I wonder, what is it about these internships that employers find to be so indicative of future employee success? When I talk to candidates about their internship experiences, they are sometimes full of mundane tasks and the proverbial “coffee runs” that we all remember. Outside of the highly structured and mentor-driven investment banking internship programs, I find that a lot internship programs (and especially those that are unpaid) offer students little more than glorified clerical experience.
I would argue that we, as employers, need to rethink what internships mean and what they are meant to achieve, for both the student and the employer. Is it merely a resume-padding exercise, where the presence of a brand-name firm on a resume matters more than the substantive experience? Or should we look at internships as opportunities for a candidate to learn the very skills that will make them successful full-time employees, such as accountability, time management, work ethic, and teamwork? By reframing how firms approach the internship experience and where candidates can gain that type of experience, perhaps we can challenge the underlying structures that allow less effective internships to proliferate.
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