You've got your diploma and a brain stuffed with C++, but you don't have a job. What do you do? Take an internship, possibly unpaid, and hope it turns into a full-time gig or helps you build up your contacts and references.

Welcome to the new reality of technology internships.

Recent graduates who entered college while the economy boomed expecting multiple job offers when they graduated now find themselves accepting internships with their hard-earned IT degrees. Meanwhile, those still in school see the challenges facing those ahead of them and scramble to snag internships -- now considered a must-have by many companies.

IT Internship Trends

Technology executives, professors and career counselors note these post-boom trends in the world of IT internships:

• Students now take unpaid internships simply to gain experience.
• Recent graduates accept internships to gain experience and prevent resume gaps.
• Companies increasingly prefer that recent graduates work as interns before hiring them full-time -- a try-before-you-buy approach. 
• Many companies see no internships on a resume as a warning.  
• Increased competition makes internships harder to find.

Market Pressures

Jacob R. Miller, who helps students pursue internships as an associate professor at Pennsylvania College of Technology, says more students are accepting internships, even unpaid ones. "I believe this is a result of increased pressure on students to seek out internships before graduation and a corporate need to get a professional at a discount rate," he says.

Internships are not just harder to get, says Miller, but "companies are looking for more free help and certainly do not seem to be paying as much, even for paid interns."

Companies with tight IT budgets are more likely to hire interns to pick up the slack, due to lower or nonexistent pay rates and benefits. Employers are also more selective and feel less urgency when hiring top-notch IT grads, so they can use internships to try candidates out, allowing the company greater ability to assess them.

Students see this as a way to develop their resumes and keep their skills sharp, says Maureen Carley, associate director of the Information Systems Research Institute at Virginia Commonwealth University. "If the graduates have not found something, they will be willing to do an internship," she says. "They look at it as an opportunity to get a foot in the door."

Mindbridge, a software company with 100 employees, typically has five to 10 interns, with as many as 15 during the summer. Increasingly, the company has been able to hire recent graduates as interns, says Scott Testa, chief operating officer. "They're looking for a full-time position, and they don't want to have a big gap in their resume," he says. "People can use an internship as a springboard to get a position."

Rick Radcliff, director of conversion services for eTapestry.com, a company with a program to hire interns from Rose-Hulman Institute of Technology, says students now realize the need "to make sure they have technical experience early" in their schooling. This, in turn, "raises the bar" for all applicants, he adds.

Internship Tips

Consider these tips to cope with the new internship reality: 

• Don't reject the idea of an unpaid internship. Sometimes unpaid internships offer a better experience than paid ones, notes Carley, as companies feel they must offer something valuable in return for a student's unpaid time.  
• If you haven't landed an internship, think about applying to nonprofits -- in particular, school districts and libraries. Such organizations, says Miller, often have money for IT systems but not consultants. "The intern gets to provide major input into a substantial project," he says.  
• Even if a company does not have an internship program, consider writing a cover letter stating that you "would consider an internship opportunity with the company to build experience," Miller says. Such internships may become a trial for a full-time job.  

In any case, be sure to work hard to find an internship. "Increasingly, companies are insisting on experience prior to employment," Miller notes.

That's the case at eTapestry.com, where many applicants have some form of internship. "If they haven't, you're really trying to figure out why not," says Radcliff.