More companies hiring interns

People for the American Way interns prepare information packets.

Tess Vigeland: I am what you might call a poster child for the summer internship. After my freshman year in college, the good people at Oregon Public Broadcasting agreed to let me work in their newsroom. And they put me on the air. Fast forward three years, and they hired me for my first cub reporter job a month after graduation. Suffice it to say, I believe in internships!

Fast forward another ... years and thanks in part to the Great Recession, the summer internship has become more and more important to graduates. In fact it's something like a three-month job interview.

Marketplace's Jeff Horwich reports.


Jeff Horwich: For a 2011 graduate with a major in printmaking, there aren't that many obvious job options. So Anthony Cappetta threw his name in for a graphic design internship with the OLSON ad agency in Minneapolis.

Anthony Cappetta: I did the online application. And the first call-back, was to and make something that sold myself and my creativity, only using my cell phone. So I had an assignment.

His cell phone video must have impressed, because that put him through to the next round...

Cappetta: ...where I came in and met with four different people, which was kind of surprising and kind of scary, because it was like a two-and-a-half-hour interview.

If this sounds a lot like Cappetta's applying for an actual job, that's because he might be. Companies increasingly view the summer internship as a dry run. According to a new survey of major U.S. companies, four out of every 10 new hires this year will be their own former interns.

Edwin Koc directed the survey for the National Association of Colleges and Employers.

Edwin Koc: Over 80 percent of them, this year, said that recruiting for full-time hires was the primary purpose of their internship program. Now that's the highest that it's ever been.

Koc's survey respondents are mostly large, for-profit companies. But the recession-friendly logic applies more broadly: Interns have already proven their talent, and it's cheaper and faster to bring them on-board. Koc's research also shows hiring your own interns costs less over time.

Koc: They're getting a long-term look at the student not only just in terms of performance, but the operation within the corporate culture as well. That has tended to produce people who stay with the company for a longer period of time.

Gretchen Farr: That three months is kind of a working interview, is how we look at it.

Gretchen Farr runs intern recruiting for Garmin. The maker of navigation devices flies college juniors to its Kansas City headquarters for interviews. Last Monday, 60 budding electrical and software engineers started their summer internships.

Farr: Probably our average is about 80 percent of interns that work for Garmin receive a full-time offer. And so we try to make those full-time offers to those interns before they even leave for the summer to go back to school.

The rise of the intern-to-hire phenomenon means competition is insane. Garmin's 60 interns came from a pool Farr estimates at more than a thousand. Anthony, the graphic design intern in Minneapolis, was one of 600 people chasing 10 slots. Steep odds -- but once you get that internship, the standard advice applies: Dress for success, show up on time and treat it like your first day at a real job. After all, it could be.

I'm Jeff Horwich for Marketplace Money.

About the author

Jeff Horwich is the interim host of Marketplace Morning Report and a sometime-Marketplace reporter.

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