Posted by Ollie ● 8 January 2019
The Ugly Truth Behind Unpaid Internships
Oliver Sidwell, co-founder of RMP Enterprise shares his thoughts on how unpaid internships affect young people's careers...
How did your career start?
For many people, their answer is ‘an internship’. Gaining that invaluable first experience in the world of work allowed them to practice the theory they’d learnt at university and put it into practice in a real working environment.
After various paper-rounds, sports coaching and bar work, my career started with a year-long placement during my third year at Loughborough University as a Channel Marketing Assistant at Robert Bosch in Uxbridge. It was a steep learning-curve and wonderful exposure to a business which was committed to supporting an early talent programme. I was paid £13,000 annual salary and without that income, I wouldn’t have been able to do it.
An unpaid internship can cost an individual £926 a month in London or £804 in Manchester according to The Sutton Trust. If students can’t afford to do that, they simply can’t do the job, regardless of their skills. So, do parents then pay? If so, the employment process then extends the wealth inequality that already exists at university (see graph below).
Put differently, parents are effectively paying their children to work for organisations, who are saving costs and increasing margins. Unpaid internships discriminate against students from lower socio-economic backgrounds, cutting off avenues for them to enter particular industries. It’s not right.
In 2019, Lord Holmes of Richmond is putting forth a legislation to ensure internships over one month are paid minimum wage. We are fully behind him and support what would be a huge step forward for the Government in reducing social disparity.
At RMP, we’re passionate about inspiring young people taking the first step in their career and unfortunately have this paid / unpaid discussion with companies far too often. Below are three excuses we hear as to why unpaid internships are all too common...
"It's all about who you know"
Using friends and family connections to get work experience is a very traditional ‘way in’ for students. The idea of ‘it’s all about who you know’ is antiquated thinking and opposes a meritocratic world which we believe is the future.
"My first job was unpaid"
Ever heard a hiring manager say that? That may have been the case, but the world in the 21st century is different. The Government themselves argue about this more than anyone as a public reform plan to “level the playing field” and ban unpaid internships was remarkably blocked in the House of Commons.
"The government flunked an opportunity to tackle the problem of long-term unpaid internships, which leads to good jobs going to those who can afford to work for free, rather than the brightest and most hard-working."
Ben Lyons, co-director of the Intern Aware campaign
"We have so many applications and students are happy to work for free"
Supply and demand haven’t helped this problem. In 1967 there were only 197,000 students in full time education. This number in 2017 was 2.4 million. With more students at university, demand for traditional internships - during and post-university - is outstripping the supply. The Guardian see this as a growing problem for graduates who get “trapped”.
"Internships commonly represent a first step in the ladder towards a professional career in the most competitive sectors, including fashion, journalism, politics, law, finance and the charity sector. Because these areas are so competitive, employers are often able to offer internships as completely unpaid positions," states this Sutton Trust report.
In isolation, it’s not difficult to understand why these three reasons exist. And that is precisely the problem! On the face of it, organisations aren’t doing anything wrong. The problem is, while unpaid internships remain legal, students from low socio-economic backgrounds will be disadvantaged.
As we’re passionate about change, here are two arguments to help you to show your support for paid internships:
National Minimum Wage
The root of the problem. This article from the Government outlines:
“Students required to do an internship for less than one year as part of a UK-based further or higher education course aren’t entitled to the National Minimum Wage.”
So unless a student has a successful side hustle, is particularly good at poker or sells a kidney, they have to survive on £0 per year!
The National Undergraduate Employability Awards is an event celebrating and showcasing the best employers, universities and students involved in placements, internships and insights. Over the past 10 years of the event, the Top 100 Undergraduate Employers have proven that if you want to attract the best students, they all pay their students between £250-£350 per week.
A story worth sharing is the journey Cancer Research has been on. They have taken nearly 200 students on internships for many years and up until 2018, their roles were unpaid. As a registered charity, many would argue that all the money going through the Cancer Research coffers is best invested in trying to find a cure for cancer, and rightly so - the Government encourage this by making an exemption for ‘voluntary workers’ to qualify for National Minimum Wage.
In March 2018, Cancer Research declared they’ll be paying all their interns going forward. Sir Harpal Kumar, chief executive of Cancer Research, said:
"This is a complex issue, but we felt it was the right time to tackle it. It is not right that those who can’t afford to intern unpaid should be excluded from gaining essential experience”.
What a legend!
Long-time fair internships campaigner Tanya de Grunwald, founder of Graduate Fog, said:
“This is a huge step forward for the charity sector as a whole. True volunteering and junior charity jobs became conflated, with neither being paid. Disentangling them now is not easy – but there is a difference and it’s important to be clear about it.”
Cancer Research’s new stance came after HMRC launched a crackdown on unpaid internships in February 2018, through sending warning letters and offering guidance and reminders of the legislation around National Minimum Wage.
My understanding of the audience gives me most belief that unpaid internships will be a thing of the past. Gen Z - those born post-1995 – are a new breed of student. They’ve grown up with the internet and their access to information has meant they’re far more aware. They are preoccupied with issues such as the environment, single-use plastics, climate change, healthy eating and inequality. They’ve seen the impact standing up for what you believe in has and are inspired by movements, act with their feet and are far more likely to steer clear of any brands that don’t meet with their morals.
One example of this is BrewDog’s Pink IPA International Women's Day campaign which they created new branding to show their support for women and stated they’ll share 20% of the bottle sales to support the fight against gender equality. The good deed was eclipsed, however, by the reception to the 'Beer For Girls' positioning, which however intended, prompted fierce discussions about irony, gender stereotypes and brand communications.
If any generation can come together and stand up for themselves, I wholeheartedly believe it’s Gen Z. They have the skills, the communal voice and opportunity to inspire change.
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From reading thousands of reviews written by students on paid internship programmes each year, both students and employers see such value in the internship process - the average rating across all reviews on RateMyPlacement.co.uk is a buoyant 7.9 / 10.
Research across the Top 150 Undergraduate Employers in 2018/19 also shows 54% of interns are being offered graduate roles off the back of their internships. This demonstrates internships are a wonderful pipeline of talent into businesses; I wonder how many students are missing out on these experiences simply because they can’t afford them?
We’re excited to support Lord Holmes in his suggestion that all internships over one month are paid minimum wage, however we’re conscious that if the campaign doesn’t see the backing it deserves, changing traditional, deep-rooted mindsets will be tough. Please, join us in making a difference to students following our footsteps.
Thank you for reading, if this has inspired you to make change happen within your organisation, please get in touch below - we’d love to hear from you!