MBA2303 Should You Hire Interns? + Free Ride Friday

0:09Heyo! Welcome to the$100 MBA show, business insights you can count on every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zinhome. I'm also the co-founder of Webinar Ninja, an independent software company. I started my co-founder back in 2014. And today's episode is Free Riot Friday. On Free Riot Fridays, we give away a lifetime membership to one of our programs. We're giving away access to our$100 MBA program. All you got to do is leave us a rating and review on Apple Podcasts to enter our weekly random draw to have access to our full program, helping you become a better entrepreneur.

0:46We announce this week's winner a little bit later in the episode. In today's episode, you'll learn, should you hire interns? Many entrepreneurs see internships or hiring interns as a great, low-cost way to get stuff done in their business. But like anything in business, it's not that straightforward. We'll talk about the things you need to consider before hiring an intern, and if your business is in the position to actually benefit from internships. if the interns are actually going to add value to your company, to your customers, and also if your company can add value to the intern. So let's get into it.

1:20Let's get down to business. I've always been a big believer in you get what you pay for, whether it's in business or in life. If you're going to hire somebody who's junior, who's a full-time employee, they're going to pay them a salary, you can expect them not to give you as much velocity, not as much production. The quality of their work is just not going to be as good as somebody who has a bit more experience or a senior person in that position. And you understand the trade-off. You understand you're going to pay a little less, you're going to get a little less, and you have the potential for growth in the future.

1:53Meaning you can train them, you can work with them, they can learn, and hopefully you can get into a position where they're great value because maybe they have a great attitude, they have a good work ethic, they're a good cultural fit for the business. Now, I have to mention that even with low-paying jobs, not interns, just low-paying junior entry-level jobs, these positions are okay in certain areas of your business. Administration, labor-intensive tasks, data entry, things like that. When it comes to high-skilled areas of your business, like let's say engineering, like you're building an app, or sales, or marketing, or management, I highly recommend you actually get highly qualified people.

2:32getting somebody that knows what they're doing. You're going to spend a little bit more and you're going to get somebody who's experienced, that's going to do the job well and not waste your time and money. Sometimes when you get a really skilled person in a high level position, they're able to do the work of five people. That's how good or how impactful talent matters and skill matters in critical positions. Now, in entry level positions, this is where you'd normally take a look at interns. Should I have an intern in this position? Typically, internships are where people looking to gain experience in the workforce will work for free in exchange for experience.

3:09That internship can turn into a paying job if you'd like to, if you want to groom this person and get them to work for you. And in fact, if you actually want this person to stick around, this is what I recommend because interns won't stay interns for a very long time because they need to get paid. They might do it for six months, a year max, and then they're going to look for a job that actually pays them. So this should be built into your internship program if you're looking to do this. Now, remember I said that very junior level people, they're not going to produce that much work. And you kind of expect that because you got to train them, you got to work with them.

3:40And that's why you're paying a low salary. Now, imagine what it's like with an intern. Interns are a whole different bag of chips, okay? Most interns have never worked a job before. So they don't even know the culture of work. They don't know how to be professional. They don't know what to expect in your company or to work at any company. So it's going to require time from you and your team. Even if you put an intern in a position where they're being managed by a manager, that manager's time is going to be used getting them up to speed and getting them to the point where they're able to work autonomously.

4:13This could take weeks. It could take months. This is months of work that that manager, that employee on your team is not doing their primary job, their primary work to help your business grow. This is why typically larger companies, Google, Facebook, Canva, these kinds of companies are more open to interns because they have a lot of redundancy in their team. Big companies can afford redundancy because they're making so much money because they might have three or four people doing the same job and they probably have enough work for one person to do everything, but they want redundancy just in case somebody is sick, somebody leaves the company, they hire an intern, and then one of them has got to train them, you get the point.

4:52So if you have very little slack in your business, then I do not recommend hiring an intern because it's going to take a lot of your time, attention, money to get them up to speed. And you're really investing in that person for six months so they can do the job with the hopes that maybe they'll be good enough for a paid position in the future. If you don't have the slack or the time or the people to make sure that they're groomed properly, trained properly, so they're doing the job properly, then you're putting your business at risk in a lot of ways. And it begs the question, why don't you get someone who's just got a bit of experience that is looking for an entry-level job that doesn't need so much handholding that can just get started on a salary?

