Should interns pay to do work experience?

An extra pair of hands keen to learn on-the-job, for free, or an extra business cost?

According to small traders offering unpaid work experience, the reality is a bit of both.

Charging for internships

"It is a chicken and egg situation [trying to get a first job without experience]," says Jeff Poe, co-founder of finance and accounting company Platinum Professional Training.

"It happened to me in the 1990s as a new graduate and is almost providence I am now able to give something back."

Poe's registered training organisation turns over between $800,000 and $900,000 per annum.

He says it's unusual because it offers "guaranteed" internships with its $1980 Certificate IV courses, rather than charging an additional "recruitment fee" like some rivals. It currently has 12 part-time interns.

"The internship is really critical to industries where the universities have their courses but there is still a gap between academic learning and what is practically needed to do your job and accounting is one of those industries.

"Most people can finish our training in about 12 weeks so in conjunction with the work experience it takes about six months to complete.

"Longer than the six months and it becomes an employment relationship, which would mean we would have to pay them."

Poe says interns do about 15 unpaid hours a week in dedicated office space in Surry Hills in Sydney.

"Yes, there is some cost [to us], which we try to offset as part of our total running costs … about $50,000 per annum as a rough guide.

"Under the rules, we cannot give them billable hour work. If we did, we would have to pay [them] so it is more administrative, running through or practicing with past data so it is not live and cannot be viewed as billable.

"Fair Work has reviewed us and are happy. We are not exploiting anyone."

Inspiring a future generation

Natalie Chapman founded Gemaker in October 2011. The Sydney-based national company, which "helps inventors and researchers market their inventions and grow new businesses" turned over "well into the six figures" last year and offered its first work experience to a year 10 student after an approach from a local school.

Chapman says the one-week experience was mutually rewarding.

She would do it again "for the right student". It cost "about half a week of my time".

"I took her along to everything I did that week, she got to sit with her own judging sheet and listen to research pitches," Chapman says.

"There is nothing to be gained by putting a keen young person next to a photocopier. You will only turn them off an industry for life."

Asked what small businesses gain from offering unpaid work experience, Chapman says some may be considering taking on apprentices or internships and want to see who is suitable before formalising it.

"For us it was about inspiring the future generation and also she brought in new ideas too.

"It is important for local industries to do it. I don't think it is necessary for the local small shop to do it but in our industry, STEM, I believe there are huge benefits in both directions.

"I learnt a lot from our year 10 student. I could ask what social media she was using and if she had any questions regarding the pitches, which is very important when researchers seek funding from the commercial industry, and she gave us great insights.

"The disadvantages are it takes time you don't have as a busy small business so you have to make time.

"We bear that cost willingly for the experience."

Small business leads the way

A groundbreaking university research project has found the small business community provide about half of all unpaid work experiences in Australia.

Over two months in 2016, 3800 people answered questions focused on unpaid work experience. It was the first time the prevalence of unpaid work experience across all industries and workers aged 18 to 64 has been measured.

Damian Oliver, deputy director of the Centre for Management and Organisation Studies at University of Technology Sydney Business School, was one of four academics driving the research.

Counter to horror stories some businesses use work experience as free labour, the study found 71 per cent (2698) of those polled had done unpaid work experience and were either satisfied or very satisfied with their experience.

Small businesses face potentially steep penalties for breaching Fair Work Act rules on unpaid work arrangements, but that does not appear to have deterred participation, Oliver says.

"Those doing it as part of a university course did so with a large organisation, IE teachers, nurses etc, however vocational education institutes, trades and others including early childhood educators, aged care, diplomas in fashion and even some professions including marketing, planning, PR, architecture, were often completing unpaid work experience in small or even micro businesses where there may be often only a principal and an admin person.

"One of the most interesting findings was how many of the participants had undertaken unpaid work experience in the past five years in businesses with less than 20 employees.

"It was almost 50 per cent [of all unpaid work experience]."

The study found 27 per cent of those who did unpaid work experience were offered paid employment by the host on completion.

Testing out potential new hires

PR boss Dani Lombard heads a team of three based in Sydney and takes at least one work experience person each year.

The ratio of positive to negative experiences is about 85/15, she says.

"It is a slight drain on human resources initially … but I have gone on to hire interns so it definitely works from both sides," Lombard says.

"We get to test out a potential new hire and they get to prove themselves and learn the ropes.

"When it works, it works but when it doesn't, it sucks."

Under current rules, Lombard says her business must pay work experience participants unless they are doing unpaid work experience through a university degree.

"We currently have a young woman coming in one day a week and she has been here about six months and contributes so much, straight in, jumps on the phone … when she finishes her uni course she will leave with a glowing reference."

Lombard says, like most small businesses: "We can always do with an extra pair of hands.

"Small businesses really do have an awful lot to gain from offering work experience when you align with highly motivated and interested participants.

"We don't have any fat so when a competent work experience person is on board it really does help, I mean it literally boosts our workforce by 33 per cent.

"When it doesn't [work], when the person is surly, has a bad attitude, no interest or is incompetent, it can be very draining on a small business because you end up re-doing a lot of things and that costs time and money."

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