Competition for jobs is so intense that there is “absolutely pent-up demand” among jobseekers to pay an employer for internships, according to the chief executive of Etsio.com, which matches people looking for internships with employers willing to provide them.

Launched in October, Etsio.com co-ordinates arrangements in which interns often pay employers a fee for the work experience.

Kit Sadgrove told Recruiter that interns may be charged between £50 and £200 a day, with £60 day being common. Etsio charges the employers an administration fee when it successfully matches an intern with an employer, then hands the remainder of the fee over to the employer.

Sadgrove said: “There is absolutely pent-up demand from people willing to pay an employer for work experience.

“It is incredibly cheap if you see it as training, considering you are sitting next to a business owner and learning their secrets.”

And referring to the recruitment sector as an example, Sadgrove added: “There are a lot of people who want to get into recruitment but they have no experience, so who is going to take them on? This opens up the opportunities for them, and in return the recruitment agency gets some money.”

Sadgrove added: “If people are keen enough to do this they will go out and flip burgers in order to get the money [they need].”

The service has sparked widely divided reactions. The Employment Agencies Act 1973, the basis for the Conduct of Employment Agencies & Employment Businesses Regulations 2003, prohibits charging work seekers fees for finding them work.

However, Sadgrove argued that paying for an internship was no different than paying for a university education. He said he was confident that the service fell outside the Conduct Regulations.

Kevin Barrow, a partner in Osborne Clarke’s recruitment sector team, told Recruiter: “Many organisations are testing the limits of the prohibition against charging [candidates] for services for the purpose of finding or seeking to find someone employment.”

Commenting on Etsio.com’s business model, Barrow went on to say: “It is possible that EASI [the Employment Agencies Standards Inspectorate] would take the view that this was a charge for work-finding services.”

A spokesperson for the Department of Business Skills & Innovation (BIS) told Recruiter: “If an organisation is caught by the 1973 Act as an ’employment agency’ - finding work for persons with employers - any fee charged to a person (directly or indirectly) in order to be found work would be illegal under section 6(1) of the 1973 Act.”

Liz Longman, the chief executive of TEAM (The Employment Agencies Movement) criticised Etsio’s business model: “I’m sure some people would be willing to pay for good work experience, but…how many unemployed people can afford to pay £130 a day, which is what one of the companies on Etsio.com is asking for?

“At those rates not many people would be able to afford to do it for long to get the amount of valid experience they need.”

Alex Try, co-founder Interns Anonymous, told Recruiter: “Whatever happened to investing in young people, training them up and helping them to realise their potential?”