Research funded by the NACE Center for Career Development and Talent Acquisition

NACE Journal, May 2017

Research supporting the positive role that experiential learning plays in the career outcomes of college graduates has prompted institutions to consider the internship as an important curricular option. Despite the controversy over the value of paid versus unpaid internships, recent studies have indicated that students graduating with internship experiences, in general, are more likely than students without those experiences to find employment upon graduation (Callanan & Benzing, 2004; D’Abate, 2010; Gault, Redington & Schlager, 2000; Knouse, Tanner, & Harris, 1999; Knouse & Fontenot, 2008). Adding to the research, Look Sharp’s 2016 State of Millennial Hiring Report indicates that graduates who complete three or more internships are more likely to secure full-time employment, with 81.1 percent of graduates reporting that the internships helped them shift their career directions either significantly (34.8 percent) or slightly (46.3 percent) by changing the focus of classes or majors. Further, Knouse & Fontenot (2008) found that, in addition to having employment opportunities evolve directly from their internship sites upon graduation, interns have enhanced employability after successfully completing their internships even prior to graduation.

In the ASHE-ERIC Higher Education Report, Jones (2002) emphasized that internships provide advantages to graduates in the job market and urged institutions of higher education to transform their curricular offerings to include structured experiential learning. Other researchers have cited the value of internships for employers as recruiting tools (Coco, 2000; Gault et al., 2000; Hurst & Good, 2010). Employers responding to the National Association of Colleges and Employers’ (NACE) 2016 Internship and Co-op Survey indicated that their primary goal is converting graduates who have participated in internship or co-op programs into full-time employees. Similarly, the Gallup-Purdue Index, a 2014 inaugural study of the lives of 30,000 college graduates, supported the positive relationship between experiential learning and career outcomes. Lead senior researcher in the Gallup study John H. Pryor (Gallup, 2014) commented on the importance of preparing “all students for that great job” by “making internships and partnerships with faculty and industry and organizations available to all students.”

Research into the comprehensive internship program at Endicott College, the focus of this study, provided results consistent with the broader research explorations of the internship as a high-impact practice (Jones, 2002; Kuh, 2008; Miller et.al, 2011; Simons, et al., 2012) and as a means for enhancing students’ understanding of the types of positions that are in line with their career goals. Data derived from the Endicott College Career Center Graduate Report for the Class of 2015 have shown that graduates across all majors achieve consistently positive career outcomes as a result of their internship experiences. As an example, using the recommended NACE criteria (full- and part-time employment, post-graduate education, self-employment, and military service), the career outcomes rate for the Endicott graduating Class of 2015 was 98 percent. Fifty-three percent of the graduates reported securing their positions within the first year after graduation from former internship sites or internship site contacts, and 90 percent reported working within their respective fields of study. In addition, graduates indicated that their internship had either a “high” or “positive” impact on their successes in their first year of employment (Endicott College Career Center Graduate Report Summary, 2015).

Internship as Part of Curriculum

The internship program at Endicott College has been an integral part of the curriculum since the college’s founding in 1939. Graduates leave Endicott with both a diploma and a robust resume as a result of strategic programming integrating academic coursework and professional application. All students are required to undertake three credit-bearing internships over the course of four years: two 120-hour internships during the January or summer break of the freshman and sophomore years and a full-semester internship during the fall of the senior year. Each student is assigned an internship coordinator who is based in an academic department and who is responsible for guiding the student through the internship search process as well as monitoring the intern’s progress at the site. As early as the freshman year, students participate in classes to develop their professional competencies, from creating resumes to practicing interviewing techniques. Essential to the success of the internship program are the partnerships that are developed with employers through collaborations with Endicott’s Internship and Career Center.

Focus of the Study

Both the longevity and comprehensive structure of Endicott’s internship program has enabled the college to collect quantitative and qualitative survey data related to student and employer views of the program and the career outcomes of students within one year after graduation. In light of the debate ensuing over the impact of unpaid internships on career outcomes, Endicott College viewed the NACE Center call for research proposals as an opportunity to expand our research efforts beyond the experiences of recent graduates and consider the long-term impact of internships on the career outcomes of Endicott alumni employed for five years after graduation. In addition, our goal was to explore more fully the views of employers relative to the unpaid internship and its impact on a candidate’s employability. This article presents a summary of our findings.

