Business School a university for the real world


05 March 2020

With intense competition for graduate jobs, internships have emerged as a common practice amongst students and graduates to gain work experience and increase employment prospects.

  • Internship brokerages – a thriving new business model
  • Internships promoted as increasing graduate job prospects
  • Intern pays brokerage fee, airfares, visa and living expenses with most internships unpaid
  • UK study found those who undertook unpaid internships earned less than

In this context, internship intermediaries or ‘brokers’ have proliferated, offering placements in domestic and overseas businesses, often unpaid, arranged for a significant fee, and with no guarantee of a job at the end, a study by QUT Business School Professor Paula McDonald found.

Professor McDonald examined the websites of 25 internship intermediaries to study the nature of the internships they offered and how these businesses functioned.

“Most of the firms offered placements in a variety of disciplines, partnered with prestigious universities and organisations and promised many employability benefits,” Professor McDonald said.

“‘Open market’ internships are negotiated by individuals through their own networks or via the services of private ‘brokers’ and are elective in that they are not a mandatory part of a course of study.

“Despite being voluntary, open market internships are often promoted or endorsed by universities to produce work-ready graduates, provide their students with a labour market advantage, and demonstrate responsiveness to industry needs.”

Professor McDonald said no published research had yet addressed how internship brokers operated, especially in the face of such criticisms as undermining graduate employment, promoting the exploitation of free labour from young people, and entrenching class inequality through their high costs.

“Few countries impose quality standards on internships. In some European countries, and particularly France, effective supervision by both the institution and the host organisation, limits on working hours and payment for placements longer than two months are required.”

Professor McDonald said the sites’ advertised costs for internship placements amounted to thousands of dollars, especially for those overseas.

“The intern has to pay for airfares, visas and living expenses in the host country while working, most often, without payment.

“Internship participants tend to report subjective employability benefits such as improving their analytical or critical thinking or providing a competitive advantage in the graduate marketplace.

“However, recent research in the UK found university graduates who undertook unpaid internships earned less, 3.5 years after graduation, than peers who had gone into paid work or further study upon graduation,” Professor McDonald said.

“Another study of unpaid, open market internships in Germany found the same negative employment outcomes as the UK study.

“This indicates that empirical support for positive links between work experience and employment is tenuous and incomplete.”

The study found that internship brokers:

  • advised participants to crowdfund, get a job and save, take out a loan, seek funding from their university, or use frequent flyer points to fundraise for their internship. 
  • offered placements on their websites in a wide variety of mainstream disciplines operated in multiple countries with only five operating in a single country
  • promised employability capacities included disciplinary content, knowledge and skills, opportunity awareness, career decision-making skills and job search skills
  • promised participants gains in self-confidence, self-awareness and communication skills
  • offered a range of support including coaching and mentoring
  • offered few specific assurances of proactive oversight of the tasks and activities assigned to the intern or a guarantee of learning outcomes
  • did not directly promise participants success in a job after the internship

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