Unpaid Work: What are the Pitfalls and How Can It Damage Your Company’s Reputation?icreatives blogger
Unpaid work has an understandable appeal for creatives and the companies that hire them. Businesses naturally love to have people without needing to pay them and for many new or soon-to-be graduates with no prior professional experience, unpaid positions can offer the opportunity to test out a job or get some initial exposure to the workplace.
Too many companies view interns or other unpaid positions as free versions of entry-level paid jobs. Not only could that put your company in significant legal trouble, but it will also damage your employer brand. Some businesses rely on perks like drink machines or the occasional free meal to boost their employee retention rate, but that won’t undo the damage caused by a score of workers who remember your company as the one that doesn’t pay.
That’s not to say that there is no place for unpaid positions in the workplace today, but there needs to be a reckoning with the idea and how best to implement it. Studying the logic behind unpaid work and examining how accurate perceptions are about this tactic can help understand how a business might be able to more effectively manage and use unpaid interns.
If a company is going to implement an intern or other unpaid work program, or even just take on a few on a case-by-case basis, complying with the local and federal regulations is the fastest and easiest way to make sure unpaid work won’t recoil on the company.
There are many ways to use unpaid jobs as part of successful employee retention strategies and increase employee retention rates. It can also position the company well to have a wider network of connections to use for open positions in the future. Finally, for all those benefits that unpaid work was rumored to bring, you can use a creative staffing agency to help fill entry-level positions and insource or promote from within to create a more appealing workplace culture.
What is Unpaid Work?
When we talk about unpaid work in this context, we’re talking about internships, volunteer positions, or students in a work experience program from a school or university. Generally, these are people with little to no relevant work experience in the creative industry of their choice who want to get their foot in the door. Thinking about it in theory, it would make sense that they would be placed at the bottom of the office hierarchy. Unfortunately, in reality, they are frequently used to cover paid jobs when regular employees take a longer leave of absence.
From the perspective of the creatives, the appeal of unpaid work is getting into their chosen field, building professional contacts, and hopefully securing permanent, full-time paid work as a result. It’s hard to say for sure how often any of these things come to fruition.
Why Would Anyone Work for Free?
Once you have a paid job, working for free sounds nonsensical. It depends on the individual, but in the creative field, it’s become almost common knowledge that creatives will have to do some work for free at some time. Many researchers cite the social capital theory as a driving force behind creatives’ willingness to do unpaid work. The basic gist of this theory is that people have to acquire some degree of social capital to gain employment. Social capital is a connection with people, in this case, professionals and companies who will hire them.
That old saying “it’s not what you know, it’s who you know” is a good shorthand way to describe this. A strong professional network is the best way to get work fast when you need it. For companies who want to take advantage of the people out there who are willing to work for free, always remember that you get what you pay for. These candidates are more likely to be able to support themselves without a wage, which means you aren’t going to get the best candidates. You’re just going to get the ones who already have money.
Characteristics of Unpaid Work
There are differing definitions of what an unpaid position is and what separates it from a paid job depending on location. The U.S. Department of Labor has published a short list of qualifications required for a company to feasibly claim a position is different from a regular employee and therefore does not require remuneration as a paid job does under the Fair Labor Standards Act. Here are their standards in layman’s terms:
- The intern and the employer must clearly and mutually understand and acknowledge that there is no promise or expectation of compensation whatsoever.
- Internships should mirror the kind of training given in an educational atmosphere, which includes hands-on training given at clinics and universities.
- Ideally, the internship should be tied to an educational institution in some way, usually through integrated coursework or academic credit.
- The program should accommodate the academic calendar of the intern, where applicable.
- The duration of the internship lasts only as long as it has some educational value to the intern.
- Work done by full-time employees doing a paid job should be complemented by unpaid internships rather than displaced by them, i.e. unpaid interns shouldn’t be doing the work of regular employees.
- The employer and intern must clearly and mutually understand and acknowledge that there is no guarantee or promise of a paid job as the result of the internship.
These rules are applied on a case-by-case basis but they are illustrative of the kinds of problems companies can face when they try to implement unpaid positions.
How Companies Can Take Advantage of Unpaid Work
As you can see from the DOL’s list, there are a few things you absolutely should not do with regard to unpaid positions. Letting unpaid workers take over duties that normally belong to paid workers is the fastest way to alienate paid staff, undermine employee retention strategies, and get the company on the wrong side of government regulations.
The first thing a company should do is set up an interning program with clearly defined goals, time limits, and duties. These unpaid workers should be experiencing the many facets of working in a creative industry, not answering phones or getting coffee.
One of the smartest things your company can do is limit these unpaid positions to about two weeks unless it’s linked to coursework at a university or other institution. If a candidate just wants some temp work over a break, show them around and let them assist full-time employees and see what kind of work they do.
If you’re a popular place for students to find informative and satisfying unpaid internships while they’re in school, it’s virtually guaranteed that they’ll come to you searching for full-time employment after graduation.
5 Dangerous Pitfalls of Unpaid Work
Companies are frequently wearing blinders when it comes to the adverse effects of taking on unpaid workers. Likely due to the simple appeal of free labor, unpaid workers are improperly used and cause a domino effect, potentially ruining everything from the atmosphere of the office to employee retention strategies to the business’ employment brand. Look out for these issues:
1- Negatively Impacting Existing Employees
When there are inexperienced and unpaid interns working on comparable things or taking on serious tasks within a company, the existing workers will increasingly feel like management is cheap and their employment there is only contingent on money. Creatives especially, but everyone generally, wants to feel that they are having a bigger impact and doing more important work.
