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Volunteers from Just-Eat Canada work at the Yonge Street Mission in Toronto. Left to right are Stephen Chan, a former intern and now full time marketing employee; Amber Stechyshyn, sales support specialist, and Aleia Gland, a former intern who is now in Ghana.Steven Lawson

When Just-Eat Canada Inc., an online food ordering website, needed additional staff last year for its rapidly expanding operations across Canada, it launched an internship program as a screening tool for new talent.

"Some of the characteristics we look for are hard to read from a résumé, so we thought an internship program would be a great way to staff up," says Antonio da Luz, national sales director with Just-Eat Canada in Toronto. "It works as a feeder system, almost like a recruitment process for full-time positions."

Bringing on interns can be a win-win strategy for small and medium-sized businesses looking for fresh talent. As well as providing needed help at peak times, internship programs – aimed at recent post-secondary graduates or those just finishing school – tend to attract high quality candidates looking for entry into competitive fields.

But while internships are generally seen as beneficial, there's a darker side, with accusations that some companies abuse interns, seeing them as a source of free labour and giving them grunt work while shorting them on substantial hands-on experience. And a good internship program does more than provide cheap summer labour while regular employees are on vacation. Companies that provide a valuable learning experience, whether or not the stint ends in employment, can reap benefits in return.

Intern programs can pay off hugely for employers. Investing in new employees is expensive, and internships can help ensure the right cultural fit, since the employer already knows how the intern works and interacts with staff.

"When you start an intern and then promote them within your organization, the cultural fit is usually bang on," Mr. da Luz says. "They're familiar with the team and the team has openly embraced them, so they hit the ground running. That's what interns do."

Of the nine interns Just-Eat Canada brought in during the past year, five have been hired as full-time employees. Mr. da Luz says the company tries to expose interns to as many facets of the job as possible, from operations to customer service, sales and marketing,

"Whenever we start an internship, we sit them down and ask what their long-term objectives are, what they want to get out of this," he says. "Then we ask them to take responsibility for it and to chime in when there are areas that they want to work on and develop. It's a very collaborative effort."

Doing so often uncovers skills that staffers or the interns didn't know they had.

"We believe in challenging our interns with things such as idea days and brainstorming sessions with staff to talk about key business challenges," Mr. da Luz says. "Often the interns come up with great ideas and then we'll challenge them to execute that."

Whether or not to pay interns remains controversial. Perhaps a minority of companies do take unfair advantage, says Lauren Friese, founder of TalentEgg in Toronto, a job board for students and recent graduates. But she believes the majority get something great out of an internship.

Ms. Friese is also concerned that if the criticism about interns being exploited goes too far, the consequence will be that many work experiences crucial to helping young people launch their careers will be eliminated.

"An internship has to be a fair trade," says Ms. Friese, who has five (paid) summer interns at TalentEgg's Toronto headquarters. "I see it almost like an apprenticeship, like school, but way more hands-on and useful. If an employer is giving training and experience of equal value to what the intern is giving back to the organization, then a fair trade is happening whether that includes money or not. It's up to the two people."

Jenny Faucher, president of Managing Matters Inc., a Toronto-based event management and association management company, finds hiring interns works for her growing firm. She has partnered with George Brown College to provide hands-on placement in event management. Managing Matters also posts internship opportunities with universities and job boards. One of the most popular internships is as an event co-ordinator, a stint that lasts about eight to 12 weeks.

"The interns are able to try it out and assess whether this industry is for them, and we get to try them out as a potential full-time employee," says Ms. Faucher, who has hired interns as staff. "We invest a lot of time training the individuals, so they're walking away with a learning experience and some practical tools and knowledge. We have a start date and an end date so there are clear terms."

Ms. Faucher says whether an internship is paid depends on the program. If it's part of a school curriculum, it's not paid. Otherwise the pay, usually minimum wage, varies with the number of hours worked. Just-Eat Canada pays its interns an honorarium based on performance, generally between $600 to $1,000 monthly plus travel expenses.

"An internship should be a bridge between their studies and a full-time job," Mr. da Luz says. "That's why we made the business decision to afford them an honorarium based on performance. It's a bit of a motivator as well."