Settling on compensation and benefits for interns is often difficult for host companies. On one hand, interns are entry-level employees who require a great deal of training. On the other hand, interns still incur living expenses, and companies need to offer some compensation to attract the best talent.
Negotiating an Offer: the Intern’s Perspective
As you develop your compensation and benefits packages for interns, you should consider the intern’s expectations and how to address them.
Even before an intern starts their international internship, they face a lot of expenses. Before earning any pay, these interns end up paying out of pocket for:
- Visa and passport fees: For applicants with internships in the U.S., interns will need to pay the U.S. State Department’s J-1 visa application fee and U.S. Immigration and Customs Enforcement’s SEVIS registration fee. If they do not have a passport, the intern must also pay for one from their home country.
- Travel: Unless your intern is local, the intern will need to pay for airfare to your location.
- Housing: An intern will need to lease an apartment or house. And, if the internship is shorter, rent for a short-term lease could be substantial.
- Health insurance: Interns must have health insurance to receive a J-1 visa. Many international interns come from countries where health insurance is administered by the government. The costs associated with buying private insurance in the U.S. can be very high or something that the intern is unaccustomed to.
- Living expenses: The intern will require essentials while in the U.S., including transportation and food.
When you receive an internship salary negotiation email from an intern, the intern will have those out-of-pocket costs in mind. If the intern cannot negotiate a package large enough to cover those expenses, they might look elsewhere for support or choose to forego your internship entirely.
Some Considerations in Deciding How to Negotiate an Internship Offer
On the other hand, you have some legitimate concerns. First and foremost, you need to decide whether to negotiate at all. Specifically, when you send an offer, you could make clear that the offer is fixed for all interns and that your company has a policy of not negotiating offers. This approach has a few benefits:
- Eliminates negotiation: Many businesses prefer not to start off a relationship on the wrong foot. A protracted and adversarial negotiation might not be the best way to start an internship.
- Costs vs. benefits: For a low-paid intern, spending time and effort to negotiate an offer might not bring any commensurate benefits.
- Eliminate intern rivalry: If you have more than one intern, negotiating different packages with each one could create rivalry and negative feelings for your team.
- Cost containment: Although internship packages might not break the bank, your business also has limited resources to spend.
If you do not choose to offer interns fixed packages, a few additional considerations for negotiating salary after an internship offer include:
When evaluating how to negotiate salary by email, remember to consider the entire package. For example, an unpaid internship that includes some cost-reimbursements for travel expenses, visa fees, and coverage under your company’s health insurance policy might be sufficient for some interns.
Thus, if you receive an email asking for a stipend for an unpaid internship, a one-time stipend or reimbursement of expenses might be a good compromise rather than paying a salary.
Location can have a large influence on the costs an intern might incur. For example, the costs of living for an internship in Silicon Valley will be very different than the costs of living for an internship in Denver. If your business has multiple locations, you might want to locate your internship program in an area with a lower cost of living. This will make it easier for you to sell your compensation package.
The intern’s current location might also prompt them to search for how to ask for compensation for an internship. An intern from a city with a high cost of living might not be aware of how high living expenses are in your company’s location. For example, an intern from London might be surprised by how much lower the cost of living is in many U.S. cities. Providing this comparison might make the negotiation proceed more smoothly.
Although you should not place too much weight on your competitors’ internship packages, being aware of what they offer can help you develop a fair compensation package. In other words, you will need to offer a competitive package, keeping in mind other factors like location and other benefits.
One situation you need to be mindful of, however, is an intern who uses competing offers to play you off your competitors. While there is nothing wrong with this negotiation strategy, you should carefully consider whether to bid against your competitor and whether doing so will result in overpaying the intern.
Some of the intern’s expectations were discussed above, but you should also keep your expectations in mind while negotiating an internship offer.
Your business will spend time and effort training interns. This might lower the productivity of some of your key employees while they train interns instead of working. Since interns usually have entry-level skills, you should not expect interns to be highly productive either. As you craft your compensation package, you should take into account that interns may operate at a loss for your business, so any compensation package comes out of your business’s pocket.
If you represent a high-profile company, name recognition might be sufficient to secure the interns you want. Often, interns are motivated by intangibles like company culture. However, if your business is not well known, you might lose interns to better-known companies, even if the compensation packages are comparable.
As a result, you might need to sweeten your offers to access top talent if your company has a lower profile. Similarly, you might have more flexibility to make below-market offers if your company is the one everyone wants to work for.
This is especially true for U.S. technology companies. Internship programs with high-profile tech companies are very competitive. As a result, remuneration may be low because top talent is drawn to them by the mere prestige of having the company’s name on the intern’s resume.
How to Negotiate an Internship Offer Smoothly
Although some see a salary negotiation as unseemly, you should approach an email from an intern asking to negotiate an internship offer as an opportunity. If you sell your company and the benefits you can provide to the intern, you give the intern a better idea of what to expect from the internship. If the intern accepts another offer, you then know that the intern might not have been a good match for your company.
Contact us for more ideas about how to negotiate an internship offer.