Hiring interns as part-time employees is the safest and most common option for technology companies, because it gives clear legal footing. Unpaid internships are legal only under specific conditions, and most interns don't fit the independent contractor model, so classify them carefully.
For many startup founders, agility and resourcefulness are key. You move fast, you pivot, and every team member counts. Interns are an option many technology companies overlook.
Interns bring fresh ideas and a desire to learn and contribute. They can help you fill talent gaps and find future full-time employees, and research on internship programs points to productivity benefits for the companies that run them well.
This guide covers when to hire interns, how to find and select them, and the legal rules for paid and unpaid internships.
However, the process of hiring interns for startups requires careful consideration and a well-crafted strategy. From defining your internship program’s objectives to identifying the right candidates and providing meaningful experiences, the sections below walk through intern recruitment step by step, for early-stage and established startups alike.
The Advantages and Disadvantages of Interns At A Startup
But, like any venture, hiring interns for startups presents both opportunities and challenges. Understanding both sides is crucial to creating a win-win situation for your growing company.
Advantages
First, let’s explore the potential advantages:
- Fresh perspectives: Interns bring a new lens to your problems, sparking creative solutions you might have missed.
- Cost-effective talent: Get skilled individuals on board during busy periods without breaking the bank.
- Talent pipeline: Nurture future full-time employees, building loyalty and a strong company culture.
- Employer branding: Attract talent by offering a well-run startup internship program and showcasing your commitment to development.
Disadvantages
However, it’s important to consider the potential disadvantages inherent to the startup environment:
- Time investment: Training and managing interns require time and resources that could be focused elsewhere.
- Productivity curve: It takes time for interns to ramp up and become fully productive.
- Legal compliance: Navigating intern regulations can be complex, requiring careful attention to employment laws.
- High turnover: Internship durations can be short, leading to frequent onboarding and offboarding.
When Should Startups Hire Interns?
Hiring interns for your startup isn’t just about filling immediate needs; it’s about strategic timing and maximizing the benefits for everyone involved. Here are some key moments to consider:
- Growth Stage: When your workload is exploding and you need extra hands, interns can be a cost-effective way to scale up quickly. Think website updates during a product launch, market research for a new campaign, or content creation for social media blitzes. Interns bring fresh perspectives and energy, helping you meet those growing demands without derailing your core team.
- Product Launch: Launching a new product is a crucial but resource-intensive phase. Interns can help with beta testing, gathering user feedback, and assisting with marketing and PR efforts. Their fresh perspective can help refine your product and prepare for launch.
- Talent Acquisition: Internships can work as a talent pipeline. By offering meaningful projects and mentorship, you can identify promising individuals, assess their cultural fit, and build long-term relationships that could lead to full-time roles down the line. It’s a win-win: you get to evaluate potential hires, and interns gain valuable experience and connections.
- Resource Scarcity: Maybe you’re facing a temporary budget crunch or a key team member is on leave. Interns can fill temporary gaps without breaking the bank or disrupting your team structure. They can handle administrative tasks, manage basic customer support, or even take on smaller-scale projects that free up your core team for strategic initiatives.
Remember, timing is everything. By strategically aligning your startup internship program with key moments in your startup’s growth, you can get the most out of your interns.
How to Hire Interns for Your Startup
Finding the right intern isn’t just about filling a slot; it’s about creating a win-win situation for your startup, your employees, and the intern themselves. Here’s how to attract the best talent and set everyone up for success:
1. Pre-Interview Materials
Send candidates preparatory materials, like case studies or sample tasks, to assess their skills and potential fit. This saves valuable interview time and helps you identify interns who can hit the ground running.
2. Challenge-Based Interviews
Go beyond the resume. Design practical challenges that simulate real-world tasks interns might encounter. This gives you a firsthand look at their problem-solving skills, work ethic, and ability to handle pressure, revealing talents beyond their resumes.
3. Real Work, Real Impact
Don’t relegate interns to menial tasks. Assign them impactful projects that contribute to your goals. This not only keeps them engaged and motivated but also allows them to develop valuable skills and contribute meaningfully to your success.
4. Future-Proofing Talent
Look for interns with transferable skills and potential for growth. Consider their long-term career aspirations and provide opportunities to learn new things and expand their skillset. Remember, happy interns often turn into loyal employees.
