In bad economy, students worried about internships

"I'm glad I got in before things got bad," said Kelly Pitcher, an accounting major at Widener University who worked at SAP America with Carol Burke, a travel and service specialist.
"I'm glad I got in before things got bad," said Kelly Pitcher, an accounting major at Widener University who worked at SAP America with Carol Burke, a travel and service specialist.
Posted: December 01, 2008

Kelly Pitcher knows how lucky she was to land a prized internship at SAP America Inc. in Newtown Square last fall.

After this semester, the business-software giant is putting its internship program on hold, eliminating paid, on-the-job training for as many as 100 students a year.

"I'm glad I got in before things got bad," said Pitcher, 20, a junior accounting major at Widener University who worked in the accounts-payable department. "But I'm a little worried because I want to do another co-op. Depending on where the economy stands, I'm sure it will be harder."

As fear stalks the job world, the crumbling economy is poised to claim yet another set of innocent victims, according to college and labor experts: students seeking work experience to go along with the book smarts.

With many families facing hard times and the financial-aid budgets of colleges stretched, interest in co-ops has grown as students look for help with expenses and an edge in landing jobs after graduation. Like short-term apprentices, they apply what they've learned in class to the real world under the tutelage of experienced workers.

Nationally, participation in co-ops and internships has grown about 10 percent in the last five years, to 250,000 to 300,000 students, earning $8 to $15 per hour, said Peggy Harrier, manager of the Cooperative Education and Internship Association. More than 4,000 colleges in the United States offer some form of work program.

But as the labor market tightens, industries laid low by the financial wreckage are nipping student workers from their weakened budgets.

"We're already starting to see a loss of co-op positions," Harrier said. "We expect a roughly 15 percent decline through the end of the academic year," particularly in the areas of manufacturing, engineering and hospitality.

Others see a sliver of hope for students looking for experience in an anemic job market, which saw new claims for unemployment benefits jump this month to a 16-year high. Companies that can't afford to hire full-time workers may take on more undergraduates at a fraction of the cost.

"Students can still bring talent into their companies at a less expensive rate," said Paul Stonely, president of the National Commission for Cooperative Education.

But colleges agree on one thing: They're going to have to hustle to tap new job-rich pipelines for their students.

Drexel University, the region's co-op leader with 4,200 students a year gaining work experience, anticipates a 97 percent placement rate for the spring session, about the same as last year.

But jobs are slipping away even as the school ratchets up the hunt for new ones, with 150 fewer company postings for the next co-op session. Earlier this month, the school held an all-day conference to brainstorm ways of boosting work opportunities as the economy worsens.

"Obviously, co-op employment is connected to the general labor situation," said Peter J. Franks, executive director of the Steinbright Career Development Center at Drexel.

Rutgers University in New Brunswick is also worried about summer jobs, after a year in which its co-ops held steady.

"I think we will see a drop," said Carol Martin Rutgers, director of the cooperative education program for the School of Environmental and Biological Sciences, which offers the most employment at the university.

Interest in co-op has skyrocketed. A fall seminar on the program drew 30 students, more than double the usual number that attend, she said.

"We haven't seen rock-bottom in our programs yet," said Rutgers. "We had a couple of students in the veterinary industry that were hired and then told, 'We don't have enough work for you.' But our big employers, the pharmaceutical and food companies, tend to be recession proof."

Not so the hospitality industry, particularly in Atlantic City, where struggling hotels have frozen student hiring.

"Economically, they're all suffering," said Joy Dickerson, director of cooperative education for hospitality management at Widener, adding that one hotel tried to lay off a student before the school intervened.

A mechanical engineering student at Widener working at a sensing device company in Lancaster was told her hours were being cut because of low seasonal sales, said Craig Single, director of co-ops for the schools of engineering and business administration.

The loss of SAP, which employed seven or eight students each semester, was also a blow.

"That was kind of a shock to us. We get into a groove with our companies. We know who's going to hire and how many. When we have a big company that says they're not going to hire this term, that makes a big impact on our program. That could be 10 percent of our students," he said.

For Drexel, the cut was deeper, with about 30 students per session working at the company.

SAP spokesman Andy Kendzie said the company instituted a hiring freeze that included students last month as a "precautionary" response to market uncertainty. He said he did not know how long it would last.

Another big student employer, PricewaterhouseCoopers, which hires 125 students at its Philadelphia and Harrisburg offices annually, plans no cutbacks, said a company spokesman.

While other hiring may fluctuate, the company maintains its student workers because 70 percent of its entry-level class comes from that pool.

"It's really to build for the future," said Holly Paul, national sourcing operations leader. "We're looking to make future managers and future partners."

That's what Kelly Pitcher wants to become, but she knows that in the hypercompetitive quest for jobs, she will need all the experience she can get to leapfrog over the competition.

In just a few months at SAP, she's already learned a lot about the business world. With rumors of layoffs and relocation swirling, she said, "everyone is working to the best of their ability just to make sure they get to stay with the company."


Contact staff writer Kathy Boccella at 610-313-8123 or kboccella@phillynews.com.

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