Roosevelt UniversityWalter E. Heller College of Business AdministrationChicago, IllinoisAbstractThe purpose of this study is to explore some of the positive aspects that a strategically developed internship program can have on an organization. The study seeks to answer the research question, How effective is an internship program for the development and growth of an organization. The goal is to analyze the most effective ways to have a well thought out, highly developed, and thoroughly implemented internship program. Strategic internship programs can have a vast effect on an organization in many ways. According to the National Association of College Employers (NACE), more employers are implementing and offering internship programs. NACE conducted a 2015 Internship & Co-op Survey and found that more than 50 percent of interns become full-time employees at the companies they intern for. Thus, successful internship programs can be an effective tactic to the healthy development of an organization. Successfully strategic internship programs can expand an organization’s candidate pool, helping them compete for top talent that will ultimately improve and strengthen teams and departments within these organizations. Almost every organizations should have an internship program. These programs should work to be effective in developing and interns into full time employees while utilizing a candidate’s enthusiasm and knowledge of new technological, social and industry trends.Effective internships can be a competitive advantage, Highly regarded organizations like Under Armor, Google, Enterprise and Dell boast well developed and highly ranked programs. A company will benefit from an internship program if its importance is emphasized and is supported with adequate resources. Organizational leaders must make these programs a priority. Leaders must develop well structured and well thought out programs.The more resources a company is willing to put towards the internship program, the better off that organization will be in having a successful program. The better the internship program, the more competitive it will be. The more competitive the program, the stronger the applicant pool. Basically meaning, if you have a great program, you’ll attract great students and hopefully great future employees.This literature review will discuss the strategy of great internship programs and the advantages of internships on how they affect organizational change and development. Review of Literature Recruitment & Retention Strategic internship programs can have a beneficial effect on an organization in many ways. When it comes to recruitment an internship program can be one of these most underutilized yet effective tools, with the potential to save an organization time and money. Hiring a full-time worker, someone who is entry level, is a big investment. Searching for these key employees takes up a lot of of time and resources. If an employee does not work out, the process of terminating them is also costly and sometimes risky if not done properly. Internships are short term agreements and eliminating a bad hire is a simple as waiting the whole process out. Thus, when looking for talent is sounds more wise for companies to use an internship as a trial period for full-time hires. While this is not viable for every position at a company it is an important piece to recognizing good talent, making a great impression and training them up so they can fill future positions. This strategy is good for reducing the risk of a costly termination process if a candidate does not work out. In addition, due to the fact that interns do not usually qualify for benefits, the budget can be utilized more efficiently to bolster a mediocre program if explored.Hiring an intern into an entry level position that is already engaged in a company allows for many benefits. An internship program provides a company with an ongoing supply of employees who are already familiar with the culture. And the company will benefit from forgoing the recruitment period because you have access to candidates who have proven their skill, dedication, and ability to understand company dynamic.Respondents to NACE’s 2012 Internship Survey reported that after one year on the job, hires that were from the organization’s own internship/ co-op program were retained at a rate of 75.7 percent. After five years, 62.4 percent of hires coming from an employer’s program were still with the company. Just 66.5 percent of hires with no internship experience were with the organization after one year; only 48.1 percent of hires with no internship experience remained at the company after five years. “We… find that our interns move faster in our organization… “They’re filling our college roles, our front-line manager roles. So at that very entry level, we’re building the foundation for the future.”(Allen, 2013)Retention, like recruiting, serves as an importance and primary piece in any organization that manages talent. Some 73 percent of organizations revamp their onboarding to improve their employee retention. This is the time in which new hires connect with the company, so improving the correlation between their work and the organizational values will help boost employee longevity. Useful and strategic internships use their programs to court the best talent available. This not only brings talent on board but it keeps the talent around. Company BrandingHiring interns is like bringing in a team of unpaid brand evangelists. These young workers are excited, and if companies impress them, they will want to tell the world about their experience with your organization. These interns will spread the good word to their families at home, their peers in class and to the world on social media about their role and their work. This can help recruitment efforts.The processes we use to accomplish tasks at work are usually the methods that were utilized by our predecessors and passed on to us. That doesn’t mean it’s the best way to do something, it’s just the way we’ve always done it.Interns often come into jobs unafraid to question how things work or why jobs are performed a certain way, which can help bosses discover smarter ways to do those tasks. Their perspective as newbies is valuable, especially when it comes to identifying and even solving problems that go unnoticed by full-time employees.”We typically hire 100 percent of our entry-level engineering and business hires from our internship program. We’ve consistently