Internships: The Best Places to Start

More than just résumé-padding, these summer opportunities have become great tools for students and employers to find that perfect fit

By Lindsey Gerdes

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Elana Gerasimova spent the summer of 2006 working as an intern for JPMorgan's emerging markets desk. The University of Pennsylvania senior enjoyed the summer in New York because of the variety of tasks she was given and the executives she had the opportunity to work with. "They really made a point to give us actual projects," says the 22-year-old native of Bulgaria. "I loved it and then I got an offer to come back." Now Gerasimova is a first-year analyst with JPMorgan (JPM) investment bank, No. 8 on BusinessWeek's inaugural 50 Best Internships ranking.

Getting an internship used to mean a 10-week exercise in photocopying, sorting mail, filing, and fetching sandwiches. If you were lucky, there might be a company-wide picnic thrown in. Forget that image. The college internship has become nothing less than a high-stakes tryout to land the perfect first job. Think of it as the job interview that lasts all summer long.

What happened to the days when internships were something put on your résumé—one that usually went to other employers? The answer is simple: Demand is high for entry-level workers, especially the cream of the crop. These days, employers are looking for an edge—any way to get their hands on prime candidates early, particularly in industries such as accounting and investment banking where there is intense competition for top students with specific skills or majors.

Big Four in the Top Five

If you have any doubts, listen to Lehman Brothers (LEH) managing director Larry Band express his company's view of its summer internship program. "It's the primary entry point to full-time employment," he says.

That's why BusinessWeek has created its first annual ranking of the best U.S. companies for undergraduate internships. Our ranking highlights the employers who are doing it right. PricewaterhouseCoopers tops our list, followed by Ernst & Young and Deloitte & Touche. The last of the Big Four accounting companies, KPMG, comes in at No. 5, right behind financial-services powerhouse Goldman Sachs (GS).

Why is it so important for employers to appeal to Gen Y through internships? A solid internship experience can be an effective recruiting tool to identify (and snap up) top entry-level candidates in an increasingly competitive marketplace for the best and brightest college grads. "It's so competitive, there are simply not enough really good students," says Jean Wyer, a principal at PricewaterhouseCoopers. "Internships have become more important, so we look at the availability and quality of ours as an important differentiator in the marketplace."

How We Gathered the Goods

Nearly one-third of all entry-level hires at the companies on our list once worked as interns for their employer. Hiring interns also helps employee retention. According to Claudia Tattanelli, chief executive officer of Philadelphia-based research firm Universum Communications, studies show employees who start out as interns before coming on board full-time usually stick around longer and have better retention rates.

With this ranking, BusinessWeek has put together a guide to the best internships that, unlike any other ranking, provides information on pay, the number of interns each company recruits, and how many interns are offered full-time jobs. To compile our list, we started out with the nearly 100 employers included in BusinessWeek's 2007 Best Places to Launch a Career, our ranking of top U.S. entry-level employers released in September.