Talent Wars: Return of the Interns
Where interns move up, and where they move on
Intern retention rates are highest in accounting, financial services, and tech roles, with around 30% of interns returning to their employers in full-time positions.
Highly prestigious companies retain more than 15 percentage points more of their interns than less prestigious companies.
Companies with higher retention rates are rated highly in Compensation & Benefits and Career Opportunities by their interns relative to companies with lower retention rates.
This week, as summer internship season is coming to a close, we take an in-depth look at which interns are likely to return as full-time employees. Internships are beneficial in many ways: they provide opportunities to explore potential career paths, to gain practical experience in industry, and to network with professionals in their field. Importantly, for students, summer internships may also end with return offers for full-time employment at the company after graduation.
Which job roles have the highest intern retention rates? We define an intern as "retained" if they return to work full-time at the company of their internship. Interns in Auditor positions are most likely to return to the same company as full-time employees - this may not be surprising, as the accounting industry has a high degree of market concentration, with a small number of companies dominating the market. Technology and financial services roles also have high intern retention rates.
On the other hand, Public Relations, Writing, and Communications interns are less likely to return to the same company as full-time employees. Interestingly, Scientist and Legal roles also have low retention rates - many of these interns work at government employers such as NASA or Congress, which provide valuable experience but may be less likely to result in full-time opportunities relative to employers in the private sector.
Zooming in on large companies with the highest intern retention rates, we find that accounting, tech, and consulting firms such as Ernst & Young, KPMG, and Microsoft make up the majority of the top ten. For example, 59% of interns at Ernst & Young since 2017 have returned as full-time employees after their internship.
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What factors may contribute to higher vs. lower retention rates? Institutional prestige may come into play. For example, interns from prestigious universities may be more likely to receive return offers. However, we do not find large differences in intern retention across university prestige levels.
The prestige of the employer, on the other hand, does seem to matter. We find that the most prestigious companies also have the highest intern retention rates: companies in the top tier of prestige within each job category retain around 15 p.p. more of their interns than those with less prestige. A few mechanisms could contribute to this: prestigious companies could be hiring higher-quality interns, for example, or interns could be more willing to accept return offers from prestigious companies.
Lastly, what factors are important to interns when considering whether to accept a return offer? We look at reviews by interns of companies in the top and bottom quartiles of intern retention within each job category. Companies with the highest retention rates are rated highly by interns especially for Compensation & Benefits and Career Opportunities, relative to companies with the lowest retention rates. These higher ratings suggest that interns are most likely to return to companies they feel will provide opportunities for growth - even if that may come at the expense of their work-life balance.