Developing and Implementing Internship Programs

Internship programs are a vital way to foster innovation and develop talent within the workplace. They provide businesses with an opportunity to identify and cultivate the next generation of leaders while bringing fresh perspectives to the table.

For organizations, internships are not just about filling temporary roles; they are about creating pipelines of skilled, motivated individuals who can contribute to long-term growth. Interns, in turn, gain invaluable hands-on experience, build professional networks, and develop practical skills that bridge the gap between education and industry demands.

However, the U.S. Department of Labor (DOL) has strict regulations regarding paid versus unpaid internships, so employers must develop and implement their programs carefully to maintain compliance.

How to Build an Effective Internship Program

An effective internship program can be a game changer for any organization, providing talented individuals with valuable real-world experience while helping businesses cultivate a robust talent pipeline. However, developing such a program requires thoughtful planning and a commitment to fostering meaningful learning opportunities. Here’s how to do so successfully. 

Establish Clear Goals and Objectives

Before launching an internship program, determine what you hope to achieve. Are you looking to develop future full-time employees, complete specific projects, or provide mentorship opportunities to seasoned staff? Defining your goals will shape every aspect of the program, from recruitment to daily operations.

At the same time, define what success looks like for your interns. Ensure that your program supports their professional growth by offering learning opportunities, hands-on experiences, and exposure to different facets of your organization.

Sample Policy: Intern Hiring Policy

Assign Oversight Roles

Assigning specific individuals to oversee various components of the internship program ensures accountability and organization. Designate a main point of contact to manage recruitment, placement, and program administration. Additionally, pair interns with mentors or department leads who can assign tasks, provide guidance, and support their professional growth.

Beyond formal oversight, consider pairing each intern with a “buddy” staff member who can answer informal questions and provide insight into company culture. This kind of support system ensures interns have the resources they need to succeed and feel included.

Create a Structured Onboarding Process

Interns, especially those entering a professional environment for the first time, often face a steep learning curve. A well-structured onboarding process is critical in bridging this gap, ensuring that interns feel confident and prepared to contribute to their roles. By treating interns like any other new employee and investing time in their orientation, organizations can set the tone for a mutually rewarding internship experience. The onboarding experience should include: 

• Providing access to systems and tools. Equip interns with the tools they need to perform their roles effectively. This includes setting them up with company email accounts, login credentials to internal systems, and access to communication software. Provide clear instructions or tutorials on how to use these tools and designate someone they can reach out to if issues arise.
• Explaining daily operations. Every workplace has its own rhythm, routines, and expectations. Interns who understand these from the outset are more likely to integrate quickly. Explain the essentials, such as how to check in with their managers, how to log working hours, and how to participate in team meetings. Take time to show them where to find relevant resources and who to approach for different concerns.
• Introducing workplace policies. While interns might not deal with certain policies directly, it’s important to familiarize them with basic expectations, such as dress codes, communication channels, and safety protocols. Beyond compliance, this step helps interns feel confident navigating their roles within the boundaries of your organization.
• Tailoring onboarding for first-time professionals. For interns without prior work experience, it’s especially important to explain processes thoroughly. Avoid making assumptions about what they already know and break down procedures step by step. Everyday tasks such as submitting time sheets or requesting equipment may be entirely new to them, so walk them through these processes clearly and patiently.
• Fostering team connections. Beyond formal instructions, take steps to make interns feel part of the team. Arrange introductions with team members, organize a kickoff meeting, and provide a sense of the roles and responsibilities within the group. Building these relationships early on helps interns feel welcomed and establishes a collaborative dynamic that supports their success.

Article: How Small Organizations Can Attract Good Interns

Develop Meaningful Assignments

A common pitfall of internship programs is assigning work that lacks purpose or strategic value. To create a meaningful experience, plan assignments and projects before the internship begins. Ensure the work aligns with the interns’ skills and interests while also contributing to your team’s goals.

This is particularly crucial if the internship is unpaid because it impacts compliance with the Fair Labor Standards Act (FLSA). Legally, unpaid interns can do tasks that:  

• Provide training similar to an educational environment, such as hands-on learning or projects that align with their academic studies.
• Complement, rather than replace, the work of paid employees. Their contributions should enhance their learning experience without displacing regular staff.
• Are tied to their formal education, such as projects for academic credit or assignments that integrate coursework.

Although unpaid interns can do administrative tasks, assigning repetitive or menial work without explaining relevance or providing learning opportunities is not permissible. For example, having an intern spend their entire internship photocopying or answering phones without any educational benefit would violate FLSA guidelines.

Prepare for Lulls and Offer Growth Opportunities

Even in high-performing internships, slow periods are inevitable. Plan for these by creating a list of lower-priority tasks or “nice-to-have” projects that interns can work on after other assignments are completed. A simple shared document can serve as a resource for interns to find tasks that need attention.