5:31A low salary, but it's a salary. And they understand there's an even exchange of services here. Hey, you're going to pay me a salary. I'm going to get up to speed. I'm going to work hard and get things going. Now, I do know some entrepreneurs that really believe in interns and really believe in the cons of internships in their business. And I'll tell you why it works for them and maybe you can grab some ideas from their experiment. They do it at mass. That means they have a few people on their team. All they do, they're dedicated to hiring and training interns into entry-level jobs. So these few people that are full-time employees, they know the entry-level jobs really well, whether it's customer service or data entry or admin assistant or whatever it is.

6:10They know the job description. They know the tasks and the duties these people need to do. And they hire people to fulfill these jobs as interns and they train them full time. That's all they do. Now, why do they do this? Because the business model is actually a service based business. They actually provide administration services to other companies. So they need talent in their pipeline constantly. So if they have like five or six or seven people every single month coming into their company, being trained up to be great admin assistants or customer service agents, they can then provide those services to other customers, their customers, and make more money.

6:50So it's in their interest to do this as much as possible. And they're able to kind of get good work for reasonable pay because they have this kind of training for free. They train them for free. They'll give them work experience for six months. And then they work into an entry-level job that gets a salary. Now, my buddy that does this, it's his job to provide these services. That's how he makes money in his business. And therefore, it makes sense for him to invest in people that can provide these services. And he's built a system to bring in interns, train them up, have them work in their company.

7:22And the reason why he does it in bulk, meaning he hires five or six or seven interns at a time, is because he knows half of them, maybe even more than half of them, don't work out. They just don't cut the mustard. They don't pass their evaluations. They don't pass their assessments to be able to become a full-time employee. So they have to hire six people so they can end up with two or three. So this is a great scenario where this makes sense. This makes sense for this kind of business to have internships in their business. But if you need to hire somebody to do a job right and do it well immediately, and you don't have the slack to train them for five or six months so they can get up to speed, so they can provide a satisfactory level of service or a level of performance, then internships for you are more work than they're worth.

8:07I understand the appeal of interns. A lot of us as entrepreneurs, we're always looking for the diamond in the rough. We're always looking for like the person that people ignore or kind of passed up and I'm going to find this winner and it's going to be a great deal and I'm going to be a mentor. I'm going to show them how to be a winner and all that kind of stuff, right? But I like to look at business in terms of percentages, statistics, probability, right? And a great analogy when it comes to probability is sports. Look at all the sports teams in your favorite sports and look at the teams that spend the most money, like the Yankees.

8:40This is why they have so many championships, because they spend money and they get the best players, right? They're not trying to groom people through the draft every year. Look at basketball. Look at the Golden State Warriors. They spend more money than any other team almost every single year. And that's why they have so many championships in the last 10 years. If you just want to look at averages, the teams, the businesses, the companies that spend the money, that invest in good talent, they're the ones that win. It's not to say there's no exceptions, not to say that if you hire an intern, you're not going to find someone who's a rock star that's going to develop and become somebody amazing in your company.

9:13It could happen, but are the chances of somebody like that rolling into your business more than you hiring somebody that's highly qualified? Probably not. So if you don't have the slack and your business can't benefit from bringing in new talent constantly, like the example I gave you, then reconsider hiring interns. Thanks so much for listening to the$100 MBA show, but today's episode's not over. It's Free Ride Friday. Let's see who won this week's free ride. And the winner is The Only Real Kyle. That's the handle on Apple Podcasts. The Only Real Kyle says, very informative five stars. These episodes are very informative.

9:46Short and sweet. Thanks, Kyle, for the great review. Your mission is to email me over at omar at 100mba.net so we can hook you up with the lifetime membership to the$100 MBA program. If you want to win a free ride to one of our programs, go ahead and leave us an Apple podcast rating and review and you enter our weekly random draw we call free right Friday. It's that simple. It's our way to say thanks for showing us love on Apple podcast. Before I go, I want to leave you with this. One of the best questions you should ask yourself as you're building your business and hiring talent is ask yourself, what do successful companies do?

10:17Look at a company that you admire, companies that you want to be like, okay? What do you think they do when it comes to hiring? What do you think they do when it comes to choosing talent. Do they go cheap or do they actually find some amazing people? Success leaves clues. Follow what you see and like. For example, I run a software company. I don't have a huge team, but when I do hire, I need to find the best people because in software, the successful software companies have great people, have great engineers, have great marketers. That's the difference between one company and another. It's the team.

10:46So if I can't afford somebody great, I wait until I can't afford them. That's my mentality. That's my strategy. Look at the companies that you want to be like and follow their lead. Thanks so much for listening. I'll check you on Monday's episode. I'll see you then. Take care.