Paid vs. Unpaid Internships: How to Decide

One of the key objections we field from prospective students is: why should they pay for an internship, when they could push for a paid one?

Written by

Sigrid Kenmuir

Let’s first acknowledge that, in many cases, the option to take an unpaid internship is a privilege. Some students have to ensure that they earn money during their college vacations; an unpaid internship simply isn’t an option for them.

We work with students from all over the world, although many of them are studying at colleges and universities in the United States. Both our founders, Aaron Fuchs and Rafi Khan, studied in the States. We know first hand how much pressure there is to get the right internships in the small window of a college career. 

As each semester passes, there are many factors that go into making the right decisions. Each student must decide on the location and format, between different industries and companies, and on whether they take the chance on an unpaid internship or gun for a paid one. At first glance, this last choice seems obvious: who would knowingly say no to money? As simple as it sounds, the reality is more complicated.

Why would you take an unpaid internship?

There are actually quite a few reasons to take an unpaid internship. That’s why it’s a privilege to be able to consider it. All internships can be a foot in the door at a company, but the world of companies opens up much wider when they don’t have to pay you. For many companies — especially startups but even global corporations — managing interns is intense. Many college students go into internships with little to no work experience; this is especially true for freshmen and sophomores. 

What makes iX Summer internships different?

One thing that makes iX Summer internships wildly different from the run-of-the-mill internships – paid or unpaid – is that they are a formative learning experience. Each programme is a combination of practical, hands-on learning, that prepares students for the second part, the internship. This allows students the chance to learn about the industry in which they’ll be working, and have the benefit of on-the-ground guidance from both their teaching team and the internship team. 

In addition, instead of throwing students in at the deep end and hoping they swim in an unfamiliar company and environment, our students are mentored and guided through the waters of professional communication, handling themselves in meetings, teamwork, and so much more in their six weeks with us. This isn’t an opportunity for host companies to have a coffee gopher on hand. This is a mentored, guided learnership experience that has often changed the trajectory of our past students’ careers.

6 things to consider when choosing your internship

Ultimately, every internship is done with a view to maximizing earning potential, either immediately or in future. This is fundamentally what the paid vs unpaid internship question addresses. A paid internship delivers instant financial returns, but an unpaid one can provide a whole lot in several critical ways. Here are six key things to consider when deciding which internship option is best for you.

1. Expectations.

Paid internships often come with the expectation that it will end up in an offer of employment after graduation. Interns in those situations often end up working within a sub-team under the supervision of a middle manager. This generally results in the intern’s work being limited by the scope of the sub-team, and at the mercy of the manager in charge. 

What this means in reality is that many paid internships end up being paper-pushing scenarios, where “just get the intern to bring us coffee for this meeting” can become the norm. Interns in these situations are often unable to bring much in the way of meaningful contributions in meetings or on a strategic level, which can lead to a sense of exclusion. 

On the other hand, according to Handshake, an unpaid internship comes with slightly more freedom: it’s a “low-risk, practical environment. By nature, an unpaid internship allows you the chance to grow and learn about the job and industry without some of the expectations of a paid role.”

This is why iXperience internships are scoped ahead of time, allowing the teaching team and the internship company to agree on what they want to get out of the collaboration. The internship project is defined before the program even begins to ensure that every student gets to apply their newly acquired skills meaningfully while having the freedom to explore a potential career path. By its nature, it’s designed to be the best of both worlds as far as is possible.

2. Exploration

Many college students still don’t know exactly what they want their career to look like. It’s alright, it’s common. For those undecided souls, an unpaid internship can represent the chance to explore what their future might look like, whether its in their chosen field or another one that’s piqued their interest.

According to Capital Placement, a placement agency founded by former interns, “an unpaid internship opportunity is an obligation-free way to explore your passion. You’re free to find out if your current industry is to your liking. You can see how a company works firsthand, job shadow other people, and even attend company training courses or gain professional qualifications which may be offered by the company.” 

Whereas paid interns often have a “job description”, tasks, and a junior role within a team, unpaid interns are often given larger, more strategic tasks as the risk of doing so – for the company – is low. It’s easy to give a high level task to an unpaid intern, because there is no expectation of ROI as there is no investment. When you’re paying someone, you naturally want to see results, even if they are minor ones.

