The HR Dilemma of Unpaid Internship Culture

It’s a topic that polarises students, employees and employers alike; are unpaid internships ethical? Is the concept flawed? Do they promote equal opportunity? Can they negatively impact the mental wellbeing of university students? This blog post will dissect the opportunities and challenges of unpaid internship culture, hearing from the real-life experiences of university graduates. 

The job market is more competitive than ever, as the number of university graduates currently surpass the number of available entry-level positions.  As a result, students are doing anything they can to make themselves more employable, and equip themselves with industry experience and skills. Universities are also feeling the pressure to pump out career-ready graduates, encouraging students to undertake voluntary internships alongside their studies. 

Employers hold the power. They are able to set the standards for graduates, which has led to internships being considered the ‘new entry-level role’. This particularly rings true to students completing degrees such as Business, Commerce, Communications, PR/Advertising and Design, as there are no standardised ‘industry placements’ compulsory for every student. In order for these students to stand out to employers, they must source and complete an internship as an ‘elective’ alongside multiple other subjects, or for no university credit at all. 


Let’s Start with the Positives!


Benefits for students:

There’s no denying that internships are highly beneficial in kick-starting a student’s career. I could write an entire blog post just covering the valuable lessons and skills that internships have taught me – and maybe I will! 

Internships allow students to utilise their university knowledge in a real-world setting, providing them with experience to be leveraged in their future career. Some of the primary advantages include:

– The internship can be used on the student’s resume to showcase work-experience to future employers.

– Students can form industry connections and professional networks. These relationships can be sources of career advice or opportunities in the future.

– If a company is in a position to hire a new employee, and is impressed by an intern’s potential, the student may be offered a permanent position.

– The internship may provide clarity to students regarding where their passions lie, helping them to navigate their career path.

Benefits for employers:

Employers love unpaid internships – why wouldn’t they? It’s the most cost-effective recruitment strategy; they have access to eager and intelligent students, with no labour costs. Along with this, other major advantages include:

– Employers can use an intern as a ‘test run’ to determine whether there is enough work in the company to hire a new employee.

– Employers are able to screen interns to determine whether they would be a valuable asset to the company. 

– The internship eliminates training-costs. If the student is hired after the internship, they’re already settled in and know the ropes of the company.

– Provides lower-seniority employees with an opportunity to practice training and leadership skills.

– Interns offer a fresh energy to the company, with their new ideas, enthusiasm and positive attitude.


What’s the issue here?

Internships demand a lot more than the stereotypical ‘grabbing coffees for the team and the bosses dry cleaning’ that you see in the movies. In many cases, interns are expected to complete challenging tasks, with tight deadlines and an exceptional quality of work. 

The problem lies with the fact that with added responsibility, usually comes added reward. As the cost of living rises and students are more time-poor than ever, should they deserve some level of financial compensation?

What does the law say?

According to the Australian Fair Work Act 2009, an unpaid work is lawful if:

  1. They’re a student completing a vocational placement.
  2. There’s no employment relationship (meaning the company does not receive significant benefit for the work completed by the intern).

So legally, if an internship does not go towards university credit:

– The intern must not do ‘productive work’.

– The main benefit of the arrangement should be to the person doing the placement.

– It must be clear that the person is receiving a meaningful learning experience, training or skill development.


As you can imagine, loopholes can be found in this legislation. Even if a student suspects their host-company is bending the rules, they are unlikely to report them. After all, there is a lot riding on the internship.

Now, let’s shed some light on some of the inherent challenges that come with unpaid internship culture.


Challenge #1: They don’t promote equal opportunity

Let’s start with the greatest challenge that unpaid internships present. They are draining on most student’s pockets, but especially those who are financially independent or come from low-to-medium socioeconomic backgrounds. 

Let’s elaborate:

Socioeconomic disparity is exacerbated by unpaid internship culture. Unpaid internship culture caters to financially-privileged students, who have the luxury to work without pay for extended periods of time. For students who don’t come from affluent backgrounds, working for free can not even be in the realm of possibility, especially during these challenging economic times. 