5. Transparency and Communication
Clearly explain the startup internship program, expectations, and compensation structure upfront. Provide regular feedback, mentorship, and guidance to ensure interns feel valued and supported throughout their experience.
Building a successful internship program goes beyond finding the right candidates. By investing in the process and creating a positive experience for everyone involved, you can support your startup’s growth and build a pipeline of future talent.
In the next section, we’ll explore the different types of startup internship arrangements and how to compensate startup interns, helping you choose the right fit for your startup’s needs and stay compliant.
4 Types of Internship Arrangements Your Startup Can Offer
Now that you know the ideal timing for bringing interns on board, let’s dive into the practicalities of choosing the right type of internship arrangement for your startup. Remember, there’s no one-size-fits-all approach, so consider your resources, needs, and legal compliance.
Hiring Interns As An Independent Contractor
This option might seem tempting – no employee hassles, just project-based work. However, tread carefully. Most intern relationships don’t fit the independent contractor model (think HR consultants with their own tools and clients). Interns often lack the legal standing and work autonomy of true independent contractors. Misclassification can lead to legal and financial repercussions, so consult with an attorney before proceeding.
Hiring Unpaid Interns
These can be legal under specific conditions, but they come with ethical and practical considerations. The internship is defined by its training purpose: the work must be educational for the intern, not a benefit for your company. You can’t displace regular employees or treat interns like regular workers. The rules vary by state, so confirm with counsel. Remember, unpaid internship can damage your employer brand and attract scrutiny, so weigh the benefits carefully.
Hiring Interns As Employees
This is the safest and most common option for technology companies. Hiring interns as part-time employees comes with more obligations (payroll, taxes, etc.) but provides clear legal footing and ensures interns are adequately compensated and protected. Benefits for part-time interns depend on company policy, so factor that into your decision.
Arrangement |
Interns As An Independent Contractor |
Unpaid Interns |
Interns As Part-time Employees |
Interns As Full-time Employees |
|
Legal |
✓ |
✓ |
✓ |
✓ |
|
Withholdings and employment taxes |
— |
— |
✓ |
✓ |
|
Workers Comp |
— |
— |
— |
✓ |
|
Company benefits (health benefits, vacation, sick time, paid holidays, unemployment compensation) |
— |
— |
— |
✓ |
|
Compensation |
$$ |
$ |
$$ |
$$$ |
|
Training effort |
★ |
★★★★★ |
★★★ |
★★★ |
How to Find the Best Internship Candidate for Your Startup
Now that you have your internship arrangement lined up, it’s time to attract the best and brightest. Here are some tips:
- Target the right talent pool: Utilize university partnerships, online internship platforms such as Handshake, and leverage your network for referrals.
- Showcase your company culture: Highlight your mission, values, and opportunities for learning and growth in your internship position description.
- Go beyond resumes: Conduct skills assessments and focus on cultural fit and passion for your mission.
- Offer a competitive compensation package: Consider a combination of salary, benefits, and learning opportunities.
- Engage them early on: Respond promptly to applications, provide clear interview timelines, and give candidates a glimpse into your work environment.
To learn how to manage and mentor interns, read our article with insights from Nathan Parcells: how to hire and manage interns.
Creating Internships That Work
Remember, a successful internship program isn’t just about finding the right fit – it’s about creating a mutually beneficial and impactful experience. Here are some best practices:
- Assign meaningful projects: Give interns ownership and responsibility for real-world tasks that contribute to your goals.
- Provide mentorship and guidance: Regular feedback, support, and learning opportunities are key to keeping interns engaged and motivated.
- Foster a collaborative environment: Integrate interns into the team and encourage open communication.
- Track progress and celebrate achievements: Show interns that their work matters and recognize their contributions.
- Connect them with your network: Introduce interns to other professionals in your field, broaden their horizons, and help them build their professional connections.
By investing in your internship program and creating a positive experience for everyone involved, you can use interns as a strategic resource for growth, build a pipeline of future talent, and even contribute to a more diverse and inclusive tech ecosystem.
FAQs About Hiring Interns for Startups
How do I find local interns?
