Technology companies are in a bind. Demand for software developers exploded during the pandemic as the promise of new technologies set companies on a hiring spree. Today, amid high economic uncertainty, many companies are cutting back.
That has led to a pruning of internship programs, which is unfortunate, as they’re an overlooked piece of the puzzle for companies’ hiring needs in this tight labor market.
Technology companies large and small are conducting layoffs as higher interest rates dampen demand for their products. Furthermore, they’ve gone into conservative mode, prompted by threats posed to their business model by the promise of artificial intelligence. But the paring back or zeroing out of internships may be the worst response to these headwinds.
Internship programs are often viewed as nice but not necessary — or even a burden. Yet for many companies, they are closer to a need than a want. As someone responsible for a large technology department, I see firsthand that the benefits are real. In fact, while some organizations have been halving their count of summer interns, mine has doubled it.
Five years ago, we embarked on a journey to address an imbalance in our team. For us, the decision to ramp up was based, in part, on an understanding that the experience “pyramid” of our engineers was lopsided; we had more at the senior and middle levels than those just starting out. And, while like any organization, we have filled much of that talent externally, we have also learned the value of going closer to the source. Currently, we offer positions to roughly a third of those who intern for us.
If you drill down to understand what it takes to successfully recruit talent, the benefits of a pool of interns from which to draw permanent employees are clear. Here are people you’ve worked with and tested, and vice versa. That leads to a better retention rate. And I’m not referring to “try before you buy.” It’s about building the workforce that you want, with the ability to shape talented individuals before they become weaved into the fabric of your company.
Hiring interns also isn’t just about developing your employees of the future. Our interns, mostly software engineers and data engineers, are deployed across teams responsible for some of our highest-priority deliverables. They are working on critically important projects for our senior leadership.
And these executives don’t need to be convinced of the value of the program, as they’ve seen the benefits up close. Meanwhile, the pool of interns that we’ve been lucky to have has been a lot more diverse. We’re especially excited about welcoming a growing number of women who major in STEM (science, technology, engineering, and math).
Given my experience, it’s hard to imagine scaling back our internship program. But it’s easy to see what the costs would be to an organization that does.
In addition to losing an immediate pipeline of promising future engineers, paring back an internship program sends powerful signals to the market, and of the worst sort. It can impair your company’s reputation in outsized ways, and not just among the emerging pool of talent. If your program is affiliated with universities, it can harm your relationships.
In addition, companies that rescind offers or are seen as abruptly canceling internships will likely suffer a hit that dwarfs any savings. There will be talented people who will never opt to work for you.
Of course, a good internship program requires commitment beyond a few months' salary or stipend. Companies need a vision for their program and buy-in up and down the institution.
Ours starts with an onboarding program that has each new cohort meeting for more than an hour with our C-suite and department vice presidents. It ends with presentations to senior executives, in which interns outline what they have learned and what recommendations they have. We typically hire those nearing the end of their undergraduate and graduate studies.
So, what can a company do if it sees the value of internships but needs to rein in payroll? From my experience, the best solution is the simplest: Delay the hiring of employees for a month; that cost savings can cover an intern for a summer. And who knows: Maybe the summer intern ends up being perfect for the hiring you delayed—a win-win for sure.