America's Top Internships
The Competition Is Tough, but the Rewards Can Be Big

By Paula Szuchman
Staff Reporter of The Wall Street Journal

The humble summer internship is becoming one of the most sought-after prizes on college campuses.

It's no wonder: The link between summer programs and full-time jobs keeps getting stronger. Last year, major employers said 38% of their interns went on to full-time positions, up from 25% in 2001, according to a survey by the National Association of Colleges and Employers. Some companies now put intern applicants through a rigorous screening process that rivals their regular recruiting efforts. Yet students who make it through such scrutiny often find the experience can vary dramatically, with Procter & Gamble letting interns pitch ideas to the CEO and others relegating them to answering phones.

With so much at stake for college students, The Wall Street Journal wanted to find the internships that stand out on a resume. So we asked the people whose opinions matter: executives with a say in hiring at some of the nation's most prestigious employers. Surveying more than 150 companies in 10 industries, we asked which programs turn out the best prospects. We also sought advice from recruiting firms, college career-services directors and students. Finally, we canvassed all the programs that drew the most praise to find out more about the job, the perks-and whether they actually help students get a jump-start.

There's more to it than a big name. Microsoft won acclaim for giving interns the opportunity to create products destined for the market, while Apple's program was rarely mentioned when we talked to employers. Apple says its program is competitive and interns do substantive work. Some of the internships employers consider exceptional aren't in the private sector. High-tech employers frequently cited a government agency-NASA's Langley Research Center in Virginia-as producing some of the nation's finest engineers.

Clock Is Ticking

It wasn't long ago that summer internships meant a lot of make-work tasks, at best giving students some exposure to an office environment. Now they're the latest example of how quickly the career clock starts ticking for today's students. Some companies say they're practically a prerequisite for full-time employment, while college guidance counselors advise that a distinguished summer position is one of the best ways to stand out in a competitive job market.

Now the competition is beginning even earlier. Students finishing their sophomore year of college will make up about 10% of the J.P. Morgan Chase summer program after rarely being considered in years past. Procter & Gamble says it has plucked interns just after their high-school graduations.

Overall, the application process is similar at most programs. Companies typically include detailed application instructions on their Web sites, and recruiters evaluate students on a number of factors, including their choice of classes and the quality of their recommendations. Application deadlines typically start in November for some media outlets and banks, and go through the spring. Amgen, for instance, accepts resumes through April. Some don't emphasize grades, including Microsoft, which says it has no GPA cutoff. Most expect candidates to make a good impression during an interview.

Resumes and work experience also are important. In fact, it turns out, one of the best ways to get an internship is to have had a previous internship. "It leads the student into a Catch-22," says Steven Rothberg, president of CollegeRecruiter.com, a career site for students and recent graduates. "How do you get hired for one job if you haven't done a similar job elsewhere?"

At some companies, an internship is the next best thing to a guaranteed full-time job offer after graduation. Kraft Foods, where intern recruiting extends through March, says 90% of its interns will eventually get an offer to return full time-but only 10% of internship applicants made it into the program's 215 slots last year. Companies say the internship focus is partly a result of a broader campus-recruiting push and represents a chance to lock up the most promising students long before senior year.

It's cost-effective, too. In some cases, the cost of recruiting for one full-time position can be as much as $30,000 (factoring in travel, labor, marketing and background checks), while an intern can be tried out on the job and then hired permanently at a minimal cost.

Students, in turn, like the opportunity to try out potential employers before making a long-term commitment. After interning at Lockheed Martin one summer and at GM the next, Alexandra Nelson isn't yet sold on a career in mechanical engineering. This year, she's going back to GM, but trying out a different job in the structural development lab, and hoping the experience will help her decide.

Pay Varies Widely

More than half of undergraduate internships don't pay. Those that do vary widely. Kennedy Center interns receive $800 a month (working out to $5 an hour for a 40-hour week), while some big pharmaceutical and consulting companies pay up to $20 an hour. The Kennedy Center says its program is educational, and the stipend is untaxed and meant to defray housing and transportation costs.

Pay is a sensitive subject. Though most programs contacted by the Journal supplied details of training and perks, most declined to share compensation details, saying it was competitive information. They also said pay varies depending on a number of factors, including the student's year in school and the department they're assigned to.

Salaries at investment banks, accounting firms and retailers tended to be higher than most, with interns at Wal-Mart earning up to $2,880 a month, and consulting internships at Deloitte & Touche paying close to $4,000 a month. And while most government internships, including those at the White House and the State Department, are unpaid, there was one notable exception: The CIA pays between $7,000 and $11,000 for a summer.

Some internships are particularly arduous. Participants in IBM's "Extreme Blue" program spend the summer working in teams to develop a product. Last year, one team designed software to help energy companies avoid blackouts. L'Oreal interns must develop a marketing strategy for a product line, and then present their plan to the brand president at the end of the summer. Others have some popular perks, including after-work mixers with executives and subsidized housing.

Paras Shah says he valued his experience as a Procter & Gamble intern last summer, especially the day he got to share his ideas for expansion into the baby-care market with chief executive A.G. Lafley and other top executives. He also enjoyed the extracurricular activities, including a tour of the company jets and a Snoop Dogg concert. "It was the best summer I'd had in my life," says the University of Texas at Austin senior, who is returning to the company as a full-time interactive marketing manager after graduation.