The study focused on recent graduates who completed their degrees in May of 2015 and on alumni from the Class of 2010 to determine the immediate and long-term impact of the internship experience on career outcomes. Also included in the study were employers who have supervised Endicott students undertaking full-semester internships to explore the employers’ perceptions of the unpaid internship on a candidate’s employability. The research questions guiding the study were as follows:

• Do (full-time) unpaid internships result in employment and/or the pursuit of post­graduate education within the first year?
• What is the relationship between (full-time) unpaid internship experiences and career outcomes (advancement in positions and/or salary) five years after graduation?
• What perception do employers have of the value of unpaid internship experiences on a candidate’s employability?

A mixed-method approach was implemented, using both qualitative and quantitative measures. First, data were collected through an annual survey administered to all 555 graduates from the Class of 2015 six months after graduation. A new question was added to the Class of 2015 survey to determine if the internship was paid or unpaid. The knowledge rate for the survey was 83 percent, which represented an 11 percent increase over the previous year.

The 2010 alumni survey was administered through a collaborative effort between the Endicott College Office of Alumni Relations and the Internship and Career Center. The entire undergraduate alumni population of 385 graduates from the Class of 2010 was recruited to participate in the study. A survey instrument was developed following the examination of available literature on this topic and distributed to all contacts that were available to the researchers. Since it is more difficult to reach alumni five years out than immediately post-graduation, two different modes of survey distribution were used (e-mail and social media). The most recent e-mail addresses, which were provided by the respondents themselves, were acquired from the Endicott College Office of Alumni Relations. A total of 106 completed surveys were received with a response rate tabulated at 36 percent.

Concurrently, the Endicott College Research Center distributed surveys to all 1,680 internship supervisors who had hosted at least one full-semester intern between 2011 and 2016. There were 327 supervisors who completed the survey—a response rate of 19.4 percent. The survey instrument consisted of a mix of quantitative and qualitative questions. The last question asked if respondents would be interested in participating in a focus group for further topic exploration. During the final part of the study, focus groups were conducted with a random selection of participants who had self-selected to participate.

The majority of the data collected for this study was quantitative. However, both the use of open-ended questions in the 2010 alumni survey and the employer survey further informed the survey results and helped guide the questions that were asked in the focus groups. A strength of this study was the use of participants who had direct knowledge of the experiences that we were investigating. Since all Endicott College seniors complete full-semester internships, our alumni and full-semester internship supervisors are in a unique position to contribute knowledge to this topic area. A limitation of the study was that the self-selected nature of participants may not be completely representative of the entire Endicott alumni population. In addition, although all 2010 alumni were targeted, the highest rate of response was from sports management (12 percent), communication (11 percent), interior design (9 percent), hospitality (8.5 percent), and criminal justice (7 percent) majors, leaving a few majors underrepresented.

Findings

The first research question asked if full-time unpaid internships resulted in employment and/or the pursuit of post-graduate education within the first year. Since a full semester internship is an academic requirement for all seniors, without the expectation of compensation by the employer, recent graduates were not asked if their internships were paid in past years. However, for the purposes of this study, a question on internship compensation was included. The responses were as follows: 20 percent paid; 9 percent unpaid, but with other compensation provided (such as parking and transportation stipend); and 71 percent unpaid.

Outcomes and Satisfaction

Career outcomes data indicated that 98 percent of 2015 graduates were employed full or part time, self-employed, enrolled in graduate programs, or enlisted in the military. Ninety percent of the graduates indicated that their employment was directly related to their fields of study, and 53 percent reported that they obtained their current positions directly from their internships or internship contacts. This provided useful information about the status of our recent alumni but did not provide any specific data about the relationship between paid versus unpaid full-time internship experiences and career outcomes.

The 2010 alumni survey was designed to delve further into this topic. Similar to 2015 graduates, the majority of the 2010 alumni had an unpaid internship experience (70 percent). Twenty percent of the respondents reported that they had a paid internship while 9 percent reported being unpaid, but receiving other compensation. Of the respondents who reported having paid internships, 62 percent received an hourly wage, 5 percent had a salary, and 33 percent received a stipend.

Approximately 57 percent of 2010 alumni reported satisfaction with their progress toward meeting their salary goals (strongly agree = 1, strongly disagree = 5). The majority (92 percent) also “strongly agree” or “somewhat agree” that they are satisfied with the success they have achieved to date in their careers.

