By Nathan Parcells
SAN FRANCISCO (TheStreet) -- It's no secret employee pay is an essential aspect of every company. A great salary and benefits package can win the interest of even the most happy employed professional. But what about the power of pay when it comes to your interns?
The conversation surrounding internship compensation has been in the news because of several unpaid-internship lawsuits. They included a few big name (and also big budget) employers including Fox Searchlight, Donna Karan and Conde Nast. Even in light of these lawsuits, unpaid internships are still thriving. In fact, according to a recent InternMatch survey, 36.9% of companies still offer unpaid internships or internships that pay less than minimum wage.
It's time for employers to wise up to the fact that pay, even in terms of your internship program, can have numerous powerful, positive, lasting effects on your company. Still not sold? Consider these tagalong benefits of transitioning your internships from unpaid to paid:
A boost to your intern applicant pool
If your internship job listings aren't drawing in much more than a few tumbleweeds or chirping crickets, there's one thing you can do to spike interest: pay. On InternMatch we typically see two and a half times more applicants applying to paid internships than their unpaid counterparts.
Let's face it: Taking on an unpaid internship is a privilege because it isn't cheap. There's the commute, rent, general higher cost of living in a city and a whole slew of other monetary burdens placed on students and recent graduates just looking to gain experience. But offering at least the federal minimum wage to interns opens the door to students who may not have been able to accept an unpaid internship due to lack of funds or because they were making time for the part-time or full-time job helping them make ends meet.
An impact on companywide diversity
Building a diverse workforce is essential to the success of your company. Still, only 30% of more than 300 businesses surveyed by my company believe their internship programs are highly diverse. This isn't something you can change overnight, but by establishing paid internship opportunities, you'll be more likely to draw in a diverse group of intern candidates.
Paid internships help offset some economic aspects holding back women and people of color from taking on internships. According to two studies, women and people of color are two groups experiencing some of the greatest repercussions of student debt. Another 2010 study from the College Board Advocacy & Policy Center found student loan debt levels of $30,500 or higher were more common among 27% of African American bachelor's degree recipients, compared with 16% of their white counterparts.
Pay makes for happier interns
Sure, avoiding a lawsuit is one reason for happiness spurred through paid internships. But pay also ignites a happier, more engaged environment for interns.
Your paid interns will have more of a reason to be excited to come to the office, contribute and feel valued. This is because they're more likely to be spending less time worrying about paying their bills or "making it" in the city they've temporarily relocated to just to take part in your internship.
Pay will lend your intern a pat on the back
Adding a clause to pay at least the minimum wage to the bottom of your internship job listing won't just win you some extra clicks, it will also win you respect.
Engaged, happy interns will feel respected and valued knowing that you're willing to go above and beyond to pay them -- unlike many, many other employers. Plus, interns talk. Word will travel fast that you're willing to pay up, and that could mean great things for your company, like employer brand awareness.
Paid interns may save your talent pipeline
Today's interns are tomorrow's employees. As the "graying of the workforce" continues, it's more important than ever to beef up your talent pipeline. Thankfully, a steady flow of talented intern candidates can do wonders.
By providing students with paid internships, you're essentially working to better your talent pipeline and the economy as a whole. This is because 60% of paid interns are converted to full-time hires -- if not by their internship employer, by another company.
When it comes to your internship program, pay is more powerful than you may have thought. It may be challenging to allocate funds to pay your interns, but it's a worthy investment.