The Kids In The Corner Office

Working the summer before her senior year was a necessity for 20-year-old Kara Kotwas, who is paying her way through a computer-graphics-design program at Syracuse University. When she signed up for an internship, she expected not only hands-on experience with a reputable firm, but also a nice compensation package. "Some companies treat internships like a charity," says Kotwas. "But I can't imagine not getting paid for what I do."

Fortunately Kotwas, like a host of other college students this year, entered the internship market at just the right time. Kodak, where Kotwas spent her summer designing and laying out packaging in Rochester, N.Y., offered her $600 a week, plus health insurance, a rental deposit, commuting expenses and college credit.

Desiree Sylvester knew she needed experience before graduating last spring from Santa Clara University with a degree in communications. But she didn't blink an eye when Hewlett-Packard offered her $16.50 an hour--or $2,640 a month before taxes--last summer to intern full time as a writer on its internal Web site. "I didn't even think it would be unpaid," the confident 21-year-old remarks.

"I went into one interview and they offered me $8 an hour and I was totally surprised. It was enough to make me say 'No way'."

With unemployment at a low of 4 percent, it's a buyer's market not just for job seekers in high tech, but also for interns. Tech companies and Internet start-ups are choosing to fill the gaps, at least in the short term, with what was once cheap labor. Now, interns pull in upwards of $20 an hour, with science and business majors typically earning the most. Recently Cisco Systems CEO John Chambers told an audience of cheering interns they would each receive 500 stock options--as long as they came back to work for the company after graduation.

Stock options, for interns? Talk about a summer learning experience. Students are expected to work just like the full-time employee in the next cube. And in the process, they have spun internships into a form of contract work--albeit for college credit. Some students are turning internships to their advantage: the summer spots become tickets to a full-time job.

Today's college students have discovered that what's good for the graduate is just as good for them. Some firms appear to agree. While medical insurance, relocation assistance, housing stipends and stock options are standard for new hires at most firms, these benefits are appearing in internship packages too.

At Schwab.com, all interns are offered stock options. In addition, college-age interns earn $500 to $600 a week. And graduate students can rake in as much as $5,500 a month for full-time work, plus relocation expenses or a housing stipend. The question is, have students become more interested in the money and perks steered their way than in the experience of the internship? "Students are savvy and aware of the deal," says Darrin Rohr, vice president of talent acquisition at Schwab. "In their mind, and given the job market, it's not exploitation--it's expectation."

A recent search through several intern Web sites (sidebar) uncovered listings for technical interns at Sybase for $18 an hour and programming interns for $2,700 a month at a computer-design company in Arkansas. Marketing interns were offered less--though most still average a healthy $1,400 a month for part-time work.

The Department of Labor and student research sites have yet to chart the increase or number of paid internships, but it's clear that internships are as competitive as other contract work. Melan Jaich, internship coordinator for Santa Clara University's communication department, remembers that when he started 10 years ago, maybe 20 percent of internships were paid. "Now there are nearly no unpaid internships in the private sector," he says.

And just when companies were getting used to bidding for full-time employees, some now find themselves caught in salary tugs of war over college students. "This year we found ourselves competing with Cisco Systems for one intern," says Jay Coleman, editor of Measure, Hewlett-Packard's in-house publication based in Palo Alto, Calif. "The salary became a point of contention. Ours just wasn't high enough, and we had to increase it to get him."

Despite the focus on money, college students still see the educational value of internships as a top priority. In a recent survey, 86 percent said they believe internships are important to their overall education; 88 percent believe those summer positions are key to getting a job, according to the Student Monitor, a research firm based in Ridgewood, N.J., that follows college trends.

Companies are more than willing to give responsibility to interns--and so they should, given the high price they're paying to get them. Few students today encounter the traditional file-clerk internships of five and 10 years ago. Interns are more likely to be designing pages of a Web site, conducting research on the floor of a chemical lab or running their own marketing surveys for a fledgling dot-com short on staff.

Employers aren't looking at college students as replacements for vacationing employees: they view internships as a new recruiting tool and an opportunity to give promising students a test run for full-time work down the road.

"Just as there's a shortage for experienced hires, there's a shortage of entry-level hires," says Rohr, who oversees Schwab.com's internship program. "This gives us a better opportunity to catch them early."

Employers are even beginning to push students for full-time assignments during the school year. The objective is to sell interns not just on the corporate perks, but on the culture, so they'll come back after graduation. Some companies don't think three months is enough time to effectively lure people. Even Coleman admits it's hard for summer students to catch on to Hewlett-Packard rules and style, so some are asked to stay on for the entire year.

Often called "seed" or "co-op" programs, companies say, these longer gigs give a student willing to take a semester off a chance to try a job before graduating. But not everyone thinks they're such a great deal for students.

"Ethically, that's not an internship," says Santa Clara University's Jaich. "Basically, those are full-time jobs and a free shot to see if someone will work out. My guess is they give companies a legal defense so if they terminate the student, they aren't stuck with an employee litigating. I don't deal with those kind of postings."

But Sylvester turned her 15-month internship into a $60,000-a-year job with Hewlett-Packard, complete with full benefits and stock options. She is the fourth intern in four years to be hired full time in her department.

Of course, there are still those quaint, old-fashioned internships where a summer of work is just that, and there are no promises of a full-time position, insurance or handsome wages. Many college students still supplement their paltry allowances scooping ice cream or shelving books at the local Barnes & Noble for wages not much higher than the federal minimum wage of $5.15 an hour.

In Chicago, at the renowned Steppenwolf Theater, interns spend their summers programming computers for sound, lighting and video effects. The pay varies, although Kimberly Senior, the theater's internship coordinator, says technical interns usually earn upwards of $125 a week--more than double the pay of interns in administrative positions.

Senior has a fast answer for those students thinking they might earn $600 or more a week in this internship. "I don't earn that much," she declares. "And so neither do you."

Join the Discussion