Unpaid internships in the UK: How to make them beneficial for everybody

When people use the word ‘unpaid’ in relation to anything work-related, eyebrows tend to be raised. “I can’t pay my mortgage with exposure!” has been repeated so often it’s basically a meme now. But it’s not always that black and white, and the line between working and learning can be blurry. The perfect example of this is unpaid internships, where a person ‘works’ for a company for a period of time in return for experience, skills acquisition and learning opportunities in lieu of cash payment.

Sort of a stop on the way between the work experience week of secondary school, and the excitement of that first ‘grown up’ paid job, the unpaid intern is for many a kind of ‘pre-work’ phase. A route in, without a major commitment on either side but instead a mutual exchange of value.

Unpaid work is not legal, so what makes unpaid internships different? And if you want to offer them, how can you ensure they add value?

Table of Contents

• Unpaid internships done right
• Shedding the bad rep
• Unpaid internships done right
• Key takeaways

Unpaid internships done right

It’s easy to see how an unpaid internship could be used to exploit, but this shouldn’t detract from or negate the idea of legitimate internships that do offer value. The goal should first and foremost be to provide meaningful learning opportunities and valuable experience to the intern starting out in a chosen career. In the future, this can be leveraged to achieve higher earning potential. In this sense, rather than ‘free’, the time is an investment – on both sides.

To ensure all unpaid internships are aligned with this goal, UK employment law sets out the specific cases in which such arrangements are OK. This both protects interns and ensures businesses see interns for what they are and commit to creating genuinely helpful development programmes.

Generally, unpaid internships are legal when:

• They are part of a university or higher education programme and last for less than a year
• Volunteering for a charity or organisation
• Someone is ‘work-shadowing’ – observing someone working but not carrying out any work themselves

The key thing is that if they’re not going to be paid, they should be gaining in some other way – ie learning, skills-building etc – as a return on the investment of their time. If they are doing what would be classed as ‘work’, they may be considered a worker by law. In which case, they would be due at least minimum wage and any statutory benefits.

Shedding the bad rep

The legal framework for unpaid internships helps ensure they are fair and accessible, genuinely opening doors to a broad range of people. When managed well and kept short-term, internships can provide entry points into otherwise hard to access industries. This helps to increase diversity in the higher-paid and more appealing fields.

Even without payment, there are ways to remove barriers to access: partnering with organisations that can provide financial aid or cover travel expenses; allowing remote participation to remove location constraints; flexible schedules so that interns can balance paid jobs.

A well-designed internship is a huge opportunity for growth and is based on mutual benefit. To ensure the benefit is mutual, or more heavily weighted to the intern, internships should be built primarily as platforms to educate, train and upskill – with the upside of also nurturing future talent. The focus should be less on what the intern is now, but what they can grow into and how you can help them to reach their future potential.

With any luck, this future will be a shared one as you have laid the foundation for a long-term relationship based on mutual respect and exchange of value, and a shared vision.

In 2013, 100 companies were investigated by HMRC following claims of illegal use of unpaid interns; they spanned various sectors, such as fashion, media, retail and PR. Fame and prestige are no barrier to dodgy practices, either – luxury retailer Harrods was ordered to pay £1800 in back pay to an intern after misclassifying them as a ‘volunteer’ when they had been, by all accounts, working in its marketing department.

These cases clearly show there is scope to get it badly wrong, but they serve to highlight and call out bad practice in a way that should help us to get it right.

Unpaid internships done right

The legal framework is there for a reason – to enable these opportunities to be offered in a fair way, so that both businesses and interns can gain from them.

The big argument in support of unpaid internships is that they offer opportunities to gain professional skills, contacts and experience, and that this has immense value for the intern. For an unpaid internship to be considered fair, the value gained in the form of skills, experience and contacts must be enough to make up for the lost earning opportunity.

If a person is entirely unskilled and unqualified, this would likely only be minimum wage, and a few months at the right place might catapult them to a higher-paying role quicker than they would have been able to otherwise achieve. In such cases, the maths stacks up and you could consider it a fair exchange of value.

Much as you would pay for a university education that means you can command a higher entry salary, or spending your free time learning to code, committing to an unpaid internship is an investment that you would expect to be repaid in the form of future earnings potential. In this sense, it is not ‘working for free’, but considering how your time is best ‘spent’. For those who opt for an internship, they have decided that upskilling for a time is more valuable to them than working.

For the intern, it also lets them try out a field or role they’re interested in but perhaps unsure about. A chance to dip their toes in the water and see if they like it before making a big investment of time or money to train/qualify in that field. For example, accounting takes years of expensive exams before you are fully qualified. A 3-month unpaid internship could save you thousands in study and exam fees if you realise early on it’s not for you.

This is a big win for the unpaid intern. They will have likely gained more (in costs avoided, saved time and greater focus and certainty on their career goals) than they have given to the company they interned for.

For the employer, while they are not getting the skill or experience of a qualified hire, a fair and well-designed internship scheme still has a business benefit. It creates a pre-vetted pool of talent to recruit from, who you have been able to test run.

You can see them in action and assess if they’re a good fit for the company culture. Getting first dibs on future top talent is not to be sniffed at. You can also train them in ‘your’ way of thinking and working, shaping them into your ideal employees. If you treat them well and ensure you’re offering great value, you’re showing in return that you can be their ideal employer.

Key takeaways

Internships, both paid and unpaid, are valuable opportunities – for learning for interns, and recruitment for employers – and they have a key role to play in bringing new cohorts into the workforce, something the UK badly needs.  While paid internships give the employer more flexibility in how they use interns, you can still make highly effective use of unpaid internships if you stick to the government guidelines.

The upside of this is the immense value that you will be offering to the intern, standing you in good stead to be their employer of choice when they come to make a move.

The key to making unpaid internships a success is understanding what you can hope to gain from these arrangements. Clue: it’s not free labour! It’s an investment from both parties, with the return taking place in the future, not during the internship period itself. You are both investing your time in something you think will pay dividends in the long-term – for the intern, in future earnings potential; for the company, in shaping, recruiting and retaining future talent. and retainment.