Taking on interns: What you need to know

We take a look at the value internships can offer your small business and your contractual obligations as an employer

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Internships have received a lot of publicity lately, and not all of it has been good. There have been reports of graduates being exploited by employers using a rolling programme of unpaid placements, as an alternative to taking on a salaried employee with a formal probation period.

There have also been reports of internships at top city firms being ‘auctioned off’ to the highest bidder and of young people being expected to work long hours without even their food and travel expenses being covered.

The lines between unpaid work experience and paid work placements have become increasingly blurred, and the government is under pressure to take action against unscrupulous employers who flout the rules to their advantage.

Read more: how to run an employee induction 

Should you consider offering internships at your start-up?

Managed well, an internship is a win-win situation, and it can certainly be a viable recruitment option for a small business. The business gets an extra pair of hands to fulfil a short-term resourcing need or to take on a particular project that keeps getting put on the back burner because no one has time to do it in addition to their ‘day job’.

It’s also a great way for a small business to get new ideas, gain a fresh perspective and to bring in skills it currently doesn’t have – knowledge of how to exploit some of the latest technology, for example. An internship can also help a business identify possible future candidates who can help grow the company and eventually take on a permanent role.

In return, the graduate gets some solid work experience to put on their CV, as well as the chance to develop knowledge of their chosen profession and to make some valuable contacts in their sector. They also get the opportunity to improve their future employability by developing their skills in key areas such as commercial awareness, communication and customer service.

How internships work

An internship is typically a work placement that lasts between three and 12 months, depending on the circumstances of the individual and the business. It’s an opportunity that is most commonly sought after by graduates who have finished their university or college course and are looking for some experience that will help give them a leg up into their chosen profession.

There is an ongoing debate around the issue of whether interns should be paid, and it is a bit of a grey area. It’s perfectly legal to employ an intern without paying them – although in practice, most organisations do provide some level of compensation.

You wouldn’t expect to pay an intern the same salary as a full- time, experienced employee. They are, after all, new to the world of work and will need help and support to develop their skills. But they do add value to the workforce and can quite quickly become productive employees – and there is a growing body of opinion that they should be paid at least a ‘training wage’ in the same way as an apprentice.

It’s also common for interns to be reimbursed for their travel and subsistence expenses.

Some organisations, however, class their interns as volunteers with no kind of contract or formal arrangement, in which case the NMW rules don’t apply. Ethics aside, there is of course also an argument to say that an intern who is being paid will feel much more valued by the business and is more likely to approach their placement with energy and enthusiasm.

Don’t forget that if you are paying an intern, you will need to add them to your payroll system so that they receive their salary and expenses at the end of each month in the usual way.

Even though an internship is not a formal contractual arrangement, you still have the same duty of care towards an intern as any other member of staff, and you should treat them with respect and consideration and ensure their health and safety.

Some businesses do issue voluntary internship agreements – a great way to demonstrate your commitment to providing a professionally managed placement and to make sure both parties’ expectations are clear from the outset.

Tip: Follow the CIPD’s advice to help you decide whether your intern should be paid – “If an intern is contributing to your company, has a list of duties and is working set hours then technically they should be paid the National Minimum Wage.”

The CIPD provides a sample internship agreement (below), although you can draw up your own.

Internship agreement

To be read carefully and signed by the intern and the employer (please make two copies).

The Employer’s Responsibilities

As the employer, I am aware that interns provide a useful service for our company. I confirm that I will abide by the principles outlined in the CIPD Employer’s Guide to Internships  (a copy of which will be given to the intern) and it is therefore my responsibility to ensure that the intern will be:

  • treated with respect at all times
  • supported and trained appropriately for the tasks that they are asked to complete
  • given as much access to learning and development opportunities as possible.

The Intern’s Responsibilities

As an intern, I appreciate the opportunity that has been provided for me through this internship and understand that it offers the chance to gain experience and display professional development. Therefore I confirm that my responsibilities are to:

  • behave in a professional manner at all times
  • abide by the rules and regulations of this company
  • work hard and diligently throughout the internship
  • complete the projects and assignments given to me in a timely and accurate manner.


Print name:




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Courtesy of CIPD

Finding an intern

You can recruit an intern in the same way you would recruit for any other vacancy – by placing an advertisement to invite applications, shortlisting candidates and conducting interviews.

There is also a web-based matching system, called GraduateTalent Pool, that can help you to find the right person (http://graduatetalentpool.bis.gov.uk).

You simply register on the website and fill in an online form with details of your vacancy, including a description of the role, the type of candidate you’re looking for, the length of the internship and whether it is paid or unpaid.

To help screen candidates beforehand, you can also set up a list of 10 key questions applicants must answer correctly before they can get access to details of your opportunity.

Graduates who have registered on the website are able to search for suitable vacancies and can also sign up for email alerts which let them know when a relevant new opportunity is added.

Interested candidates contact you directly via whichever method you have specified (phone, email, CV, etc.), and once you’ve received an application you just handle the interviewing and recruitment process in the usual way.

Taking on Staff, published by Crimson Publishing, is available to buy now.

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