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Hire Interns Without Taxing Your HR Resources

by Brad Johnson on May 8, 2017
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 Business man pointing the text Interns Wanted.jpeg

Creating a strong internship program is advantageous for any organization, big or small, and internships benefit both the employer and intern. That's right - internship programs aren't just for large corporations. Regardless, many employers shy away from hiring interns due to the temporary nature of their employment and the onboarding/offboarding work involved. Let’s examine why internships are important and how to more easily navigate temporary employee statuses.

Why Interns? (The Business Side)

There are several perspectives on the benefits of hiring interns. Let's start with those HR experts at the Society for Human Resource Management (SHRM). According to SHRM, employers of interns can:

  • Acquire ready access to a pool of potential hires
  • Obtain affordable labor
  • Gain a millennial’s technological expertise
  • Get a new perspective on their company and brand

Additionally, you can get paid for hiring an intern. That’s right – employers can, in certain circumstances, receive funding for hiring interns. For example, the Ohio Means Internships & Co-ops (OMIC) program grants funds to eligible Ohio businesses that provide new internships and co-operative educational experiences (co-ops) for college students. 

Why Interns? (The Intern Side)

SHRM also stresses that internship programs benefit interns. You're providing young people with a real-world view of the particular industry or job they're interested in. They also gain realistic expectations of workplace demands and rewards, and widen their network of professional contacts and references. Internships often lead to a full-time offer, which allows the intern to become acclimated to the culture of the organization while the employer has time to identify a hire's strengths and weaknesses. For employers, hiring interns as FTEs after college can cut back on recruiting and training  costs and time spent gauging the fit of a new employee.  

HR Related Perspectives to Consider

Internship programs can keep any human resources professional busy. HR must oversee the effective management of the program, including the following:

  • Handle all aspects of recruitment
  • Achieve balance between the needs of the intern and the company
  • Ensure the intern is assigned an appropriate supervisor, one who is patient, knows how to delegate tasks and thoroughly explains assignments
  • Meet regularly with the intern to ask how things are going
  • Conduct exit interviews to gain better insight about human relations within the organization and how to enhance the internship program (ultimately, internships should resemble a mentoring relationship)
  • Manage all onboarding and offboarding, also known as hiring and closing out

A Note on Recruitment

According to LinkedIn, there are many ways to recruit the best interns for your organization. Outline a clear process by providing details about the internship program and the specifics of the role. Employers should also get rid of standard interview questions and resumes by introducing questions that let the interviewee show the interviewer what they've done. To retain quality interns, employers should give them meaningful work and constantly challenge them to reveal their potential. Employers should also reward their interns in order to keep them engaged. These rewards can be small - think newsletter articles or certificates.

Back to Onboarding and Offboarding

Paperwork. More paperwork. And legal issues. SHRM advises that you thoroughly understand what constitutes a paid versus an unpaid internship, as laid out in the federal guidelines provided by the U.S. Department of Labor. These guidelines define what makes an intern an “employee,” (a paid worker) as opposed to a “trainee,” (an unpaid worker). If a court or government agency decides an intern's work qualifies them as an employee, the company could face penalties that include back pay, taxes not withheld, Social Security, unemployment benefits, interest, legal fees and any liquidated damages, defined by federal law as double the unpaid wages. An intern is only eligible to be classified as a trainee if they meet the following criteria, as defined by the Fair Labor Standards Act (FLSA):

  1. The training is similar to what would be given in a vocational school or educational instruction.
  2. The training benefits the trainees.
  3. The trainees do not displace regular employees, but work under their close observation.
  4. The employer derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded.
  5. The trainees are not necessarily entitled to a job at the conclusion of the training period.
  6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

Get Help

As seen above, temporary or seasonal employment can drain your time and resources. How can you minimize your costs while maximizing your intern program? Technology.

Online onboarding programs like EfficientHire benefit organizations of all size, and HR directors and owners are speaking out. Don Apolito, the owner of Archer's Tavern, says, "Horizon’s onboarding systems aides Archer’s in re-hiring employees, specifically college students...The online system facilitates simple updating of the already existing records of seasonal employees, saving considerable time and paperwork. The system also notifies managers on whether the employee is eligible for rehire based on the terms that they left on."

Hiring interns also requires an almost constant recruiting/hiring process. Minor League Baseball team the Kane County Cougars found, "one of the biggest areas of savings occurred in the reduction of onboarding man-hours previously spent verifying or chasing down missing or incomplete employee documents."

Working with interns can also tax your payroll and reporting processes.  Automated payroll solutions help managers save time and money. Christine Morris, Controller and Director of HR at 10 Wilmington Place found, "Frequent employee shift changes and turnover add complexities to managing 10 Wilmington's payroll processing. Horizon manages every detail of 10 Wilmington's payroll assuring payroll runs smoothly and  is always in compliance based on changing regulations. Additionally, Horizon also takes care of 401k reporting, withdrawing all necessary data and assembling it into reports that are easy to read."

Internship programs can be very beneficial for employers and interns. Don't be afraid to get the help you need in managing the complex onboarding and payroll challenges that sometimes accompanies them.

 

 

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Topics: Payroll, Onboarding, General