Internships Give Employers Early Access to Raw Talent

July is internship season in the U.S. For college students and employers alike, internships have become a critical step on the path to full-time employment; according to the Collegiate Employment Research Institute, as many as three-quarters of students at four-year colleges in the U.S. work as interns at least once before graduation. Japanese companies in the U.S. should also be actively employing interns here, as well as introducing such programs in Japan, where internships remain much less common.

Not so long ago, a typical college student in the U.S. would be happy with any old summer job, working at a restaurant or summer camp (or, in my case, a cemetery!) as a way to pay for college expenses. No more. These days, internships have evolved into well-defined, challenging and lucrative short-term employment programs that provide a big boost toward entering the full-time work force.

While a small percentage of internships are still unpaid (especially in popular industries such as politics, entertainment, media, publishing and so on), a typical undergrad internship at a U.S. company in 2011 lasts for 10-12 weeks, involves significant responsibilities, and pays around $700 a week. The most competitive spots at top-tier firms in banking or consulting can pay $1400 a week or more.

Employers in the U.S. see their internship programs first and foremost as staff selection and development tool. A 10-week internship gives the company a chance to "test drive" the student, check for a fit with the organization, and build a strong relationship with talented full-time worker. Consequently, employers put a lot of energy into creating, managing and marketing their programs to top students.

At the end of the summer, many firms will make full-time job offers to their best interns – and measure the success of their programs by the percentage of interns who receive and accept offers. In a study I completed several years ago of leading U.S. employers, nearly two-thirds of undergrad interns received full-time offers from their employer.

U.S. students primarily see summer internships as a way to get critical work experience and enhance their value as candidates for full-time jobs. When choosing an employer, the most important factors are the company's prestige/reputation, the content of the job and the quality of their prospective colleagues. Of course, students also like the pay and perks.

Internships have started to pop up in Japan, especially among global firms, but they are more like extended seminars than test drives. Japanese companies usually call interns "kenshuusei" (trainees), and they set up their programs accordingly. Japanese internships can last as little as one day, with most being less than a month. Interns often attend lectures and presentations, and are kept far away from any meaningful work.

With Japan's heavy emphasis on college recruitment, companies willing to invest in building strong internship programs should see great benefits. At a minimum, their U.S. operations need to get in the game to avoid losing out to the local competition in the area of early talent development.

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