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Internships are declining, especially in technology and finance
(Bloomberg) — Companies are hiring fewer interns this summer, and that has increased competition among college students and recent graduates for a crucial entry point into the job market.
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The total number of internships listed on Handshake, a job search platform for college students, fell by more than 7% between last June and May, compared to the same period the previous year. And the average number of applications each internship attracted jumped to 93, up from 53 the year before, according to Handshake analysis provided exclusively to Bloomberg.
“Honestly, I can’t remember a time when getting an internship has been so challenging since I started working in this field,” said Lesley Mitler, a career coach who has worked with college students for nearly 15 years.
The more difficult path for those seeking internships reflects companies’ decision to moderate initial hiring. This is especially true in areas like finance, consulting and technology, which have cooled dramatically amid industry-wide layoffs. Last month, Tesla Inc. made the unusual decision to rescind summer internship offers as CEO Elon Musk pushed to reduce the number of employees at the company, leaving students in the lurch weeks before the program began.
Executives are focused on efficiency and cost reduction, making internships an investment that many companies are not prepared to make at this time. “Internship programs are expensive: You have to use some of your HR staff to supervise these interns and improve their lives,” said Julia Pollak, chief economist at job site ZipRecruiter, which has seen a 14% drop in listings. of internships in the first quarter. compared to the same period last year. “You have to pay them and not necessarily get great quality work from them.”
Some companies that have scaled back internship programs are offering workshops that cost less and require less time, said Sean McGowan, director of employer relations at Carnegie Mellon University. “None of these companies can afford to move their brand completely off campus – you will lose your talent to your competitor,” he said. Educational programs – such as those offered by Morgan Stanley for second-year students or Goldman Sachs Group Inc. for all undergraduates – are a way to keep students interested in companies, even when there are fewer formal opportunities available.
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For those entering the job market, the chances of landing one of the most desirable opportunities have diminished. Goldman Sachs, for example, had a record number of applicants this year – more than 315,000 resumes for just 2,700 vacancies, an acceptance rate of less than 1%. This represents more than 260,000 applications for around 2,900 vacancies last year.
Other companies are reevaluating their internship programs after pandemic lockdowns forced them to cancel them or go fully remote. “Since then, companies have struggled to figure out what to do with interns,” Pollak said — especially since there are fewer people in the office to supervise them. “A lot of companies have given up on these programs because they can’t figure out how to do it as well.”
For students, the stakes are high: According to recent research from the Burning Glass Institute and the Strada Education Foundation, those who do not complete an internship while in school are at substantially greater risk of long-term underemployment.
Isabel Cramer, a senior at the University of Toronto, applied for more than 40 internships this spring, spending hours tailoring her resume and cover letter for each role. When an offer didn’t materialize, Cramer was disappointed — but ultimately decided to use the summer to develop his video editing skills and build his presence on TikTok. It’s an experience she hopes will help her land her ideal social media marketing job in the future. “The objective of the internship is to be more prepared for the job market,” she said. “So I thought, ‘What are some ways I can do this on my own?’”
Jade Bahng, a rising third-year student at the University of Southern California, applied to 118 internships before securing a marketing role at Korean entertainment company CJ ENM. Of these applications, only six resulted in in-person interviews. The process was stressful and, in some cases, moved slowly. Bahng said choosing an intern was not at the top of most hiring managers’ to-do lists. “A lot of these companies are busy and trying to stay lean,” she said. “But for me, getting an internship is the biggest priority for my spring semester.”
Challenges for job seekers also extend to entry-level jobs, where offers aren’t always what they seem: Tech companies like Alphabet Inc. and Meta Platforms Inc. withdrew offers last year, while consulting firms Accenture Plc. and Deloitte LLP have delayed start dates for new hires.
In this atmosphere, more students continue to interview even after landing a position, according to Carnegie Mellon’s McGowan, as companies are reneging on offers. “There was a trust that was broken over the last two years,” he added.
To stand out, career coaches say it’s more important than ever to network aggressively.
Ryan Levine, a senior at Colby College, began applying for internships last summer, submitting about 60 applications. Levine crafted each cover letter carefully and diligently engaged with employees, mostly recent graduates, at each company on LinkedIn. But by February he still hadn’t gotten a single interview – and he was starting to get nervous.
Levine reached out to someone who turned out to be very senior at the New York Life Insurance Company, who helped him get the position. “It just worked. I was very, very lucky with that,” he said. “If I didn’t get that, it would be too late – I would be struggling to find anything.”
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