Five Years Out: Salary, Satisfaction Unaffected

A chi-square test for independence indicated no significant association between paid/unpaid internships and current annual salary. In other words, there was no significant difference between having a paid versus an unpaid internship experience and salary level five years after graduation. Hence, it appears that graduates who complete full-time unpaid internships are just as likely to advance in their salary levels five years after graduation as graduates who are compensated.

A one-way between-groups analysis of variance was conducted to explore the impact of paid/unpaid internship status on levels of satisfaction in meeting salary goals. Participants were divided into three groups (Group 1: Paid internship; Group 2: Unpaid internship with some compensation; Group 3: Unpaid internship). There was no statistically significant difference found at the p<.05 level in level of satisfaction for the three groups.
An independent samples t-test was conducted to compare the career satisfaction scores for alumni who had paid versus unpaid internships. Respondents were asked to rate their level of agreement with the following statement: “I am satisfied with the progress I have made toward meeting my goals for advancement in my position” (strongly agree = 1, strongly disagree = 5). The findings indicated that there was no difference in the degree of satisfaction with career advancement based on whether a participant had a paid versus an unpaid internship. In summary, our findings indicate that graduates who have completed (full-time) unpaid internships are just as likely to advance in their positions and/or salary levels five years after graduation as graduates who have completed (full-time) paid internships.

Employer Perceptions: Unpaid Internships and Employability

Our third research question delved into the perception of employers on the value of unpaid internship experience on a candidate’s employability. Of the 327 respondents, the highest percentage of employers who responded to our survey were from the business industry (15 percent), followed by employers from the communication field (12 percent) and employers from sports management (12 percent). Approximately, 10 percent of the employers surveyed self-identified as being in the field of psychology, 9 percent from interior design, and 8 percent from hospitality management. The majority (60 percent) of respondents were employed in the for-profit sector while 32 percent were from the nonprofit sector and 8 percent were from government. The majority (82 percent) worked in organizations with fewer than 500 employees. Nine percent worked in organizations with 500 to 1,000 employees, 3 percent in organizations with 1,000 to 2,500 employees, and 4 percent in organizations with 2,500 to 5,000 employees; the remaining 2 percent were in organizations with more than 5,000 employees.

Sixty-eight percent of respondents had accepted one to five Endicott interns at their site within the most recent fiscal year. Fifty-five percent of respondents reported hosting at least one Endicott full-semester intern over the past five years. Twenty-five percent reported offering paid internships while 51 percent offered only unpaid internships. Twenty-four percent offered both paid and unpaid internships at their respective sites. When asked what influenced their decisions to make an internship paid or unpaid at their sites, the majority (59 percent) reported that the decision was based on the available budget. Other factors that were indicated by employers were the student’s advanced skills/experience in the field (22 percent) and the need to recruit for the talent pipeline (13 percent).

The employers that responded that they offered paid internships at their respective organizations were also asked what form of compensation was provided to those interns. The majority (73 percent) reported providing an hourly wage to interns. Eighteen percent of those employers provided a stipend/reimbursement, approximately 3 percent provided a salary, and 6 percent provided some other form of compensation, such as a per diem or a commission opportunity.

Employers were also asked several open-ended questions on the survey. When asked if they had observed a difference in performance between candidates who had previously completed unpaid internships versus those with paid internships, the majority answered that they either had not noticed a difference or did not offer paid internships at their sites.

Some of the respondents did indicate that they saw an advantage in paid internships as expressed in the following statement:

It [has] been a mixed bag. We used to offer primarily unpaid internships. We placed much greater emphasis on the learning experience for the interns since that was the sole compensation. I would say we focus less on the “teaching” aspect in paid internships. The value for the interns is more likely found in the application of skills and learning as they go. From an employee perspective, I think paid interns perform better; however, if I were an unpaid intern, I believe I’d have more freedom to learn and experiment with less on the line financially.

In contrast, other employers reported that they found that unpaid interns performed better than paid interns at their respective sites. One employer stated:

I have found that unpaid interns are actually more eager to learn and get involved with the team and members of the club. We have only ever taken one paid intern and wouldn’t do it again as you don’t get the same response from them. Unpaid interns put the effort in and are eager to learn, whereas paid interns are more enjoying time away.

