Compared with corporate interns, small business interns were more likely to change their minds about continuing work with the small business company after completing the internship, according to recent study results published in the Journal of Business Venturing.

Their perception of fairness and justice within the company also had a stronger effect on small business interns’ intentions to join the company, compared with corporate interns.

“Entrepreneurs are often not well prepared for the urgent need to staff their growing businesses, and they are relatively disadvantaged in competing with large companies in the talent market. Internship is a relatively safe and low-risk approach for entrepreneurs to attract and select prospective employees. But interns are not yet committed, and entrepreneurs need to understand what factors will persuade them to join,” Hao Zhao, PhD, of the Lally School of Management and Technology at the Rensselaer Polytechnic Institute, said in the study.

Positive involvement

One hundred-four small business interns and 175 corporate interns completed web surveys at pre-internship, 2 weeks into the internship and 1 week after the internship was completed. The pre-internship survey focused on what job environment the interns were seeking, whereas the second and third surveys focused on job-seeking goals and perceived justice in the company.

Study results showed that both small business and corporate interns were more likely to join a company after their internship if they experienced positive involvement during their internship. This suggests that interns react positively to opportunities to get involved and contribute regardless of the size of the business. Zhao also found that small business interns who felt organizational injustice during their internship were less likely to join the company after their internship was over.

“It is important for entrepreneurs to be unbiased and treat family members and outside new hires equally when it comes to job assignment, compensation, and performance appraisal,” Zhao wrote. “Justice is the key to attract and keep competent employees, and to sustain the organizational system beyond the horizons of the current factors toward further shareholders, future employees and future-generation family members.”

Overall, small business interns were also more likely to change their minds after working for the company compared with corporate interns, whose pre-internship job seeking intentions were predictive of their post-internship intentions to join. Zhao believes this result is supported by the view that small and large businesses attract different types of candidates.

However, some small business interns did develop a stronger intention to join the company after the internship. Zhao cited greater elasticity in their employment goals; as well, prospective applicants to small businesses are usually undecided in their careers, may have wrong expectations for the job or have been professionally or mentally underprepared to work in small business.

“Internship is a valuable and safe recruitment tool for entrepreneurs to identify prospective employees of good quality, and it provides opportunities for interns to realistically preview the job and the organization. Allowing and encouraging interns’ involvement in the firm will increase their justice perception and intention to join,” Zhao concluded.

Future studies

Zhao said future studies should measure the actual knowledge gained from the internship, and test its mediating role on interns’ job decision. Studying recruitment and motivation of senior level employees would help improve understanding of the staffing challenge in entrepreneurial firms, Zhao said.

Zhao also said it is important to examine whether the internship experience is related to interns’ intentions to establish their own businesses directly after the internship or a few years after they join the small business, which may explain the dropouts of some small business interns. — by Casey 

For more information:
Zhao H. Journal of Business Venturing. 2013;28:443-457.

Disclosure: The study was funded by the Academy of Management HR Division and SHRM Foundation Dissertation Grant.Perspective

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