Plus, when there are many people working for free, work can feel like a race to the bottom. Workers want to be rewarded for their work and the existence of people not getting paid can give the impression that someone is there who will do their work for free, or that there is a bidding war being waged between themselves and the unpaid workers. Undercutting existing employees with unpaid workers is one of the worst employee retention strategies there is.
2- Cutting Off Education Streams and Teamwork
Because the relationship between full-time employees and unpaid workers is so strained, the people who should be educating the inexperienced are less likely to do so. Many companies offer no incentives for helping show these new workers the ropes and if there’s a conception that they are in competition with one another, current employees aren’t going to want to show the unpaid workers how to be even better at their jobs.
As much as an unpaid work program can be mutually beneficial to companies and students alike, they can also disrupt or destroy teamwork, even amongst full-time employees, by making the workplace culture feel overly cutthroat. There’s no reason to stymie teamwork and collaboration just to get an entry-level warm body for free.
3- Legal Ramifications
Not paying employees is a surefire way to get in some serious legal trouble fast. Failure to situate your unpaid employees within a regulated and clearly defined intern program can lead to discrepancies, class action lawsuits, and fines. These are sure to take up tons of time that could be spent on the main business of the company or on cultivating a more positive internal atmosphere.
There might be exposure for wrongful hiring or firing practices as well. If employees with paid jobs are being let go in favor of unpaid workers, they may lawyer up from wrongful termination. Implementing unpaid workers to do anything other than a couple weeks of education or a program in tandem with a university is fraught with potential legal danger for the company.
4- Lower Employee Retention
If existing employees feel they are constantly being undercut by unpaid workers and aren’t sufficiently valued by management, they’re going to start looking for more satisfying employment elsewhere. Even worse, if they feel slighted by the company they could leave with little or no warning once they find somewhere else to go. A recommendation is only as good as the person who gives it, so if a company doesn’t seem to be upstanding or trustworthy, many people will not be concerned about getting a nice recommendation.
Employees leave for many reasons but hiring on unpaid workers without setting out a definite plan for them, and especially letting them take on the work of full-time employees, is going to backfire in two ways. For one, it will encourage workers to leave, and secondly, it’s going to tarnish your employment brand. You might also be jading new workers who were initially interested in the creative field and will change career paths.
5- Less Long-Term Thinking
Companies who use unpaid workers to solve sudden shortfalls in their office hierarchies are shooting themselves in the foot, really. Rather than working toward a permanent solution, an inexperienced person is brought in to cover the difference. Using a stopgap intern is not only unfair to the intern, who should really be seeing a more generalized picture of the industry and position and not learning specifics about duties at your company, but it will also prevent your business from finding a better solution.
Your company might actually have the need for a whole new position, which could be filled by one competent professional who would have the best interests of the company at heart and stick around for the long-haul. For too many companies, though, they have spread these work duties around existing employees, both paid and unpaid, and that’s not a good way to get the job done right.
Building a Positive Employer Brand with Unpaid Work
An employer brand is the organizational identity of a company as seen and experienced by employees within the company and former or aspiring employees outside the company. There are tons of ways businesses benefit from good employer branding. Maintaining a good brand increases the talent pool, generates attention from passive candidates, increases the employee retention rate, shortens the amount of time needed to fill a position, generates employee referrals, and reduces the cost-per-hire ratio of candidates.
Using unpaid workers improperly can destroy an employer brand, but implementing a successful program along with employee retention strategies can help bolster favorable opinions and boost the employer brand. Employees with paid jobs always dislike being charged with babysitting unpaid workers, but if full-time workers feel they’re teaching and making a positive impact, it becomes an altruistic move by the company instead of busywork.
Most companies could do with an injection of youthful energy, especially at higher levels. Bringing in newbies and showing them a few things is edifying and they’ll leave with an overwhelmingly positive view of the company, as well as offering paid employees a nice break during the day. Maybe it’s not realistic to bring in and educate unpaid workers every day of the week, but a few times a month might be a nice thing for employees to look forward to, especially if they’re built into the program. Just remember not to force them to do it, as education isn’t appealing to everyone.
Using a Creative Staffing Agency Instead of Unpaid Work
By now, the dangers of using unpaid work incorrectly should be clear. One way you can avoid damaging the employer brand and stay out of legal trouble is to use a creative staffing agency to fill gaps in positions rather than trying to make unpaid workers take over the duties.
Just like a strong employer brand can save time and money in the hiring process, using a creative staffing agency with a long history of successful talent placement will save money and effort and direct the best talent to your company. At icreatives, we’ve been matching top creative talent with companies for long enough to have a consistent referral stream. Our specialization in creative talent means we know how to vet creatives whether they’re videographers or designers.
Companies can use icreatives to fill part-time, full-time, or contract positions, which will prevent unpaid interns or volunteers from taking over those duties and getting the company into trouble. Additionally, the existing employees will appreciate having coworkers that are experienced and skilled in their field to collaborate with on work projects.
Filling entry-level positions with icreatives will also allow your company to promote from within, which means employees will see the company as a long-term career and not a temporary job. There’s no better way to improve your employee retention rate and employer brand simultaneously.
Unpaid labor might sound like the best option in terms of overhead and profit-boosting, but it can lead to many internal and legal problems for businesses who only see it as a cheap solution to staffing issues. Undercutting paid staff with inexperienced workers who are willing to work for free will make them feel undervalued and will likely demolish the employee retention rate.
On the other hand, having an education program or a work experience can boost your employer brand, create positive connections with people just as they’re entering the workforce, and create a deeper bond between the full-time employees and the company.
Using a creative staffing firm is the simplest way to save costs on bringing in new employees at the ground level and promoting more long-term employees from within. That’s the best way to increase the employee retention rate and it will benefit the employer brand in ways that almost nothing else can do.
To see how much easier it is to boost your company’s appeal with a creative staffing agency, contact icreatives today!