When students have financial obligations such as rent and bills, they may not have the option to cut down on paid work to complete an internship. Therefore, they are deprived of the opportunity to keep up with their peers, due to circumstances out of their control. This cycle directly fuels economic disparity in the work-force, right from the earliest stage.

Jack*, a twenty-two-year-old commerce graduate from Drummoyne, shared the struggles he faced when attempting to secure an entry-level position without completing an internship. 

As someone who doesn’t receive financial support from his parents, Jack had “absolutely no option” to complete an unpaid internship. When he attempted to find paid internship opportunities, he found that they were:

a) highly competitive, and

b) few and far between.

Despite his efforts, he was unable to find a paid-internship. He graduated this year, and began applying to entry-level jobs. Although he had been working full-time as a retail store-manager whilst completing a degree (which if you ask me, is extremely impressive), Jack’s ‘inadequate experience’ hindered him from securing a graduate role. The leadership, time-management and people skills Jack acquired in his manager position have “not helped (him) progress into a corporate role”. 


Challenge #2: Interns may lack motivation

We’d all like to say that intrinsic motivations are enough to keep us inspired. Don’t get me wrong; working in a professional environment and learning new skills is exciting and fulfilling to a certain point. When the introductions are over and the hard work sets in, the ‘super-eager’ attitude slowly dwindles. Interns are putting in the work; arriving at the office early and staying back late. When they look around and realise that everyone else is getting paid, while they can’t even afford to buy lunch, it can cause them to feel undervalued and unmotivated.

I spoke to twenty-one-year-old design graduate Olivia* from McMahons Point, who is currently undertaking an unpaid internship at a popular fashion retailer. As a customer of the brand, Olivia was ecstatic when she secured the position, despite knowing that she is fully-qualified and probably should be getting paid. After interning there for a few weeks, she started feeling disheartened. Olivia noticed that “they have a constant rotation of unpaid interns who are completing legitimate work, and they clearly have no intention of hiring a paid employee”. She feels exploited, and as a result, unmotivated. Not to mention, it’s frankly illegal


Challenge #3: Interns could become overworked and overwhelmed

When discussing this topic with my colleague and  MyRecruitment+ Marketing Coordinator Cassie, she revealed that feeling overwhelmed was the greatest challenge when she completed an unpaid internship.  She struggled to “juggle all other aspects of (her) life”, between family commitments, her two paid part time jobs, and of course, studying. She interned for 20 hours per-week for almost four-months, which she noted was a “good experience”, but resulted in her being time poor in other areas of her life, as there were no leeways to accommodate her busy schedule.

This is a relatable struggle for many interns. 

The importance of a healthy work-life balance has been a major HR trend in recent years. Being overworked can lead to poor mental health, heightened stress, feelings of isolation, physical illness, and weaken productivity and quality of work. Especially in the current climate of COVID19, students need to be adequately supported when their plate starts to fill up. When an unpaid internship becomes inflexible or overbearing, it is extremely damaging to the student’s wellbeing 


What is the solution? 

Unless new legislation is put in place, it’s unlikely that anything will change. I’m not overly informed in government policies, but I’ll share my opinion regardless! How about Fair Work implements a revised minimum-wage to replace lawful unpaid work? In circumstances where a university student is completing compulsory or voluntary work-experience on a short-term basis, companies would have to pay interns, but at a lower, more affordable rate than the typical award. 

Another potential solution would be to make university-facilitated internships a compulsory element to every degree. This is already the case in some faculties such as education, medicine and nursing, where universities guarantee students industry placements. The difference would be that everyone is on an even playing field, improving equal opportunity and providing students with the support they need. 


This dilemma is highly complex – we’ve only just scratched the surface! Do you think unpaid internships are completely acceptable? Or do you think measures should be put in place to further regulate them?


* Fictitious names were used for privacy reasons