In a recession, students need to do work experience for free

If you want a job, a degree is no longer enough, and with graduates flooding out of university in the midst of a recession, they are looking to internships to give them the edge that employers demand.

Internship companies across the UK are profiting from this surge in interest. Employment 4 Students (E4S), an online advertiser for jobs and internships, has seen traffic rise 80 per cent since 2006, and now receives more than half a million visitors a year. Rate My Placement, a website started by a handful of Loughborough graduates in 2008, now receives 40,000 unique visitors a month. Demand has become so high that such recruitment companies as Global Experiences have started charging for placements.

The demand is unsurprising. According to the recent Destinations of Leavers from Higher Education survey conducted by the Higher Education Statistics Agency (HESA), "having already worked there" accounted for 17 per cent of job sources. That was higher than personal contacts (14 per cent), recruitment agencies/websites (13 per cent), employer websites (12 per cent) and newspaper advertising (7 per cent).

Tom Richmond, policy adviser on skills for the Chartered Institute of Personnel and Development (CIPD), says there is a consensus among professional bodies that internships are becoming essential. "There may be long waiting lists and rejections, but you've got to keep plugging away, because experience is often the decisive factor that gets you the job."

A recent CIPD survey found that 61 per cent of employers found poor skills to be the biggest obstacle to recruitment – a problem that Richmond believes can be solved through experience. "The skills you can get in an internship – things like teamwork and communication – you can't always get through a degree. Time in the workforce shows employers you can do it whereas, to put it crudely, a bit of paper doesn't."

The Government is struggling to increase the supply of internships quickly enough to meet demand in the recession. In July, a £40m fund to create more than 20,000 internships was announced. In November, the Higher Education Council for England said that it was open to bids from universities to create 8,500 new internships as part of the scheme, the results of which are due out soon. Meanwhile Oxford Brookes University began its own internal internship programme for 20 graduates. Of course, some internships are better than others. Chris Eccles, a director at E4S, says that decently paid internships with a possible position at the end, while obviously the ideal, are scarce, particularly in the recession.

"If you can't get one of those, any placements that offer new training or experience are worthwhile even if they're voluntary," he says. "Those that just leave you making tea are not going to help – in fact they cost students money to attend."

The first tip Eccles has for hopeful internship applicants is to get an email address. "The other mistake people make is sounding desperate," says Eccles. "If you want to get an internship, you have to sell yourself: don't focus on your desperation to get the place. Get your CV checked by someone who knows what they're doing, and practise your interview technique." Most of the best-quality internships are offered by those who can afford them: big private firms. Despite the recession, many places are still available and deadlines for some of the biggest – including Accenture, IBM, Shell and Ernst and Young - are coming up at the end of January.

For those who are more inspired by social concerns, the options are less good. Although many voluntary placements are available in the third sector, there are only a handful of paid internships out there.

One of the very few examples is offered by the environmental and development charity, People and Planet (P&P). This campaigning NGO pays its eight interns 10 per cent above the minimum wage during its traineeship, which runs from August to July. "For us, internships are part of our investment in young people," says Emily Cantrell, who administers the programme. "It's well recognised that a lot of people can't afford to do them unpaid. From our point of view, it broadens the talent base among those who apply."

Alys Mumford, 21, is a P&P intern who says she could not have afforded to take an unpaid placement so was relieved to land a paid one. "I've gained experience I wouldn't have got anywhere else," she explains. "I've had meetings with Ed Miliband and Gordon Brown, I've led workshops with students and written reports and press releases. "It's made me even more passionate about this kind of work – I just want to make it more accessible."