Unraveling and reneging in the summer internship market

 There are some costs to unraveling of offer dates, and some of them are borne by the companies that make very early offers. The WSJ has the story:

Summer Interns Jilt Companies as Better Offers Come Along. Some young professionals in training are job-hopping between internships before they even start, frustrating companies and campus career advisers.  By Lindsay Ellis

"Many college students are juggling multiple summer internship offers as companies try to lock in entry-level talent. So fierce is this year’s competition, recruiters and career advisers said, that some students are reneging on summer stints they accepted back in the fall as recruiters barrage them with interview requests and richer offers. Companies and colleges say reneging is still rare, but it is becoming more pervasive in the current recruiting frenzy.

...

"Some 15% of students who had accepted a 2022 internship offer in November said they were still “actively searching” for another offer, according to a survey of more than 100 students by research and analytics company Veris Insights.

"Corporate recruiters, including at Liberty Mutual Insurance Co. and General Mills Inc. , said more students are backing out of internship offers this year. Liberty Mutual said it is reviewing pay benchmarks. Other employers and campus career offices said some companies have boosted intern pay for certain in-demand students. Still more employers are stepping up contact with students between the time they accept offers and when they start jobs to keep them engaged.

...

"Students used to feel sheepish about backing out of offers, but Elizabeth Diley, campus talent acquisition leader at General Mills, said she has observed less remorse. The cereal and food maker usually hires about 150 interns each year; now it plans to over-hire, betting that some percentage of interns will renege on offers before their summer jobs start, she said.

"Companies typically recruit summer interns early in the academic year to lock in potential talent. The problem this year with commitments made months ago is that the hot job market is generating lots of new offers that can lure students away."

Are there too many interviews for medical residencies and fellowships? Should there be an interview Match?

A recent article in JAMA considers the question in the title of this post:

September 21, 2018
Matching for Fellowship Interviews
Marc L. Melcher, MD, PhD; Itai Ashlagi, PhD; Irene Wapnir, MD

"Most surgical training programs interview many candidates because the consequences of not matching harms the reputation of the program and affects the work force of their services.5 Surveys of pediatric surgery program directors in 2011, 2012, and 2014 revealed that they interviewed a median of 24 to 30 candidates per year. However, the median rank at which the programs matched was less than 4, and programs never matched beyond their 12th choice, suggesting that they did not need to interview as many residents as they did.
...
"instituting an interview match may be one approach to help improve the interview selection process by reducing the large numbers of unfruitful and costly fellowship interviews. For example, Ashlagi et al7 found in a theoretical matching model that when candidates and programs each have highly heterogeneous preferences, limiting the number of interviews improved the efficiency of the matching process. Thus, fellowship interview matches represent an opportunity to reduce the excessive number of interviews and optimize the selection of applicants.

"A practical strategy that may achieve this goal is an interview match that precedes the existing match. After applications are submitted, candidates and programs submit rank lists that could be used to fill limited interview slots. Mechanisms that enable applicants and training programs to signal interest in each other have been proposed.4,7 By ranking candidates and programs highly, both essentially are respectively signaling their strong preference for each other.4 Therefore, fewer interviews might be sufficient for candidates and programs to identify mutually desirable matches and reduce the number and costs of interviews. If the program and candidate interview slots remain unfilled, a secondary match could be performed to fill unmatched interview slots.
...
"n conclusion, a well-designed interview match may help reduce excessive costly interviews while more efficiently pairing candidates and programs, so that both achieve as many highly ranked choices as possible. This strategy could be applied broadly to matching programs in other medical specialties and may be attractive at earlier career stages such as residency interviews."
************

And here's a related news story on the Stanford Medical School site:

The current fellowship interview process is cumbersome — Stanford researchers have a better idea

"In their fourth and fifth years, surgical residents are busy: They're caring for patients, assisting junior trainees and fulfilling their own training requirements. And that's not all: About 75 percent of these residents are scrambling to squeeze in interviews for fellowships across the country, often packing in between 6 and 15 interviews to ensure they secure a spot, Stanford transplant surgeon Marc Melcher, MD, PhD, told me.

"Fellowship program directors, including Stanford surgeon Irene Wapnir, MD, who directs the breast surgical fellowship, are similarly harried. To fill typically one position, the directors can interview 20 or more doctors to find a quality candidate whose interests match their program.

"The process is also expensive and time-consuming. When experienced residents leave, their coworkers need to cover for them, and the residents must pay their own way to travel to interviews, Melcher said.

...

