What You Need to Know Before Hiring an Intern

-- by Molly Tranbaugh and Erica Akitani-Bob

It’s great to have an energetic, young student come and support your business or fund during the summer or the school year. At the same time, there are rules around these things (including around how much you pay them). Before diving into the process of hiring an intern, it's crucial to arm yourself with the right knowledge and strategies. In this two-part post, Molly will walk you through some of the legal considerations of hiring an intern, followed by tactical advice on implementing an effective internship program from Erica.

Molly’s tips for hiring an intern.

Sign a Contract. When you’re moving a million miles a minute, bringing on an intern informally to help out here and there may seem like the path of least resistance, especially if they will only be with your company for a short time. We strongly recommend signing a written agreement with any intern to make sure that everyone is clear on compensation, expense reimbursements, who they’ll be reporting to, what they’ll be expected to do, any company policies they need to abide by, to emphasize that they are not employees of the company, and to protect your IP (more on that below). Taking the time for this extra step at the outset of the relationship can save you major headaches down the line, such as disputes over paychecks, use of social media, the dissemination of your confidential information outside the company, or the expectation that the internship will lead to a permanent position.

Protect your IP. Your interns should understand that some information they receive or have access to is sensitive and confidential—they cannot share this information with friends or family, even in casual discussions, and their handling of this information is critical to the business. Consider whether you can limit the interns’ access to certain share drives or files if they will not need that information to carry out their responsibilities, therefore reducing the risk that this information will be shared with third parties. Interns should also understand that any work product they create during their internship belongs to the company. These are key reasons to sign a contract: to require that the interns have acknowledged these obligations in writing, agreed not to misuse confidential information of the company, and that the company will have all rights to their work.

Follow Rules for Unpaid Interns. If you are not compensating your interns for their work, the relationship must be structured so the intern is the “primary beneficiary” of the internship under the Fair Labor Standards Act. Here are the general steps you should take to help meet this requirement (but note that these steps can vary from state-to-state, and you should seek specific advice to ensure your company is in compliance).

The intern should clearly understand that the internship is unpaid—do not imply or state that you might be able to pay them at some point during the summer, and make sure the intern is very clear that they will not be entitled to a paid position after the internship. Provide plenty of training and education to the intern throughout the summer. If the intern is still in school, be sure to ask if they are eligible to receive academic credit and take the steps needed to help them qualify for those credits. If you’re hiring an intern during their academic year, structure their hours and duties to accommodate their class schedule. Finally, do not give the intern any tasks that would displace the work of your paid employees. This suggests that the intern could serve as an employee of the company and is entitled to compensation.

Erica’s tips for hiring an intern.

As we drafted our email campaign schedule, this was the one topic I knew we had to talk about. As the non-lawyer at All Places, I don’t have any legal recommendations (Molly does though, see above) but aptly, I do have a bachelor’s and master’s degree in industrial labor relations, served as my undergraduate convocation speaker, and for two years led strategic operations for the Labor and Employment Law practice at a national law firm. None of that makes me qualified for what I’m going to share. What does? The 50+ letters of recommendation I’ve written for students as a graduate teaching assistant, my own experience as an intern and my experience hiring and managing interns at high-growth startups.

If you want to hire an intern, here's the quick and dirty of how to set them up for success.

Remember, you’re hiring an intern. Regardless of their university’s prestige and their prior internship experience, you’re (most likely) hiring someone without any full-time professional experience, and this requires a higher degree of patience and guidance. Do you have the bandwidth to train them? Pre-set processes in place they can follow and use as guardrails? This early on in their career, they won’t know what they don’t know, and as their manager, it’s your responsibility to teach them. Clarity on your own expectations around the time and “value” you expect from an intern is the most important step to making a good hire.

Training and Development. Working at an early-stage company is like driving a car while fixing the engine. You’re constantly switching gears as priorities shift and so, you want to make sure that whoever’s in the car with you (especially if they’ve never driven before, aka your intern) knows the rules of the road. This means crafting a high-level program that outlines what they will be working on, what they can expect to learn, and what the final deliverables are. That program will not only be their roadmap for onboarding and throughout their internship but also ensure they have a steady stream of work. As much work as there always is to do at an early venture, oftentimes the amount of time it takes to walk someone through it in real time, takes 3x longer than it does to just do it yourself. So, you end up doing it yourself. Having a set program in place will allow you to preschedule those project meetings and work together.

You should hire more than one. Three-quarters of an internship is learning and one-quarter is the experience. And the best experiences are done in pairs. Having a friend at work is linked to higher job satisfaction, performance, and overall mental health. Hiring more than one intern will help them better integrate into company culture and participate with less anxiety.  

Cultural fit. Referring back to my first point, more than hard skills (they’re young enough where “good time management” is a listed skill on their resume) you want to hire for soft skills. You’re going to have to train them any which way you cut it, so hire a candidate who believes in your mission, is personable, and most importantly, is coachable. As a teaching assistant, I couldn’t guarantee if any student I wrote a recommendation letter for knew how to send calendar invites or create a pivot table. But I did know who got A’s and skipped the larger lectures and who got B’s but came to office hours and asked clarifying questions, and the B student is almost always the better hire.

An internship program can be great for your business and provide the interns with invaluable experience as they launch their careers. Keeping these tips in mind can help ensure that both sides make the most of the relationship.

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