Stipend: How It Helps, Types, Range & More

Some of the arguments posed by organisations to not offer stipends for students are the following:-

• “We are a start-up and can’t afford to pay our interns.”
• “Interns don’t create much value to our organisation.”
• “We will be investing time and resources to train the interns, what’s the point of giving them a stipend?”

Needless to say, the underlying objective of doing internships is to learn the tricks of the trade and not to make money. However, it is but natural for students to expect some remuneration in return for the effort they are putting in, and many organisations are coming forward to offer stipend for students.

What Is A Stipend?

So, what is a stipend? A stipend is a fixed amount paid by a company to its interns, apprentices and trainees. The objective of a stipend for students is to cover their basic cost of living expenses. The basic costs that a stipend for students can cover are housing, commuting and more.

• The period of payment may vary. For instance, a company may pay a stipend at the end of every month, or even a lump sum amount at the end of the training period.
• The amount is always documented in a contract and is paid according to a pre-decided timeline.

How A Stipend Helps

When companies offer stipends for students, chances are they would attract quality candidates and motivated future employees, and this would create better ownership for the work done by the intern. Internships with stipends for students are more likely to get converted into full-time jobs and also enhance the experience of the interns. This, in turn, results in better retention and attracting a pool of qualified candidates in the future.

For a company, it would be a small amount but the first stipend for students boosts their confidence, enhances their resume, and makes an intern more willing to give their job their all.

Also Read | How To Earn Money Online As A Student: Check Top 5 Ways To Make Money Online

The First Stipend For Students Boosts Their Confidence And Makes Them More Willing To Give Their Job Their All.

Salary V/S Stipend

What is stipend vs salary? A salary is often offered to a permanent, full-time employee in lieu for their work. Salary is either calculated hourly or based on performance, while a stipend is always fixed and a relatively smaller amount. A salaried employee typically gets other additional benefits like health and medical insurance while an intern doesn’t. Moreover, based on the performance review of an employee, salary may increase with time, while stipend may increase only at the discretion of the employer.

Types Of Stipend

Companies may reimburse students' contributions in various ways. In other ways, stipends for students may take different forms:-

Fellowship | A financial offer to a student for continuing their academics.

Research Fund | This is another form of stipend for students which is a grant given to pursue academic research.

Reimbursement | Say you are incurring expenses on the job that are critical to performing your duties. For example, a dinner or meal with a potential client for a business development intern or a cover of travel expenses for a sales intern. These are task-specific and can or cannot be a part or not of the stipend you receive.

Training | The cost you have to incur to train for a particular job may not be part of the stipend, and would be borne by the company. For example, an IT intern has to undergo training in a coding program and the same is paid for by the company.

Insurance | The premium for health and medical insurance is borne by the organisation for an intern whose job needs them to endure health risks.

Also Read | Why and How To Document Your Internship

Stipend- Range

According to Glassdoor, the average stipend for students in India is Rs 12,000/- per month. It may range from Rs 2,500 (favourably for a virtual internship) to Rs 30,000/-, depending on the complexity of duties the intern needs to perform.

• In industries like banking, IT and Tech, FMCG and online e-commerce, fresher minds from business schools are required. The hotter and in demand the skill, the more attractive would be the pay. Hot skills like big data, coding and management are sought-after in every industry.
• In 2020, Goldman Sachs hired 740 summer interns in India across several divisions while Wipro hired 100. They offer with the intention to finding out the best talent fits, which eventually leads to a higher conversion rate.

There’s a place for everyone in today’s job world as companies are on the lookout for fresh talent continuously. They are willing to offer attractive stipend for students as a part of their talent acquisition strategy.

During an internship, interns get an opportunity to work on live projects and are mentored by business leaders and managers. For any student, be it in graduation or academia, an internship is an important stepping stone in their career. However, finding the right opportunity, that too a paid one, can at times be a trouble. Going through training is deemed necessary for the completion of the course being pursued by the student. On top of this, managing living expenses (if one is not financially supported by family), student loans, and commuting and lodging expenses are often additional responsibilities for students. This is where a stipend for students comes into the picture.

Parisraja Bajpai is an Organisational Psychologist, with extensive hands-on experience in talent acquisition, talent management, employee counselling, employee engagement, training and development. She is currently heading HR department at Nexstgo. Views expressed in the article are of the author and do not reflect those of the company she is associated with.