More companies are hiring the formerly incarcerated with success

More companies are hiring the formerly incarcerated with success

The labor shortage has pushed more companies to recruit employees who have served time in prison, according to NPR and The Wall Street Journal,. There are more than 70 million formerly incarcerated people in the US. But, for employers, their retention rates are higher, turnover is lower, and they are more loyal. Hiring them can mean the difference between continuing in civilian life or re-incarceration. More companies are hiring the formerly incarcerated with success,

A survey of almost 900 human-resources professionals by the Society for Human Resource Management Foundation concluded in January that 46 percent of respondents recruited people with criminal records more often than they did a year ago.

According to the Wall Street Journal, some of the largest US companies are behind the push to hire more people who have been incarcerated. The Second Chance Business Coalition—a group of companies that works to share best practices on hiring people with a criminal background—was formed in 2021 with 29 companies and now has more than 40. Among those are JP Morgan Chase & Co., American Airlines Group Inc., AT&T Inc, and CVS Health Corp Corp.

A total of 37 states and more than 150 cities and counties have adopted Fair Chance or Ban the Box policies at least for public sector hiring. These policies provide applicants a fair chance at employment by removing conviction and arrest history questions from job applications and delaying background checks until later in the hiring process.

According to the Brennan Center for Justice at New York University School of Law, the number of Americans with a criminal history has risen sharply over the past three decades.

Today, nearly one-third of the adult working-age population, 70 million, has a criminal record.

The Brennan Center puts 70 million adult working-age people in perspective:

  • America now houses roughly the same number of people with criminal records as it does four-year college graduates.
  • Nearly half of black males and almost 40 percent of white males are arrested by the age 23.
  • If all arrested Americans were a nation, they would be the world’s 18th largest. Larger than Canada. Larger than France. More than three times the size of Australia.
  • The number of Americans with criminal records today is larger than the entire U.S. population in 1900.
  • Holding hands, Americans with arrest records could circle the earth three times.

The US has as many people with criminal records as it does four-year college graduates! US arrested adults would constitute the 18th largest nation, larger than France.

The American Civil Liberties Union (ACLU) has also published a definitive 2017 report on hiring the formerly incarcerated. It is called, Back to Business: How hiring formerly incarcerated job seekers benefits your company.

Their report begins with an eye-popping factual observation. More than 640,000 people are released from prisons each year. However, because of the stigma associated with a criminal record, nearly 75 percent of formerly incarcerated individuals are still unemployed a year after release.

Research has found that a lack of stable employment increases the likelihood that an individual will return to jail or prison, and joblessness is the single most important predictor of recidivism.

For blacks, the adverse effect of a criminal record on getting a job interview is 40 percent greater than for whites with similar histories.

The consequences of unemployment for this population can be ruinous. At the national level, economists estimate that the gross national product is reduced between $78 and $87 billion dollars because of excluding formerly incarcerated job seekers from the workforce.  The ACLU reports that corporations like Total Wine and More, Starbucks, Home Depot, American Airlines, Kock Industries, and Under Armour have begun hiring people with criminal records. Smaller companies are also tapping into this pool of job seekers, including Butterball Farms, Dave’s Killer Bread and Haley House Bakery.

Economists confirm that hiring people with criminal records is smart business. Retention rates are higher, turnover is lower, and employees with criminal records are more loyal. At Total Wine & More, human resources managers found that annual turnover was on average 12.2 percent lower for employees with criminal records.  Electronic Recyclers International (ERI) saw a similar outcome: by adopting a program to recruit employees with criminal histories, it reduced turnover from 25 percent to just 11 percent.

The website provides advice and a job board for companies who want to tap this underutilized workforce during a time of full employment.  The website connects job applicants with employers by job categories. It also emphasizes the social good of hiring formerly incarcerated people. While nearly 80% of those released from jail or prison will be re-arrested within five years, people with jobs almost never recidivate.

Employers who hire workers with criminal records can reduce their federal income tax by as much as $2,400 per employee through the Work Opportunity Tax Credit. In addition, the US Department of Labor offers bonding for the formerly incarcerated employees through the Federal Bonding Program to help employers mitigate any risk to other employees from hiring them.

With twice as many open jobs as there are unemployed in the US I think it is time to consider the 70 million adult workers in the US who were formerly incarcerated and to go about hiring them in a smart way.

Hiring those with violent behavior I believe is inherently risky. I would be very cautious about selecting such people. But hiring those with drug records, who own their mistakes, have gone through rehabilitation, and have new tools for managing life’s stressors is smart business.

There are of course legal limits on hiring the formerly incarcerated based on the crime, usually for industries and professions where a certification is required. For example, the US Securities and Exchange Commission (SEC) has a bad actor disqualification for those convicted of certain crimes or have restraining orders. These restrictions apply to beginner investment managers, principals of pooled investment fund issuers, promoters, compensated solicitors, executive officers and 20% beneficial owners of the issuer.

Disqualifying events include, among other things, certain criminal convictions, court injunctions and retaining orders, SEC disciplinary orders and cease and desist orders, and US Postal Service false representation orders. More can be learned by going to the US Securities and Exchange Commission website.

Employers have a right to see an individual’s criminal record before making a final decision to hire them (being sure to follow ban-the-box regulations in their own state or locality). However, that right has several key limitations. The decision not to hire someone who was previously incarcerated ought to be related to the job, meaning the criminal record indicates that the person could be a liability in that position.

It makes sense to me that in retail, health care, childcare, and elderly care you would not hire anyone who has recently finished serving their sentences for theft or violence. Employers reasonably want to avoid negligent hiring laws suits by hiring someone who would be dangerous or unfit for some positions.

How do employers screen without bias and hire the formerly incarcerated? Here are some straightforward steps.

  1. Use organizations like to reach out to the formerly incarcerated.
  2. Follow the ban-the-box provisions in your state and locality. Ban-the-box means you do not conduct a background check until after a conditional offer is made. Your labor attorney and organizations such as the Society of Human Resources Management (SHRM) have up-to-date listings of states and localities that have Ban-the-Box provisions.
  3. Run all applicants through your hiring process. Use structured interviews and validated assessments to identify which candidates have the highest probability of success on the job. You may find that a formerly incarcerated job applicant has the experience and skills you need for your open positions. Or, if you are hiring entry-level individuals, you may discover someone who will be the loyal and conscientious employee you need.
  4. When you do find you have made a provisional offer to a job candidate who after the background check has a criminal record, if the crime is not job-related or legally disqualifies the formerly incarcerated person from being employees, consider them.
  5. Look for actions and behaviors showing that the individual has learned from his or her mistakes, has gone through treatment, stress, and anger management, and has learned new tools to deal with the stressors of life.
  6. Be prepared to provide coaching on life skills.

More and more businesses realize that hiring the formerly incarcerated makes good business sense and is also good for the community. The retention rates for the formerly incarcerated are higher, turnover is lower, and they are more loyal. Hiring them can mean the difference between continuing in civilian life or re-incarceration. More than 45 percent of companies are hiring more formerly incarcerated than previously. Are you ready to be one of them?

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and managing partner of InnovationOne. He works with organizations to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization. Subscribe to his weekly blogs at 

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