College internships make up the largest segment of these types of programs, and they have become increasingly popular as a strategic method for recruiting students prior to their graduation. Managers favor internships for building pipelines of talent and like the opportunity to "audition" the students for a period of time prior to extending offers, according to Steve Pollock, president of Wet Feet, a recruitment solutions provider and research company based in San Francisco.
"More companies are de-emphasizing full-time hiring and emphasizing the internship program and the subsequent conversion rates of students to full-time hires at the end of the summer," Pollock says.
The desired conversion rate from internships to full-time hires is 50 percent, according to the National Association of Colleges and Employers, a Bethlehem, Pennsylvania-based information resource organization on the employment of the college-educated. In 2004, NACE members reported a 45 percent conversion rate and a 35 percent rate in 2005.
Wet Feet recently surveyed students who had completed internships to gather their opinions as to what constituted the best program. While the priority goal of employers is gaining new hires, students said that their No. 1 internship objective was gaining experience and knowledge, and that receiving a job offer was a lesser priority.
The survey reported that less than half of all undergraduate students had accepted their end-of-summer offers as of November. The data also showed that programs that are designed around student objectives had a better than average conversion rate.
"Real" Work Wanted
The students defined their optimal learning experience as one that provided actual tasks or work that was suitable for exempt personnel. They wanted to be exposed to the real work environment and wanted to know how their work related to the overall success of the business. Pollock says that best-practice companies have a program management team that helps to shape the projects and uses a pre-approval process for the selection of valid assignments.
Kaiser Permanente, based in Oakland, California, runs multiple internship programs. Each program is targeted toward a different group of students based upon their academic major and the company’s demographic hiring goals. The diversity program targets high-potential students early in their college careers with the assistance of Inroads, a St. Louis-based training and development firm for minority youth.
Kaiser hires the students for consecutive summers during a two- to six-year period, according to Carolyn Dallas, manager of youth programs for the Southern California region.
"Our interns receive exposure to real work and to work outside of their internship area via rotational programs, ‘lunch and learn’ sessions and job shadowing," Dallas says.
She says that the firm’s project approval process requires the supervisor to complete a profile each year describing the function and the project prior to the student commencing the work. The managers are also required to sequentially increase the complexity of the project each summer that the student returns for an internship.
Dallas says that they extend the real work experience by conducting performance reviews with each intern twice during the summer and requiring graduating interns to present a summary of their projects to a panel of company executives.
"The quality of the educational experience has been a major factor in our results," Dallas says. "We have had a 72 percent conversion rate in Southern California and an 80 percent conversion rate in Northern California from this program."
Deutsche Bank has an internal staff of 18 to support domestic internship programs for both undergraduate and MBA students. Last year the bank hired 350 U.S. interns, which was 30 percent more than the prior year, according to Kristina Peters, director and head of regional recruiting for the Americas, who is based in the firm’s U.S. headquarters in New York. Her team is measured by the number of offers that are extended at the end of every summer.
In order to bring more of a "real work" experience to students interning in areas that require licensing, Peters says that the curriculum includes simulated trading competitions in which the students are scored on their results as if they were working with real money and accounts.
IBM, headquartered in Armonk, New York, hires 1,500 to 1,800 students each year into business-unit-focused internship programs. The "Extreme Blue" program, which is composed of teams of computer science and computer engineering majors, undertakes actual research and development projects each year under the guidance of an IBM team lead.
"Those projects have actually produced new products and solutions, and several have produced patents," said Marilyn Mayo, IBM’s program manager for university relations and recruiting. She adds that the goal is to "wow" interns and that her team’s target is to achieve 70 percent of the firm’s college graduate hiring requirements through internships and co-op programs.
IBM’s program also includes a curriculum covering social responsibility and employs a webcast format with guest speakers who discuss community support and volunteerism. Deutsche Bank’s curriculum includes involving the company’s interns in a community service project such as building homes for Habitat for Humanity.
Students participating in the Wet Feet survey said that their impressions of people within the company were a critical factor in terms of their decision to accept offers following an internship. They listed both their relationships with their managers and exposure to senior management in the company as important elements of great internship programs.
"The best programs all provide mentors to the interns who coach them independently of their manager and opportunities to interface with senior management," Steve Pollock says.
IBM provides management training for those supervisors with interns. Some companies involve a blend of networking functions and social events to give the interns exposure to people within the organization on different levels.
Mayo says that there is an expression at IBM that reflects the increased competition to acquire the best interns and convert them to full time hires: "Recruit them once, but hire them twice."