had a high conversion rate,” says Cole. “Our culture plays a lot in that. We’re a laid-back company with strong core values. Cutting CostsInterns are an inexpensive resource. Their salaries are significantly lower than staff employees, and you aren’t obligated to pay unemployment or a severance package should you not hire them on full time. Moreover, while their wage requirements are modest, they’re among the most highly motivated members of the workforce.A recent survey, conducted jointly by the Employment Management Association and the Society for Human Resources, of 636 professionals, looked at the cost of hiring a new employee. The solution for avoiding the high numbers you might face finding and hiring a brand new employee is in an internship program.The Cost Per Hire survey done by EMA and SHRM, offer insight into the greatest expenses associated with the hiring/recruiting period. The percentages are followed by a suggestion for reducing those costs by transforming an intern into a new hire.SHRM surveys report that exempt positions are at $6,943 CpH (Cost Per Hire). Non-exempt positions are reported at $2,546 per hire. And CpH for high skills range from $9,777 to $19,219. Overall, it is reported that companies typically spend $10,000 – $50,000 in tangible costs alone to replace and retrain when a single employee leaves the company.Recruiting and hiring is a large expense for a company of any size. Converting an intern to a new hire is worth it if you are just looking at these numbers, but when reviewing all of the mutually beneficial aspects of the conversion it’s an excellent solution. Whether you start by hiring one intern and vet new candidates by reviewing their performance in this role, or develop an intern program that gives you access to multiple employees, all of whom have been given the opportunity to prove their worth, it’s an obvious solution to finding and hiring the perfect employee at a low costIncrease productivitySpeaking of additional manpower, setting up an internship program allows you to take advantage of short-term support. The extra sets of hands help your employees be more productive, prevent them from becoming overburdened by side projects, as well as free them up to accomplish more creative tasks or those where higher-level, strategic thinking or expertise is required.Mutual Reward: Win WinBeyond your own business benefits, an internship program offers advantages to the community. Your company is supporting local college programs, giving the students an opportunity to learn beyond the classroom. The interns may realize through the experience they want to stay in the community rather than move away after graduation. This helps the community retain talented college graduates. You also build partnerships in the community between your business, college graduates and the college itself.Internships are valuable tools to explore general career avenues as well as specific companies . Such arrangements can provide students with valuable work experience (both practical and for résumé enhancement)and an opportunity to line up a job before graduation. In addition to securing good work experience, students also may be able to gain academic credit and financial compensation (albeit modest in size) for internships.Internship programs are understandably most prevalent in larger companies. But small companies can realize significant benefits as well. In many respects, interns can be ideal workers for small-and mid-sized companies. They are typically hungry to gain experience, willing to perform less-desirable tasks (although a steady diet of it is apt to wilt their enthusiasm), and eager to perform well. Moreover, their fresh perspectives often challenge entrenched processes and attitudes that have outlived their usefulness. In addition, internship programs enable businesses to sort through a pool of potential employees. As the weeks pass, intern performances can be evaluated, and the pool can be culled down to good workers who are already familiar with the company.Internships provide students numerous perks: They gain experience, develop skills, make connections, strengthen their resumes, learn about a field, and assess their interest and abilities.Offering a paid internship is particularly beneficial, because it enables economically disadvantaged youth to participate. Students who have to help fund their own schooling will need a job, regardless. Providing an internship allows that job to facilitate a positive future.ConclusionInterns have much more knowledge in “conceptual strategy” than most of the entrepreneurs, which means that they can offer a strategic insight to them, at least in terms of process and tools and complement the industry and practical knowledge of the entrepreneur. For small businesses, external actors are acknowledged as important sources of knowledge for strategic management and decision-making activities (Woods & Joyce, 2003). Organizational design and implementation are fields where interns can contribute. They also can make diagnoses and suggest solutions to organizational weaknesses, help improve efficiency (Miller, 1987) and align it with the firm’s strategy (Miller & Toulouse, 1986). Managing organizational change can prove difficult for small business owners who lack the time and knowledge to implement it; interns are capable of suggesting a path for change and to pinpoint the areas of problems. According to New (1984), education and external agents are the best means to overcome resistances to change. Building relationships and connections were identified as requirements for small businesses; it also allows them to acquire knowledge and to get valuable relevant advice from outside sources (Newton, 2001). Managerial attention to flexibility, one of the requirements for small businesses (Beaver & Jennings, 2000) can be improved by the use of interns through dedicated projects or through a constant attention to change, bettering activities and processes. Interns would not make sense for all types of work. Strategic planning and proprietary workings of an organization would not typically be shared with interns according to Maeterz. However, there are some notable exceptions. For example, Snapple/ Dr. Pepper has experimented with letting MBA interns from the University of Texas takeover brand management duties for the product Yoo-Hoo. The depth and breadth of the talent pool available for internships is larger in today’s weak labor market than it used to be.