The competitive jobs market and economic depression has led to an increasing number of young jobseekers applying for unpaid internships, which has repercussions for the recruitment industry.

Certainly, employers who advertise such vacancies could soon be in breach of the law. With no clear guidance from Government, concerns have been aired in the media about the treatment of interns. In response, on 5 December 2012 Labour MP Hazel Blears presented the Internships (Advertising and Regulation) Bill to Parliament, which seeks to “prohibit the advertising of long-term unpaid internships” and regulate conditions of employment for paid internships. The bill is set for debate in February.


Experience or Exploitation?

So what is the scale of this issue? Regarding employers, the Chartered Institute for Professional Development (CIPD) reported that between 2009 and 2010 the percentage of its members planning to take on interns increased from 13% to 21%. Regarding take-up, a YouGov survey of 2,794 people published in December 2012 showed that the number of workers accepting unpaid internships may have grown tenfold in the last two decades. The survey found that 20% of 18-24-year-olds had done an unpaid internship, compared with 2-3% of those aged over 40.

It’s not hard to see why young people are willing to get unpaid experience. While unemployment fell by 37,000 people to 2.49 million in the three months to the end of November 2012, the number of out-of-work 16 to 25-year-olds increased by 1,000 to 957,000. That’s one in five 16 to 25-year-olds – and of them it is estimated that at least half have been searching for work for six months or more.

The conundrum is that while campaigners argue that unpaid internships exploit young people, jobseekers who can afford to work for nothing see it as a chance to get a foot in the door of their chosen profession.

For this reason, according to the Recruitment & Employment Confederation (REC), many recruitment consultants have been taking a long-term view and advertising unpaid jobs on a pro-bono basis. Arguably, by advertising such roles for free they develop a relationship with a graduate who will be more employable after getting work experience. In some cases, if an employer needs a specialist recruiter they may pay a fee, but the problem for recruiters is that this is a system that can easily work if the jobseeker makes direct contact with the company.

But is bypassing the expertise of recruitment consultants in the interns’ best interests? The REC comments: “Internships offer a route into the labour market for many candidates, however finding an internship should not be based on who you know,” said a spokesperson.

“There needs to be clear differences between shadowing someone on work experience and internships, which should have a proper framework and be fair and transparent to ensure that the interns are not exploited. It is important that interns are given genuine insight into the role they are undertaking and that it equips the person with the skills they need to move forward in their career.”


A truer picture of youth unemployment

Looking at the bigger picture, internships are giving a slightly distorted picture of the jobs market. For instance, because unpaid interns have been unable to claim jobseeker allowance (JSA), they are not included in the official unemployment figures. The ONS says the number of people claiming Jobseeker Allowance last month was 1.56m, down 12,100 from November 2012 and down 40,500 from a year earlier.

Sure, some councils are now agreeing to pay JSA to interns and obviously it can be claimed if they work fewer than 16 hours a week. Few do, however, as they must be prepared to leave the internship if offered a job. With think-tank the Institute for Public Policy Research (IPPR) estimating in 2010 that at least 100,000 young people work as an unpaid intern a year, the true youth unemployment figure could be more than a million.

Pay scales are also being skewed. Recruitment company Inspiring Interns reckons that 65% of internships lead to full-time jobs. But while employers seduce unemployed youths with the possibility of a permanent job at the end of an internship, almost half don’t pay a living wage during it. An IPPR/Internocracy study claims that 280,800 employers planned to use interns in 2011. Of those, 18% admitted they would not pay a wage – and 28% said they would pay less than the National Minimum Wage (NMW), currently £6.19 an hour for over 21s.

That said, those interns who emerge with employable experience are commanding a higher graduate starting salary. A study from Inspiring Interns found that graduates who can afford to take a (usually unpaid) internship secure an average starting salary of £19,400 when they enter full-time work. However, graduates who go directly into a full-time paid role from university start on an average salary of just £17,900. The study quizzed 350 graduates who left UK universities between 2011 and 2012.

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