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Benefits of hiring graduate interns

February 2018

Post-university internships are a valuable tool for graduates and recruiters alike, giving inexperienced workers the chance to develop skills while improving employee retention rates

This is a significant time for graduate internships in the UK. Their importance to employers is increasing while graduates are turning to them to gain the work-based experience they may not have acquired at university.

Graduate Talent Pool was set up by the government in 2009 ahead of an anticipated rise in graduate unemployment following the recession. Prospects has run the service since its inception. The brief was not only to provide a graduate internship jobs board, but to promote the benefits of internships to employers, careers services and graduates.

To this end, Prospects held a series of roundtable discussions with careers advisers, recruiters and local employability stakeholders across the country, and some of their thoughts are included below.

Internships in the graduate labour market

The number of graduates in internships has held at around 2.6%, with minor fluctuations depending on the strength of the graduate labour market - as stronger labour markets have more permanent opportunities available.1

Their popularity is demonstrated by the fact that in 2017, 43.2% of students and graduates were looking for or considering an internship, a survey by Prospects found.2

There are now fewer unpaid internships (22.9% in 2014/15 compared with 25% in 2013/14, according to HESA) although these haven't been replaced by paid vacancies.

Of those employers who hadn't recruited an intern before, 97% said they would consider it

Many universities now have their own graduate internship schemes. Some are open to all UK graduates, like the University of Exeter's Graduate Business Partnership scheme, others only to their own, such as The University of Manchester's Manchester Graduate Talent scheme. One university runs a scheme that insists on exclusivity deals so that employers can only recruit interns from that university.

Careers services dedicate entire fairs and campaigns to graduate internships, while specialist internship recruitment services such as GTP, Inspiring Interns, and Enternships have also emerged.

Why graduate internships are popular

Employers understand the value of graduate internships - even those who haven't yet provided such opportunities. Of those employers who hadn't recruited an intern before, 97% said they would consider doing so in the future.3

Internships can prove to be a great way to test out a potential employee, enabling both parties to get an extended experience of each other.4 Put another way, a prospective hire may bluff a day-long interview but it's much harder to bluff for six months.

The value of internships is also shown by Institute for Student Employers (ISE) research revealing that 34% of graduate hires had previously interned for the same company.

One employer in Plymouth confirmed as much, saying that they used their internships as a 'route for progression' through the company, adding that interns gave them a perfect way to 'try before they buy'.

A graduate recruitment agency from Manchester discussed the idea that the internship could have 'replaced the probation period'. This was acknowledged by an employer in Leicester who said that they had brought this strategy into their company.

One perennial irritant for graduate recruiters is employee retention - and internships are also beneficial here.

Typically, employers lose 16% of their intake in the first two years, more than the 9% reported last year.5 However, a study in the USA showed that after five years, 39% of companies had better retention rates from their interns than their other hires.6

Graduate internships are now well established and are taking root in SMEs

The importance of a well-planned internship was stressed by one of the employers we talked to, who explained that, 'If you are not clear about your expectations of who you want and what you want them to do this can heavily impact the long-term success of the recruitment.'

Another employer emphasised the importance of using the correct language in recruitment campaigns and providing good quality information. They understood that retention starts with honesty from the beginning.

Other motivations for hiring interns included:

  • Shaping a graduate's green talent into an effective worker, which was mentioned several times, with one company saying that they liked to 'grow their own' and another praising their interns' 'flexibility' in adapting to different areas of the company. This was supported by careers advisers who reminded employers to remember graduates' 'rawness' - they have the knowledge and skills, but need to be moulded to help apply them in the workplace.
  • An intern can bring a fresh critical perspective that will look at the business in a new light. An SME in Suffolk said that their interns brought new ideas and viewpoints to the organisation, which proved a great addition to their further upskilling programme.
  • Graduate interns are generally recruited at a lower rate of pay than permanent graduate recruits. One employer in Suffolk spoke of the need to think creatively after they had received lower funding than expected. This opinion was especially prevalent among small businesses, particularly the self-employed.

Graduate internships are now well established and are taking root in small and medium-sized enterprises. They provide a credible route for graduates into permanent employment and are a useful tool for employers to encourage retention.


1 Destinations of Leavers from Higher Education (DLHE), HESA, 2012-2017. Graduates surveyed six months after graduation.
2 RINA Survey, Graduate Prospects, 2017.
3 Employer Survey 2016, Graduate Prospects/Graduate Talent Pool, 2017.
4 Internships: to pay or not to pay, Richmond T., CIPD, 2010.
5 AGR reports a decline in graduate retention as one in six drop out of graduate programmes, AGCAS, 2017.
6 Experiential Education Survey, NACE, 2009.

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