"Melcher and Wapnir reached out to their Stanford Engineering colleague Itai Ashlagi, PhD, who specializes in the design and analysis of marketplaces, such as matching kidney donors with recipients.  Together with Alvin Roth, PhD, a Stanford economist, they're proposing a new fellowship interview matching system. Their concept appears in JAMA.

"The researchers propose two key changes. First, applicants and programs would signal their preferences for each other — before making travel arrangements and setting aside days of valuable physician time. In addition, the number of interviews for each fellowship program would be capped, as would the number of interviews for each candidate, Melcher said."

Israeli law internships serve multiple purposes, as recent changes make clear

Internships and pre-licensing employment under other names serves multiple purposes. One purpose is to train future professionals. Another might be to limit entry into a profession. Both things seem to be at issue with law internships in Israel.

Ynet has the story:
New two-year internship challenges Israeli law students
While senior lawyers welcome new regulations announced by Justice Minister Shaked, law students complain internship is akin to 'modern slavery.'

"Israeli law students will now have to complete a two-year internship in order to become certified lawyers as part of new regulations announced by Justice Minister Ayelet Shaked on Tuesday.

"The current requirement is of a one-year internship. The new regulations will come into effect for all students starting law studies this fall.

"In her remarks at the annual conference of the Israel Bar Association, Shaked clarified that the process of being admitted to the bar would now take five years including studies.

"I decided to extend the length of the required internship period to two years believing that law students will be much better qualified and prepared to take their bar exam, and will have to show a great deal of dedication in order to become lawyers," Shaked said.

"This will lead to a decline in the number of lawyers, and an increase in their professional expertise," she concluded."

Internships may be unpaid, court rules, if they benefit intern more than employer, and serve an educational purpose

A class action lawsuit, seeking to make many unpaid internships legally repugnant, has been sent back to a lower court.  The NY Times has the story:

Employers Have Greater Leeway on Unpaid Internships, Court Rules (this is one of those cases in which the URL is more informative than the headline:  http://www.nytimes.com/2015/07/03/business/unpaid-internships-allowed-if-they-serve-educational-purpose-court-rules.html? )

"Employers  have considerable leeway to use unpaid interns legally when the work serves an educational purpose, a federal appeals court ruled on Thursday, setting aside a lower court decision that the movie studio Fox Searchlight Pictures had improperly classified former workers as unpaid interns rather than employees.

The decision, which sends the case back to the lower court, could have broad ramifications for the way employers rely on unpaid labor. It erects large barriers to further class-action lawsuits by unpaid interns against companies where they had worked."
*********

Here's an op-ed regretting the decision: Interns, Victimized Yet Again, by Ross Perlin the author of “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy.”

More on unpaid internships and repugnance

Over at the Chronicle, the issue seems clear to journalism student Peter D'Amato: The Unpaid Internship Is Indefensible

And he's not alone, he reproduces this image:


My previous post on Should unpaid internships be repugnant drew some interesting comments...

Unravelling in the Business School job market

The WSJ has a video report

Here's the caption: 

Top B-School Talent Plucked Before Class Starts

Schools try to restrict when companies can start coming to campus. But that doesn’t limit what companies try to do off-campus, and it’s not uncommon for students to show up at orientation with internship offers for next summer in hand.

HT: Jon Levin

Law schools forming law firms to employ new graduates

The NY Times has the story. The quote is from the dean of the Arizona State U. Law School: To Place Graduates, Law Schools Are Opening Firms

"“I realized that was what we needed,” Mr. Sylvester recalled. “A teaching hospital for law school graduates.”

"The result is a nonprofit law firm that Arizona State is setting up this summer for some of its graduates. Over the next few years, 30 graduates will work under seasoned lawyers and be paid for a wide range of services provided at relatively low cost to the people of Phoenix."

Summer law associates: offer rates

The blog Above the Law is tracking law firms which give permanent offers to 100% of their summer associates, before they head back to their third year of law school.

They compiled a similar list for 2011, and updated it here.

That update ends as follows:

One caveat: note that these 100 percent offer rates might include so-called cold offers, in which a firm makes an offer to a candidate, but suggests that perhaps the candidate should not accept it. E.g., “We’re making you an offer [so we can boast about our 100 percent offer rate], but we think you might be happier elsewhere [wink wink], so you might want to look into the 3L recruiting process [don't come here unless you want to work out of a utility closet].”

Cold offers are frowned upon in many quarters. Here is what NALP has to say about them:

11. Cold or Fake Offers

Q. It is reported that some employers give offers to summer associates with the understanding that the offer will not be accepted. What is NALP’s view of this practice?