There are several ways to connect with talented local interns for your startup:
- Partner with universities and colleges: Many institutions have career fairs, internship programs, and alumni networks you can tap into. Reach out to their career centers or specific departments relevant to your field.
- Utilize online platforms: Platforms such as Handshake let you post internship opportunities and filter candidates based on location, skills, and educational background.
- Leverage your local network: Tap into your own professional network, including fellow startup founders, advisors, and mentors, to see if they know any promising interns in your area.
- Get involved in the community: Participate in local tech meetups, events, and workshops to connect with potential interns face-to-face.
Are interns considered new hires?
The answer depends on the type of internship position.
- Employees: If your interns are on your payroll, they’re employees and subject to the usual employment regulations, whether they work part-time or full-time.
- Independent contractors: True independent contractors are not considered employees, but the classification can be tricky. Consult with an attorney to ensure proper legal compliance.
- Unpaid intern: Unpaid internships that meet specific legal criteria (educational benefit for intern, no displacement of regular employees, etc.) are not considered new hires. However, these arrangements can raise ethical concerns and attract scrutiny.
What can my startup gain from having interns?
Interns can offer your startup several benefits:
- Fresh perspectives and innovation: Interns bring a new lens to your problems, sparking creative solutions and injecting fresh energy into your team.
- Cost-effective talent: You can get skilled individuals on board for specific projects or during busy periods without breaking the bank.
- Talent pipeline: Build relationships with promising young talent and identify potential future full-time employees.
- Employer branding: Showcase your commitment to development and attract talent through your internship program.
- Increased productivity: Interns can help with administrative tasks, research, and project support, freeing up your core team for strategic work.
For even more details on the benefits of hiring interns, read our article on hiring interns for startups.
Is hiring interns a good idea for a startup?
Often, yes. In the right circumstances, hiring interns can be a strategic and beneficial move for your startup. Here are some ideal situations:
- Growth phase: When your workload is increasing and you need extra hands for specific projects.
- Product launch: Interns can help with beta testing, gathering user feedback, and assisting with marketing and PR efforts.
- Talent acquisition: Use internships to identify and cultivate potential future employees.
- Resource scarcity: Fill temporary gaps and handle smaller tasks without disrupting your core team.
Remember, timing is key. Consider these factors and explore the different types of internship arrangements discussed in this guide to find the right fit.
What are the rules for hiring unpaid interns and paid interns for a startup operating in the US?
Intern compensation rules are complex and vary by state. Here is a general overview for the US; confirm the current federal and state rules with an attorney or the Department of Labor before relying on it.
Unpaid internships: These are legal only under specific conditions. Under US Department of Labor guidance, the question is generally whether the intern or the company is the primary beneficiary of the arrangement. Factors include whether the internship is tied to education or training, whether the intern displaces regular employees, and whether there is any expectation of pay or a job at the end.
State rules can be stricter. California, for example, has its own requirements. Rules change, so confirm with counsel before running an unpaid internship.
Paid internships: Interns on your payroll are employees, whether part-time or full-time, and you owe payroll taxes, workers’ comp coverage, and withholdings. Access to benefits depends on company policy and the hours worked.
For an in-depth guide on intern compensation, including salary ranges and legal tips, read our guide on how to compensate startup interns.
Remember, legal compliance is crucial, so consult with an attorney if you have any doubts about your specific internship model.
Next steps
Choose an arrangement, set clear expectations, and give interns real work. Treating interns well is also an investment in your company’s future.
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Frequently asked questions
When should a startup hire interns?
During a growth phase with heavy workload, around a product launch, when you want a talent pipeline for future hires, or to fill temporary gaps from a budget crunch or leave.
Are unpaid internships legal for a startup in the US?
They can be, under specific conditions: generally the internship must primarily benefit the intern through education or training, not displace regular employees, and carry no expectation of pay or a job. State rules such as California’s can be stricter, so confirm with counsel.
Where do I find startup interns?
Partner with university career centers, post on platforms such as Handshake, and ask your network of founders, advisors and mentors. Local tech meetups and events also work.
Are interns considered new hires?
It depends on the arrangement. Interns on your payroll are treated as employees under usual employment rules, regardless of hours, true independent contractors are not employees, and qualifying unpaid interns are not considered new hires.
