Internship programs are a great way for employers to find productive talent, evaluate potential employees, and gain new insights from diverse perspectives. There are obvious benefits. But have you ever thought about all the costs that go into those programs? Not just the hourly rate you pay that intern (and yes, you better be paying interns), but also the cost of their supervisor’s salary, their time spent mentoring those interns, and the cost to recruit and onboard those interns. If you spend all that time and money, you best see a return on that investment through productive work accomplished, more skillfully trained workforce, and hopefully more full-time hires which means less money spent on recruitment efforts!
The true test of most employer’s return on investment for their internship program is their intern-to-full-time employee conversion rate. NACE recently published that the average conversion rate was 66.4%. Which means nearly 44% of interns don’t accept full-time offers from an organization or renege on offers because of the lack of growth opportunities, ineffective communication strategies, and feeling insignificant or unvalued. In order for employers to increase their ROI, here are a few tips to improve their overall internship programs.
Cost Benefits of Internships
Internship programs are a great method to increase brand awareness on college campuses, increase company productivity, increase diversity and inclusion efforts, and give back to the community. But they’re also an inexpensive way to find new employees. Interns provide inexpensive labor and typically require no benefits. They also provide employers with access to a larger pool of qualified new hire candidates by giving them a better understanding of a candidate’s capabilities by seeing them in action rather than just reading their resume or profile on a job board.
Hiring a full-time employee without an internship program is expensive and ineffective. There are external costs including third party recruiting agencies, advertising, job postings, job fairs, travel, background checks, and drug tests. Internal costs include the salary and benefits of the recruiting and hiring team and the talent acquisition systems used to recruit, hire, and onboard new employees. An easy way to track your cost per hire is to add all external and internal costs together and divide it by your total number of hires. Internship programs can eliminate this overall cost by simply converting interns to full-time hires.
Calculating Your Current Internship ROI
If your organization already has an internship program in place, you should calculate your current ROI by discovering the number of eligible interns (which are interns graduating and pursuing full-time career opportunities) and the number of accepted offers. Then take the number of accepted offers and divide that by the number of eligible interns. Take the total number from that equation and multiply it by 100 to get your percent conversion rate. If your percentage is low, use these tips below to improve your ROI.
Eligible interns: 60
Accepted offers: 40
Percent conversion rate: 40 / 60 = 0.66 X 100 = 66.6%
How to Improve Your Internship ROI:
Save Time Onboarding Interns
Onboarding an intern can be much easier and more time efficient than onboarding fulltime employees. To efficiently onboard an intern you must efficiently communicate with them before their start date and throughout the program. You should send them follow-ups and reminders to keep them informed and up to date. Supervisors should use video meeting tools and live chats to communicate with interns quickly and to provide them with quick answers to their questions. Another great onboarding tactic is to provide all HR paperwork and company documents digitally in one place, so interns can access all documents at the same time and easily identify which forms still need to be completed. During their first few weeks be sure to schedule training sessions and mentor meetings to help them easily adapt to the company culture and workflow.
To increase an intern’s productivity, you must know how self-sufficient they are. This is why it’s important to track their productivity. Provide interns with a virtual task list so they know what to expect and how to prioritize their responsibilities so they can stay on top of all their assignments. Allow interns to manage their task list and keep projects and calendars in one virtual setting to easily track their progress. Supervisors should also create learning objectives for their interns to ensure continuous learning, growth, and professional development. This will keep your interns engaged and motivated to strive towards new goals and objectives. Then, hold weekly or bi-weekly progress report meetings to evaluate all of their accomplishments and discuss their work for the next few weeks.
Convert Interns to Fulltime Employees
Throughout the entire duration of the internship program, supervisors should reinforce that a permanent job is the main goal at the end of this process, and that it’s a two way street. Just because they complete the program doesn’t mean they’re guaranteed a job offer, and just because you offer a fulltime position doesn’t mean they’ll accept it. In order to create a high offer acceptance rate, be sure to create an attractive career path for your interns. Evaluate their past accomplishments and discuss their desires for the future to determine where they would fit best in your company. Continue to offer professional development and growth opportunities to help them visualize a long-term career with your company.
Advanced communication efforts, follow-ups and reminders, online resources, task lists, productivity tracking, learning objectives, engagement data, and performance reviews can all be easily and efficiently completed through the GradLeaders Intern Management System. This best practices built into this system have been utilized by more than 7,500 organizations across the country. Those who utilized these best practices reported:
• 100% satisfaction rate of interns, supervisors, and mentors
• 70% increase in intern productivity
• 50% of managers saved at least 2 hours of onboarding time per intern
• 34% of companies were able to increase the size of their internship program
The Intern Management System allows your organization to automate every aspect of your program, from onboarding to professional development. Need help calculating your internship program costs and ROI or want to increase your return on investment? Contact us today. Our simple calculator makes it easy to estimate how much time and money you can save with our Intern Management System.