Last year, more than 20% of U.S. college students, roughly 5 million in all, had an internship. Of these, approximately 4 million were paid internships (average pay in the $16.65-$20 per hour range, depending on the sector), according to the internship tracker, Standout CV. Students who completed paid internships were 85% more likely to land a full-time job after graduation and to earn $15,000 per year more than peers who did not participate in paid internship programs. In many fields, including finance, accounting, and technology, short-term housing is often part of the intern experience.
Primestone works with several leading companies to help them manage short-term housing for their interns, both in the U.S. and abroad. Recently, we sat down with Kenneth Flornes, our Chief Development Officer, to discuss the trends he’s seeing in this area.
What are some of the long-term trends you’re seeing, Ken?
Internships used to be a rite of summer. Traditionally, large financial service firms, Big 4 accounting firms and white-shoe law firms would bring in hundreds of interns mainly to their corporate headquarters. In recent years, there was also a significant pick up in programs from big tech, bringing interns into San Francisco, Silicon Valley, and Austin.
Summer is still the peak period for internships, but we’re starting to see firms offer year-round internship programs. Beyond the typical summer programs, companies are offering three- or four-month internships in the fall, the winter and spring. Basically, they are making programs for smaller cohorts year-round instead of a single large class in the summertime. Year-round programs are particularly attractive for companies that are looking for international interns. It lets them recruit students located in the southern hemisphere, where their summer breaks coincide with our winters.
Cost and logistics are other reasons why we’re seeing companies move to year-round programs. Inventory in key markets like New York, for example, has been in short supply over the past few summers. Price-wise, inventory peaks in the summer. So, if you want to bring 300 interns into New York, it is going to be expensive, and availability is going to be tight. But if you distribute the volume throughout the year, it is more manageable and much more affordable.
Another change I am seeing is where the programs are located. Typically, interns would work in the global headquarters. But now, companies increasingly are locating their interns in regional centers to both involve more managers as mentors and save money. So instead of having 1,000 interns in New York City, a company might locate 500 at its New York headquarters, and then distribute 100 in each of its five other regional offices.
How do Companies assist their interns with temporary housing?
It varies by employer and program. In some cases, the companies take care of everything, and the students just move into housing, like the boarding experience back at their university. Others offer a lump sum payment and say, “go out and rent.” This can be challenging in certain markets, particularly with less generous stipends. $1,500 per month doesn’t go very far in London or San Francisco.
In the recent past, some interns would take the money and find a low-end Airbnb. But this is getting harder with the crackdown in short-term rentals in New York City and in some California markets. Also, randomly picking a room on a home-sharing website or off Craigslist can also produce some bad experiences. Security issues and the liability that is attached have been key factors in leading some companies to increase stipends and require the interns to use only use approved vendors like Primestone.
How does the economy affect internship programs?
Like jobs in general, the ubiquity of internship programs and the size of the cohort groups rise and fall with the overall economy. This past summer, for example, the number of internship openings was down slightly. But last summer most likely was just a minor pause because both employees and college students alike continue to see the value and the demand from both sides is still high. Many companies source most entry level positions through their internship programs. For example, one large accounting firm reportedly makes job offers to 90% of its interns. There is even a National Intern Day now: July 27th.
Certain sectors, like big tech, have reduced the number of interns that they are recruiting and housing. This isn’t surprising, given the layoffs that they’ve announced. The mainstays—finance, accounting, law, and consulting—are all still relatively active, but as I mentioned they may be distributing their interns across regional operations.
There are pockets of tech, like cloud storage and AI, that are expanding their internship programs. We’re working with a tech client, for example, that is bringing 20 to 30 interns into locations at five of their international cities throughout the year. The latest country we’re helping them with is Poland.
I see internship programs continuing to be a major driver of the demand for temporary housing for the foreseeable future.