A. NALP does not condone this unethical practice. Whether initiated by students to appear more attractive to future employers or by employers to enhance their offer ratios, the practice is fraudulent and unprofessional. NALP suggests that employers adopt a standard policy of extending or confirming offers in writing, signed by a representative of the organization, so that only legitimate offers are made.

Medical internships in Australia are in short supply

Medical students languish in a critical condition

"The Australian Medical Students' Association estimates almost 500 students will miss out on an internship next year because of insufficient places. Under the internship system students must work for a year under supervision in a hospital before they can work as doctors.

"Recent changes to the application process have further complicated the situation in Victoria. International students will now have priority for internships over Victorian students who have studied interstate but want to return for hospital placements.
 ...

"Australian Medical Association president Steve Hambleton points to the curious situation where the nation has a shortage of doctors, yet there are too few internships. A report by Health Workforce Australia has forecast a shortfall of 2701 doctors by 2025.

"The placement system has fallen apart, he says, because the federal government regulates the number of students universities can enrol while its state counterparts oversee the provision of internships. ''Nobody's got the control levers for the pipeline,'' he says.

"A complicating factor has been the ability of universities to enrol an unlimited number of full-fee-paying international medical students without guaranteeing a hospital placement at the end of the course."

Unraveling of tech recruiting

Revenge of the Nerds: Tech Firms Scour College Campuses for Talent


"On college campuses these days, the top nerds are getting a taste of what it's like to be star jocks.

"For Maxwell Hawkins, a computer science and art major at Carnegie Mellon University, the moment came in March. A technology recruiting firm sent him a letter by FedEx urging him to drop out of his junior year and take his talents to work for a start-up.
... "The technology boom has created an acute shortage of engineers and software developers. The industry has responded by taking a page from the playbook of professional sports: identify up and comers early, then roll out the red carpet to lock them up.

"With the social media frenzy in full swing, promising students are now wrestling with decisions about whether to stay in school or turn pro.
...
"The National Basketball Association has a rule called "one and done" that requires players entering the draft to be 19 or have completed their freshman year of college. But some prospective programmers aren't even making it that far.

"Sahil Lavingia was a freshman at the University of Southern California in 2010 when he got an email from Ben Silbermann, chief executive and co-founder of the fast-growing online scrapbook Pinterest. Mr. Silbermann was looking for help building a version of Pinterest for the iPhone and happened upon a data tracking app developed by the self-taught Mr. Lavingia.

"Figuring the young student "seemed like a go-getter," Mr. Silbermann drove up to Berkeley from Silicon Valley to meet Mr. Lavingia, who was coming to the Bay Area for the USC-Berkeley football game. A few days later, Mr. Lavingia had an offer in hand and took a leave from school to take the job.

"Some companies are grabbing talented programmers even before they reach college. Luke Weber taught himself how to design computer games in high school and became one of the most popular contributors to Roblox Corp., a company that lets its subscribers play games developed by its users.

"After graduating, he attended a Roblox conference last June and met the head of the company's marketing department, who asked him if he wanted to shoot some videos to teach people how to make games. The videos turned into a design job, and now Mr. Weber, who has postponed plans to go to college, works three days a week for the company producing games and virtual goods for $25 an hour.

"At 18, he is the youngest employee of the company."

Unraveling of law internships in Israel

Haaretz reports:
Law students to apply for internships only from third year: Israel Bar Association's council approved the rules governing job offers for internships, though they still require the justice minister's approval.

"Law students will only be accepted for their internships during the third and next to last year of their studies from now on, the Israel Bar Association's council decided yesterday.
 ...
"In recent years, law students have started arranging a place for doing their articles as soon as they start their studies, said attorney Orrin Persky, the head of the Bar Association's committee on internships. He explained that this pressure emanated from both the students and the law firms and has created a market failure for finding such posts.
In addition, there are a large number of complaints about students canceling their internship positions, which they had agreed to a year or two earlier.
The new rules would require firms and all other bodies providing internships, such as the State Attorney's Office, to start interviewing no earlier than March 15 of the student's third year for the internship that will start in the following calendar year."


HT: Ran Shorrer

Should unpaid internships be repugnant? (Many are already illegal...)

The NY Times hosts a debate: most of the debaters think the answer is "yes": Do Unpaid Internships Exploit College Students?

Alex Peysakhovich writes

"I talked to a friend of mine who is in the music recording business about this. He started work in a studio as an unpaid intern (for about 6 months) then got hired onto the staff. For reference: they usually have about 3-4 interns and 1-2 staff in the studio during business hours, so most of their labor hours come in from free sources (but it counts as training since interns do most of the tech work).

