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The 5 Biggest Mistakes Companies Make When Hiring Interns (And How to Avoid Them)

Cornerstone Editors

Internship programs are a great asset for organizations. Not only do they give students an opportunity to gain valuable experience in an industry they're interested in, but they also give companies the chance to give potential future employees a low-risk trial run.

Though internships can be mutually beneficial for interns and the organizations that employ them, there's a lot that can go wrong as well. To avoid disappointing all the parties involved and avoiding legal trouble or bad press, companies must comply with federal laws and commit time, effort and personnel to creating a strong internship program.

Here's a look at five of the biggest mistakes organizations can make when it comes to internships and how to avoid them.

Mistake #1: Not Carefully Vetting Interns

Because internships are temporary positions and applicants are often students or recent grads with little experience, it's tempting to not place much weight on the application materials that candidates provide. But even if their resume is short, there are ways to ensure that you're hiring the right person for your organization.

How to Avoid It: When evaluating applicants, make sure they've provided a resume, but pay special attention to the cover letter, advises Rachael Jurek, an internship coordinator for the University of Wisconsin Milwaukee and director of media relations for PR firm Moon Landing, Inc.

"Look at the level of effort that they've placed in their cover letter," Jurek says. Did they research the internship opportunity? Are they knowledgable about your company's vision and mission statements? Did they make an attempt to explain how they'd fit the company culture or contribute to a specific department? If so, it's probably worth giving them an interview.

And pay attention to details as much as you would during an interview with an applicant for a full-time role—take note of whether or not the prospective intern dresses appropriately, brings enough copies of their resume and is knowledgable about your company.

Mistake #2: Not Being Aware of Legal Obligations

Organizations are not required to compensate interns, but they must comply with federal law when it comes to hiring them. Without doing your legal research, you could end up in hot water. "The first thing companies need to figure out is whether or not the people they are hiring are interns or low-level employees under the law," Jurek says. employment law expert Chaya Mandelbaum, Partner at Rudy, Exelrod, Zieff & Lowe, LLP.

How to Avoid It: Fact sheet 71 is a federal test that helps companies determine if an intern is entitled to minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). One question for recruiters to consider is: "Are you looking to provide an educational environment for people who may enter your industry down the road, or are you looking to fill a labor gap?" Mandelbaum explains. "If your answer is the latter, alarm bells should be going off."

If a company uses interns to do work that they would have to hire an employee for, they may be better off hiring "interns" as minimum wage W-2 employees, Mandelbaum recommends. If companies fail to comply with federal law, they could face lawsuits, fines and reputation damage.

Mistake #3: Not Providing Learning Opportunities

Hiring interns to do the work of an employee, or spend the day filing, making copies or getting coffee won't benefit either party. Interns that are forced to do busy work burn out quickly, and don't end up contributing much to your company in the long run. Plus, they'll likely consider other options when they look for permanent employment, and you will have wasted time on a worker you'll never see again.

How to Avoid It: Remember, an internship should be an immersive learning experience, so structure the internship in a way that gives interns access to valuable learning opportunities. Give them specific project to work on, or assign a series of tasks that enables them to learn about your industry while actively contributing to company goals.

Consider how you can show the next generation what it's like to work in your industry—encourage interns to observe, ask questions and strategically offer ideas. "Create an experience that teaches, guides and ultimately ends in resume bullet-points for the student while assisting projects moving forward for the business," advises Jurek .

Mistake #4: Isolating Interns

You might be eyeing that small desk in the corner of the office as a perfect spot to place your intern, but separating your intern from the rest of the team is a bad move that defeats the purpose of the internship. A strong program should expose interns to many different parts of a company, and encourage them to contribute ideas to upcoming projects, participate in daily meetings or go to lunch with staff members.

How to Avoid It: To make the most out of your program, integrate interns into company culture, let them sit in on meetings and allow them to shadow a variety of employees. "Problems happen when the intern shows up, sits in a cubicle away from everyone else, isn't invited to lunch or coffee and doesn't interact with the office," Jurek says. "When people don't feel that they are part of the team, they will perform as such."

Be sure to set clear goals, responsibilities and duties for both interns and their supervisors. Interns should be managed by someone with experience who can critique work and give advice rather than a junior-level employee that may not have much experience either. Managers should act as coaches, helping interns create a plan to complete their assigned tasks, discussing ways they can improve their work and challenging them to go beyond the minimum of what is expected.

Mistake #5: Not Staying Connected With Past Interns

In a busy work environment, it's easy to fall into the habit of letting interns come and go, but you may be missing out on maintaining valuable relationships with individuals that could eventually turn into promising employees.

How to Avoid It: Stay in touch with former interns by sending them company news updates, connecting with them on social media, engaging with school counselors or holding an annual intern reunion. Former interns can make for great future candidates. It can cost up to $5,500 to hire a new employee—rather than going through the expensive process of recruiting brand new candidates, you can draw from a pool of talented people who are already familiar with your company, culture and way of work.

A strong internship program has the potential to benefit both employers and students. By establishing concrete goals, assigning educational tasks and fully immersing interns in company culture, you can create an environment that enables students to learn about your industry while developing a future pipeline of talent.

Photo: Creative Commons

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A New Poseidon Adventure: Flipping Succession Planning Upside Down

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The Hidden Costs of Ignoring Your Talent Management Strategy

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The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance

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The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance

With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.

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