Additionally, provide opportunities for learning and networking. Invite interns to staff meetings, client presentations, and training sessions to expose them to new areas of the business. These experiences help interns build their skills and their understanding of the professional world.

Gather and Act on Feedback

Continuous improvement is a hallmark of a successful internship program. Gather feedback from interns, mentors, and managers throughout and after the program. Ask what worked well, where challenges arose, and what changes could enhance the experience.

Form: Student Internship Evaluation

Use Metrics to Determine Success

Metrics such as conversion rates from interns to full-time hires can provide insight into your program’s effectiveness. Consider these benchmarks: 

• Cost-per-hire for an intern. This measures the expenses involved in hiring an intern compared to an industry hire, providing insights into the efficiency and cost-effectiveness of the hiring process. While useful, it should be paired with other metrics, such as long-term ROI, to evaluate the success of hiring interns who convert to full-time roles and advance within the company, ultimately saving on future recruiting costs.

• Full-time job offer, acceptance, and conversion rates. Offer and acceptance rates measure how many interns are offered and accept full-time positions, reflecting the effectiveness of your recruitment and the appeal of your company. Conversion rate, calculated from eligible interns who accept offers, is a key indicator of internship program success, highlighting areas for improvement in candidate experience, program quality, or benefits to boost future outcomes.

• Declined job offers. Renege rates track candidates who back out of accepted internship or full-time offers, highlighting potential issues in recruitment, engagement, or onboarding. Understanding why candidates renege helps identify and address pain points, such as poor communication or competitive offers, to improve future retention.

FLSA Compliance for Paid vs. Unpaid Interns 

The top question about internships is whether the organization must pay the intern. For private-sector employers in the United States, the answer is almost always yes. Generally, the intern should be paid at least minimum wage as well as overtime. The U.S. Department of Labor (DOL) recognizes very narrow exceptions to the requirements of the Fair Labor Standards Act (FLSA) for private-sector internships in for-profit organizations. Public-sector employers and nonprofit organizations, however, are given greater latitude in determining whether to pay interns anything at all. 

The FSLA defines the term "employ" broadly as including to "suffer or permit to work" ("suffer" is a synonym for "allow"). Technically speaking, the FLSA does not define or explicitly recognize the existence of "interns." Therefore, to avoid the FLSA's requirements for minimum wage and overtime, the worker must qualify as either a "volunteer" or a "trainee." Because the concept of volunteer does not fit well with the for-profit sector, the DOL provides a "primary beneficiary test" to determine whether an intern in the for-profit sector qualifies as a trainee to be exempt from the FLSA's minimum wage and overtime provisions. It's based on seven criteria:

1. Both parties understand that the intern is not entitled to compensation.
2. The internship provides training that would be given in an educational environment.
3. The intern's completion of the program entitles him or her to academic credit.
4. The internship corresponds with the academic calendar.
5. The internship's duration is limited to the period when the internship educates the intern.
6. The intern's work complements rather than displaces the work of paid employees while providing significant educational benefits.
7. The intern and the employer understand that the internship is conducted without entitlement to a paid job at the internship's end.

According to the DOL, “Courts have described the ‘primary beneficiary test’ as a flexible test, and no single factor is determinative. Accordingly, whether an intern or student is an employee under the FLSA necessarily depends on the unique circumstances of each case.”

Quiz: When Can Internships Be Unpaid?

Additionally, states may have their own laws regarding paid versus unpaid internships. 

Misclassification of interns as trainees rather than employees could result in the interns being deemed employees eligible for Social Security withholding and matching, unemployment insurance benefits, and workers’ compensation. The tax ramifications for an organization having “employees” for whom FICA taxes have not been withheld and paid can be substantial, including a 100% penalty for FICA withholding not actually paid by the employer. FICA helps generate funding for Social Security and Medicare. 

The simple solution for private for-profit employers is to pay the intern a legal wage. Doing so will save the organization a lot of risk and concern about whether a particular internship program complies with the FLSA or comparable state law.

Global Issues

In affluent countries such as the U.S. and Australia, it is common for young people to reside temporarily in another country, sometimes by means of an internship. Such international internships are particularly popular with young interns. They can gain the benefits of a domestic internship while also exploring another culture. Occasionally, the internship may result in a job in another country.

Business Solutions: J-1 Intern Visa Sponsorship

Sometimes, however, the temporary residence involves persons from other countries coming to the U.S. on temporary visas. Those who overstay their temporary visas become undocumented workers. Employers should be wary of such situations and should certainly not promote them. Compliance with federal and state immigration laws is a key requisite of employing interns from other countries.