"He gave me the "well, that's how the business works... if they want to enter the business they need to put in the time." He didn't really buy the "lots of unpaid internships are exploitative" arguments making the, very economist point, that they're giving a chance to let the interns signal their actual interest and ability.

"How much of this is selection (he thought it was ok so he did it) vs how much is "it's hard to make a man understand something when his paycheck depends on him not understanding it," I'm not sure."

More interns and younger ones fuel the war for talent in Silicon Valley

Silicon Valley's talent wars are going younger


"Bay Area tech companies, already in a fierce fight for full-time hires, are now also battling to woo summer interns. Technology giants like Google Inc. have been expanding their summer-intern programs, while smaller tech companies are ramping up theirs in response—sometimes even luring candidates away from college.

"Dropbox Inc. plans to hire 30 engineering interns for next summer, up from nine this year, says engineering manager Rian Hunter, who adds the company wants interns to comprise one-third of its engineering team.
...

"More interns means more opportunities to bring people to the company," Mr. Hunter says, noting Dropbox is seeking people as young as college freshman.

"Interns allow you to "try before you buy," says Bump Technologies Inc. Chief Executive Dave Lieb, who plans to hire as many as 10 for next summer. He says the 30-person company pays intern engineers about $10,000 for a roughly 12-week stint, similar to what other tech start-ups say they pay.
...
"Ninety-three percent of early-stage Silicon Valley start-ups have hired or are hiring interns, according to InternMatch Inc., a website that helps college students find internships. The group surveyed companies that recently raised money from two Bay Area incubators, Y Combinator or 500 Startups.
...
""Competition for talent is so fierce," says Kleiner partner Juliet de Baubigny. She says the firm may expand the program, which is currently for juniors in college, to others, including possibly high-school students.

"Meanwhile, Facebook Inc. plans to hire 625 interns for next summer, up from 550 this year. Google hired 1,000 engineering interns this past summer, up 20% from the previous year. Yolanda Mangolini, Google's director of talent and outreach programs, says the company is still figuring out its target for 2012, based on its overall staffing plan.

"Google generally extends offers to the majority of its intern class, Ms. Mangolini says. "It is one of the primary ways we find full-time hires."

Unpaid Internships

Bookforum has a thoughtful review by Roger Hodge of
Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy by Ross Perlin

"According to Ross Perlin, the author of Intern Nation, the rise of this relatively new employment category, which is taken for granted by everyone from the antiunion governor of Wisconsin to the managers of Barack Obama’s reelection campaign, is a clear indication of the decline of labor rights in the United States.
...
"The College Employment Research Institute estimates that 75 percent of college students do at least one internship before graduation. ...nowadays, interns are everywhere, in publishing, merchandising, insurance, finance, consulting, law, engineering, and the defense industry. It seems that most large corporations pay their interns, but the number of unpaid jobs in the economy is booming. ...Based on his reporting, Perlin estimates that one to two million Americans work as interns every year, though he suspects that this number might be on the low end. Most interns are students or recent graduates, and large numbers, perhaps 50 percent overall, work for free. Worse, many actually pay tuition for the privilege of working, as a result of the common misconception on the part of both universities and employers that the bestowal of academic credit somehow nullifies the strictures of the Fair Labor Standards Act (FLSA) of 1938, which prohibits uncompensated labor except under carefully defined circumstances. Academic programs, both undergraduate and graduate, have increasingly adopted the internship as a degree requirement. Such requirements foster an economy of scarcity among the most prestigious internship programs... Highly coveted internships at places like Vogue magazine have recently been auctioned off for as much as $42,500; Perlin notes the irony that this obscene sum was raised for the benefit of the Robert F. Kennedy Center for Justice and Human Rights. Apparently, no one was troubled by the contradiction.
...
"Unpaid internships function as a class filter, ensuring that the children of the affluent and well connected are overwhelmingly represented in our elite cultural institutions. In addition to politics and journalism, the internship model predominates in the art world, book publishing, Hollywood, television, the music business, and many other industries that were traditionally prolabor. Increasingly, even public school teachers, who do not enjoy particularly high wages or status in our society, work as “student teachers” before gaining permanent positions. The basic issue, which is well articulated by Perlin, is that offering or being compelled to work for free is a paradigmatic example of an unfair labor practice; it creates a toxic race to the bottom as ever more desperate workers compete with one another to drive wages down. The internship economy demonstrates that wages, like interest rates, are capable of dropping to less than zero.