Many employers emphasized that, in general, the academic credit provided for an internship created an advantage over paid internships. One employer stated the following:

In my experience, students who are earning school credit have been more accountable than students just receiving monetary compensation. They seem to care more about their level of performance and the future impact it could have on their GPA for grad school or future internships.

Focus groups were also conducted with employers who host full-time semester-long interns. The consensus among focus group participants was that it did not matter whether potential job candidates had undertaken paid versus unpaid internships. Instead, what mattered most was how the individuals performed at their internship sites. An additional consensus of focus group participants was that interns who had unpaid internships were actually at an advantage because “A job that is unpaid would let me know that the candidate has gone above and beyond. Likely shows a passion—willing to work without pay. Not just going through the motions and getting a paycheck.”

Overall, both the results of the employer survey and focus groups indicate that the majority of employers perceive unpaid internships as adding value to a candidate’s employability. The results also demonstrate that employers highly value job candidates with unpaid internship experiences and that the duration and structure of an internship (i.e., full-semester internship with academic credit), whether paid or unpaid, is highly beneficial for college graduates in terms of their employability and career advancement.

Conclusions

The Endicott College study made several important contributions to the existing body of literature on unpaid internships and career outcomes. We believe that using a sample of alumni five years after graduation improved upon many existing studies that collect cross-sectional data immediately from the post-internship experience or within the first year post-graduation. Furthermore, the use of an employer survey and employer focus group expanded the scope of the study and provided more concrete information about the value of an unpaid internship from an employer perspective. By surveying all supervisors who host full-semester interns from Endicott College, we were able to obtain the perspectives of employers across all majors. This multi-disciplinary aspect of the study is another important contribution to the existing literature as many past studies have focused solely on one academic discipline.

The analysis of data gathered from the internship program at Endicott College supports all three hypotheses proposed as the basis for this study on the value of unpaid internships and their impact on career outcomes. Findings indicate that graduates who have completed full-time, unpaid internships are just as likely to be employed or pursuing post-graduate education within one year following graduation as those who have completed full-time paid internships. Similarly, graduates who have completed full-time unpaid internships and have subsequently been employed for five years are just as likely to advance in their positions and/or salary levels as those who completed full-time paid internships. Finally, in the hiring process, the majority of employers did not favor candidates who had completed paid internships over those who had held unpaid internship positions. The factors most likely to influence hiring decisions, as cited by the majority of employers surveyed, related to the duration of the internship experience, the structure of the experiential learning program, and most importantly, the quality of the intern’s performance at the site.

While limited to Endicott’s internship program and graduates, the study supports the broader and more extensive research findings related to the value of the internship experience with or without monetary compensation. For example, a study completed in 2015 by Hart Research Associates in conjunction with the American Association of Colleges and Universities found that 73 percent of the employer respondents believe that requiring college students to complete a significant applied learning project before graduation would improve the quality of their preparation for careers; 60 percent of those surveyed indicated that they would be more likely to consider a candidate for full-time employment if he/she had completed an internship. Future research that includes a broader population of respondents within the higher education community is needed to expand the Endicott study and to provide a longitudinal analysis of findings related to career outcomes across institutions.

Because Endicott has a uniquely structured academic internship model, this research project allowed for the opportunity to evaluate the program in relation to job opportunities and career satisfaction based on an excellent response rate for recent graduates (83 percent) and a good response rate  for alumni employed for five years (36 percent). However, in the future, additional research projects such as this one are needed at other institutions of higher education to replicate the findings this study has produced. Specifically, instead of focusing on paid versus unpaid internship opportunities, more studies are needed to examine the impact of structured, credit-bearing internship experiences on career outcomes in order to create robust programs that fully prepare graduates to fulfill their career goals.

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Note: Forthcoming Study on Early Career Outcomes

This article provides highlights from a forthcoming study conducted by Saltikoff, Eric Hall, Alifeya Albers, and Laura Rossi-Le, all of Endicott College, through the NACE Center for Career Development and Talent Acquisition.

The study joins three other NACE Center research projects that are focused on internships: Understanding the Impact of Unpaid Internships on College Student Career Development and Employment Outcomes, published in December 2016; a forthcoming study from researchers at Mt. Holyoke—highlights of which appear in the May 2017 issue NACE Journal; and a study exploring the outcomes associated with internships across multiple institutions (to be published by the end of 2017).