The internship industry: why young people are now paying to work [Video]

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The study also found 13 per cent of unpaid interns had paid a fee to a broker, agent or directly to the host company – a statistic that speaks to the burgeoning internship industry that has come to encompass a murky web of recruiters, screeners, start-ups and tertiary institutions.Gan says...

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The study also found 13 per cent of unpaid interns had paid a fee to a broker, agent or directly to the host company – a statistic that speaks to the burgeoning internship industry that has come to encompass a murky web of recruiters, screeners, start-ups and tertiary institutions.

Gan says he paid his money to a firm called Premier Industry Solutions, a fledgling Melbourne-based firm which provided the résumé coaching. It also sold his name to its only client, Industry Placements Australia, a more established recruiter. IPA matched Gan to the placement at Future Squared, with which it has a long-standing relationship.

As Fairfax Media reported this week, Future Squared is a small company that hosts up to 60 interns a year – 10 at any one time. Successful applicants who go through IPA pay a $990 “admin fee” to enter the 12-week program. Future Squared said it does not charge anyone directly. The internship actually takes place at a space rented by IPA in the Dream Factory, a former woolshed turned co-working hub on the Maribyrnong river in Footscray.

IPA and Future Squared talked openly about their processes, but PIS – through IPA – declined an interview. Its sparse website contains a 12-second “demo” video that has no content, and little other information.

Jack Clayfield, a director of IPA, said his firm had a “commercial relationship” with PIS but they were separate companies. He said PIS “identified” and “screened” students who might be suitable for an internship. They could use job boards, Google or roam campuses with a clipboard, he said.

Interns Australia, an advocacy group that stands for stricter regulation and paying all interns, is aware of the growing complexity of the internship industry. Director Jack Kenchington-Evans, who is also a trade union lawyer, was sceptical of the system set up by the aforementioned firms.

“It is more than a bit rich to rock up to your first day of unpaid work and be handed an invoice for  $1000,” he said. The Fair Work Ombudsman, Natalie James, has said she is looking into the case as a result of Fairfax Media’s report.

But the companies involved make a broader point about unpaid internships: that most students already pay to do internships indirectly through their courses. Internships (or “work-integrated learning”, as is the term du jour) have become pervasive in Australian university degrees. A unit requiring an internship typically costs students the same as any other teaching unit in their course, somewhere between $800 and $2000. That means they are effectively paying to work.

Belinda Robinson, chair of the peak body Universities Australia, said the ubiquity of internships was “quite a deliberate strategy”. She has been working with the Australian Industry Group on a WIL strategy to increase the number of placements in non-vocational areas, such as marketing and accounting.  The industry bodies which accredit university courses are also hot to trot on rolling out more internships.

“Ideally, no student would leave a university without having a work placement,” Ms Robinson said. “The benefits of work placement are enormous. We know that from the research.”

Last year, 34,000 students at Sydney University alone enrolled in units requiring an internship. Australia’s oldest university has even developed its own “interdisciplinary” internship unit, piloted to 1000 students in 2018, in which they work on real-world problems for government, corporate or community organisations.

Deputy vice-chancellor Pip Pattison conceded there had been problems with internships, such as the under-utilisation of interns, who felt they weren’t getting much out of the placement. The advantage of the new interdisciplinary project was “every student deals with a significant challenge – and they’re definitely not photocopying or making tea”, she said. And students get to retain the rights to their intellectual property if their ideas are implemented in the real world.

Professor Pattison said universities were justified in charging students for internship units because there were “substantial costs” in liaising and building relationships with employers. In some cases, an internship unit might even be more expensive for a university than a standard teaching unit, she said.

“There’s still the value for the student there. The distribution might be a little different,” she said.

Interns Australia looks more favourably on university-linked internships but is still concerned about a lack of oversight. And the group is alarmed about the potential for universities to start outsourcing the process to third parties such as Industry Placements Australia.

“It’s less urgently unfair because of the social security payments that uni students can get after they’re 21,” Mr Kenchington-Evans said. “But … the absence of regulations means that unis are in a race to the bottom to just deliver on-the-job training.”

IPA said it had contracts with eight tertiary education providers, including vocational colleges, but would not say which ones. Sydney University said it handled all its internship placements in-house, as did Jason Gan’s alma mater, Deakin.

Mr Clayfield said he was actively lobbying universities to include more internship placements in their courses, and to work with IPA to do so. He expressed some of the same concerns about unpaid work that many students do – but in his view, it was his firm that was “actively trying to improve the whole sector”.

“Students are paying for unpaid placements as part of their university degree. Because it’s built into the course, no one asks any questions,” Mr Clayfield said. “It’s really the tertiary education sector that’s promoting – and industry that’s allowing – a lot of these education courses to have very long unpaid placements as part of their course.”

Whether IPA and Future Squared are really the white knights of the sector will be investigated by the Fair Work Ombudsman. But for Gan, two weeks into his internship at the Dream Factory, it’s a case of “so far, so good”.

“I’ve met some like-minded people who are in the same situation, who are struggling to get a job, who need some kind of industry experience,” he says.

“The first thing that came to mind when I had to pay for the job was: am I being exploited? So far it has not been any sort of that kind of stuff.”

Michael Koziol

Michael Koziol is the immigration and legal affairs reporter for the Sydney Morning Herald and The Age, based in Parliament House

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