"Perlin recognizes that illegal, unpaid internships can lead to paying jobs. But to respond, as I might have before reading this vigorous and persuasive book, that working without pay for a few months can be an excellent investment is to miss the point. Although I no doubt made an economically rational decision many years ago to abandon my doctoral dissertation on Spinoza for an unpaid magazine internship, it would be far better if employment laws were strictly enforced and that valuable on-the-job training were available to those who don’t have a fellowship stipend or some other means of support. The fact that many individuals can point to significant career benefits from their investments in unpaid labor does not touch the larger argument from inequality."

Matching college students to internships

That's the goal of a web based portal called Intern Match.

Here's an announcement about them from TechCrunch: InternMatch Raises $400K To Help Students Find The Perfect Internship

"InternMatch wants to replace the career fair for college students who want internships at small and mid-size companies. On InternMatch’s platform, both internship seekers and employers can search for a match, receive skill and location based matching recommendations, and access tools to manage the application process (i.e. tips for resume creation, internship preparation, and more).

"For companies, InternMatch provides a match guarantee—if an employer doesn’t find an intern within 60 days, they get a full refund. The startup wants to set itself apart from competition by focusing on regional growth and by providing a dead simple UI where students can search and apply to positions without registration. Already, InternMatch has thousands of west coast opportunities are already available."

HT: Eric Budish

Paying for unpaid work: Market for internships, continued

When "experience" is necessary for a new job, acquiring experience is worth paying for. In an earlier post, I wrote about paying for unpaid internships in Britain, and now a very well written story by Gerry Shih in the NY Times outlines similar developments in the U.S.: Unpaid Work, but They Pay for Privilege. I quote his story at length below, with the kicker being the last paragraph quoted:)

"With paying jobs so hard to get in this weak market, a lot of college graduates would gladly settle for a nonpaying internship. But even then, they are competing with laid-off employees with far more experience.
So growing numbers of new graduates — or, more often, their parents — are paying thousands of dollars to services that help them land internships.
Call these unpaid internships that you pay for.
“It’s kind of crazy,” said David Gaston, director of the University of Kansas career center. “The demand for internships in the past 5, 10 years has opened up this huge market. At this point, all we can do is teach students to understand that they’re paying and to ask the right questions.” "
...
"Andrew’s parents used a company called the University of Dreams, the largest and most visible player in an industry that has boomed in recent years as internship experience has become a near-necessity on any competitive entry-level résumé.
The company says it saw a spike in interest this year due to the downturn, as the number of applicants surged above 9,000, 30 percent higher than in 2008. And unlike prior years, the company says, a significant number of its clients were recent graduates, rather than the usual college juniors."
...
"But many educators and students argue that the programs bridge one gulf — between those who have degrees from prestigious colleges or family connections and those who do not — only to create a new one, between the students who have parents willing and able to buy their children better job prospects and those who do not.
“You’re going to increase that divide early, on families that understand that investment process and will pay and the families that don’t,” said Anthony Antonio, a professor of education at Stanford University. “This is just ratcheting it up another notch, which is quite frightening.” "
...
"The industry dismisses the criticism.
“Universities forget that they themselves are, in essence, businesses,” said C. Mason Gates, the president of Internships.com, an online placement service. “Just because they’re doing it in a nonprofit fashion doesn’t mean that those of us doing it for profit are doing it incorrectly.”"

Networks and labor markets: Internships

The British government is promoting internships as one entryway into the labor market, and as a way to increase social mobility. But the Times of London notes: Sharp middle-class elbows are winning the intern wars

"Even the Labour party is not above calling in favours from chums. Euan Blair, son of the former prime minister, did two stints as an intern in the US Congress. He also worked as a production runner on a film set in the Houses of Parliament, and had work experience at a Paris radio station owned by Bernard Arnault, France’s richest man. "

Aside from personal connections, there are starting to be some market institutions:

"Parents with less exalted connections have little choice but to stump up cash. Work experience has become a popular prize at charity auctions: just before Christmas a week’s unpaid work at ITV Productions fetched £1,260."
"Work experience has always been tricky to come by, but at the moment demand vastly outstrips supply. Wexo, Work Experience Online, whose web address is www.wexo.co.uk, is a Facebook-style website that matches employers with people looking for work experience. It currently has 200 companies on its books – including Armani and Sony Music – and about 2,000 young people hoping to be interns. According to Robin Kennedy, the site’s co-creator, there are more applications towards more glam sectors like marketing, fashion, and entertainment. Don’t, though, think all work experience is so exciting. The company named last year as best work experience provider was Shetland Seafood Auctions, whose seven staff provide an electronic auction service at Lerwick fish market. "