This chance to intern unpaid gives students a real taste of what work in their chosen field might be like, allowing them to work out early on in their college career whether it is aligned with their personality, skills, and talent or not. Both are valuable realizations to come to!

3. Availability

While there are paid internships available, they have to pay dividends. The barriers to entry are higher, and the competition far more fierce. For those companies who hire paid interns, it’s crucial to find ones who can give as much as they get – simply put, they need to perform. Herein lies the age-old conundrum: you need work experience to get work experience.

This is where unpaid internships come in. Previously, we mentioned that these internships carry with them less risk giving the intern a chance to do something greater. But they also simply give the intern a chance. A chance to get the work experience they need to land that paid internship next time around.

This is one of the main reasons that many students start out doing one or two unpaid internships to determine their true interests (to the point above) before seeking out paid opportunities down the line. Playing your cards right by strategically balancing unpaid and paid opportunities can influence what kind of experience you end up being able to advertise to show your worth to future host companies. 

Capital Placement goes on to point out that, “paid internships, compared to unpaid ones, are few and far between. While you may succeed in finding a paid internship, the chances of you getting one in your field of choice are low.” Doing an internship as part of an iXperience course, though, addresses the availability issue: every student who does one of our courses is placed in an internship, providing international work experience that has been cited by many iX alumni as instrumental to their career progression.

4. Skill level

For many companies, the risk of hosting interns is that a college student hasn’t yet developed the industry-relevant skills — like business acumen, communication aptitude, strategic thinking ability, and so on — to be able to contribute meaningfully to the company’s mission. As such, many companies view the prospect of hosting interns as more of a resource-negative experience than one that furthers their work positively. 

It’s not always an unfair perspective. University courses teach theoretical skills, but often not much in the way of hands-on, daily skills like professional communication, goal setting, and networking, among others. It’s one of the root causes of interns having negative experiences: what it boils down to is a foundational lack of trust. Companies don’t always trust interns to have the necessary skills and interns don’t trust businesses to let them explore. 

More than 250 companies around the globe trust iXperience to place interns with them, though, specifically because of the comprehensive upskilling that our courses provide. Our corporate partners know that the iX interns they’re getting are eager to learn, have foundational skills in a future-focused areas, and get additional support from the teaching teams. On top of all that, iX courses come with career preparation workshops — like how to present with impact, how to communicate in the workplace, teamwork dynamics coaching and more.

5. Support

In almost all cases, the amount of support a paid intern will receive is unknown. It depends on the company culture, schedule of reporting managers, workloads, even the time of year. Some bosses are better than others! Keeping in mind that internships are first and foremost about learning, having appropriate support is critical for any student’s ability to get the most out of the experience. 

Broadly speaking, paid internships come with more accountability in terms of the reporting structures that are in place, which can be an advantage. Unpaid internships, thanks to their less formal nature, might not come with as much support. 

This, again, is what sets iXperience internships apart: each and every student has an industry professional Head Teacher as well as a project-dedicated Teaching Assistant to lean on when things get confusing, unclear or frustrating. That’s another point to note: no matter how high up the corporate ladder you climb, there will always be communication breakdowns, unclear objectives, and even personality clashes! It’s absolutely normal. The skill is learning how to deal with these situations effectively and professionally. That is where our coaching comes in handy.

6. Future earnings

Returns in a paid internship are instant. You work, you get paid. Returns in an unpaid one are much more long-term. In a scenario where you’re able to define your project outcomes, work hard, network with people in your chosen industry, and achieve something that’s aligned with your career ambitions, it’ll kickstart your career to catapult your future earnings when you begin your real-world career after graduation. Yes, small earnings matter at the start (most of us have been poor students at some point!), but having the higher level of experience to negotiate better salaries in future is a great thing to have in your pocket. After all, experience is everything! 

So, how do you choose the right internship?

Well, as you can see there’s no one-size-fits-all approach that works to answer this question. It’s more of a Venn diagram or a decision matrix than a simple question and answer. Evaluate your own needs and wants, work out how much freedom you have (and need) to explore to figure out your path, and then use that information to make your decision.

Whether you can take the chance on an unpaid internship — or in the case of iX Summer, a paid-for course plus internship — is up to you. What we know is that every student who gives our programme a chance is glad they did so. 

Image sources: 1, 2, 3, 4, 5

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