Friday, August 31, 2012

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Financial troubles

Last time I was talking about the various benefits to be gained from doing an internship. The post was extremely positive for the most part but I ended it on a more sinister note. Although it is good to put a positive spin on life and be optimistic about things, it sometimes helps to consider the worst-case scenario.

The fact of the matter is that businesses aim to make the biggest profit possible and will often use unscrupulous methods to achieve that aim. Whether it be shady accounting practices or offering people “experience” as a means of increasing staff numbers for free, we have to come to terms with the world in which we are living. As I mentioned last time, poor economic conditions and relatively high unemployment are giving businesses more power and influence over the way internships and work experience programs are handled. With the government promoting apprenticeships and internships but stopping short of clarifying the employment status of interns, companies have an ever-growing choice of people willing to work for free.

Credits : InternAware

Financial troubles
It’s a well-known fact that the stipulations of an internship vary depending on the company, the industry, how much they want/need interns and the state of the economy at the time. With the UK economy as it is right now, there are quite a few people without a job. It’s not just fresh graduates who struggle to find work due to lack of experience, but long-term employees are also being let go as companies restructure in order to survive during this tough period. Since you don’t necessarily have to be paid (depending on your circumstances and the type of things you do during the training period), taking on people through such a programme can be a good way to bolster numbers without the financial burden. That’s all well and good for the firm but for you, as an unpaid intern, it can potentially make your life a living hell for the duration of your stay at the company. Although there are some fantastic companies that do pay their interns fairly (and sometimes handsomely), they are few and far between, and it’s better to focus on the worst-case scenario anyway.

We all know that there are rich students and graduates who are supported financially by their parents or wider family and we either are those people, we know someone like that, or we know someone who knows someone like that. People like me who aren’t so lucky can often view these richer graduates as having an unfair advantage but the fact is, there’s nothing you can do about it. They just happened to be born into a richer family that you did. These richer students and graduates are probably able to take up any internship paid or unpaid, knowing that Mum and Dad will foot the bill. Rather than getting jealous and trying to emulate them, it’s better to forget about them and just accept the hand you’ve been dealt in life. If you are not one of these wealthier people (and the distribution of wealth between the rich and poor leads me to believe that you’re probably not), you have to ask yourself one important question:

Is doing this internship worth the financial trouble that I might encounter in the short, medium or long term?

Let’s say you are someone from Scotland considering an internship in the heart of London.

Have you done your homework on London?
Do you know how much it’s going to cost to live there?
Do you have enough money to survive?
If not, do you have time to get a part-time job on the weekend?
Is the company going to pay for (or at least help you look for) somewhere to stay?

credits: UKDebtLine

You can see here that the minimum wage in the UK is only around £6 for workers aged 21 an above (and it’s going to increase by 11p… how generous!) and is much lower for those under 21. Also, here is another article talking about how your pay will decrease slightly if your employer provides accommodation. If your circumstances entitle you to be paid, you will be legally entitled the minimum wage at most, so think carefully about where you are going to be financially during and after your internship. You may well be paid more than the bare minimum, but again it is much better to be brutally honest about your financial situation.

I know some people who took out small loans just to be able to afford to do an internship at that dream company. Some were promptly offered full-time jobs after proving their worth, but others were left with no job and another notch of debt on their belt (probably already bruised from student loan debt). Doing an internship should be treated as an investment. Both are volatile but both can be very profitable if chosen with a bit of thought (and a teaspoon of luck!).

Are you going to come out of this internship better off than you were before making the move? Being “better off” doesn’t necessarily refer to the company giving you a job, because the skills you learn and that extra credential on your CV may help you to get a different (if not even better) job in the long term. So if the answer is “Yes”, you’ve likely secured a great opportunity with a company that has a real interest in developing your career prospects. If the answer is, “No” then I recommend taking another look at the details of the position.

credits : timesunion
Don’t get me wrong; I’m not saying that you should only pursue paid internships. I’m not being paid during this internship but it’s a programme set up by the Department of International Economic Development at the Shizuoka Prefectural Government, so I trusted them to find a company that wouldn’t simply exploit me. There are plenty of people who land stellar jobs off the back of unpaid internships so don’t lose faith just yet. I’m simply trying to make you aware of the possible money problems you might run into during your internship, so that you can make a more informed decision and make sufficient preparations to avoid them.


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