Why hiring people with criminal histories can be good for business

People released from prison have long been deemed unsuitable for employment or even automatically disqualified for job consideration by many businesses. But in recent years, major employers and lawmakers have begun shifting their standards to embrace qualified job candidates with criminal histories. 

JPMorgan Chase, Intel, Bank of America, Slack, Starbucks and many other businesses have changed their hiring practices to reduce employment barriers for ex-inmates and create a pathway for a second chance. On the state government front, Arizona is now open to hiring people with criminal records. Several other states, including New York and California, have implemented policies that prohibit employers from asking about a candidate’s criminal record.

Crunching the numbers

National HIRE Network reports that nearly 75% of formerly incarcerated individuals are still jobless a year after their release because of the stigma that accompanies a criminal conviction. Given that 1 in 3 American adults has a criminal record, according to the National Conference of State Legislatures , keeping well-intentioned ex-offenders on the street instead of gainfully employed is a disaster and a wasted opportunity.

Why businesses should consider second chance hiring

Embracing fair chance hiring, which refers to hiring regardless of an employee’s background, promises benefits for both sides. For employees, it offers the chance to prove themselves as contributing members of society and move beyond the past. For businesses, it provides an opportunity to resolve labor shortages and potentially avail significant tax credits, for starters.

Here are five benefits to employers who hire people with criminal records:

Hard work, dedication and gratitude

.
The ACLU finds that hiring ex-offenders results in higher retention and lower turnover in its “Back to Business: How Hiring Formerly Incarcerated Job Seekers Benefits Your Company” report. Additionally, people with criminal records prove to be more loyal and motivated employees.


This should come as no surprise, it’s plain logic! When you give an opportunity to someone who has been undermined and marginalized, they reward you with their best efforts and gratitude.

Helps fix the hiring crunch

. NCLS reports that as many as 77 million adults in the U.S. have a criminal record, meaning ex-inmates represent a staggering percentage of the potential workforce. But this large swath of the population likely finds themselves repeatedly passed over for employment, owing to a charge in the past. 

Organizations that overlook this population risk missing out on employees with the potential to become valuable assets. The ex-inmate talent pool tends to be motivated to perform, and they also bring a unique perspective to the company.

With U.S. businesses already having difficulty in finding qualified hires, those who look more closely at this demographic have a better chance of closing their hiring gap.

Tax break

. Another incentive to hiring an ex-offender is a significant tax break, thanks to the federal Work Opportunity Tax Credit. The IRS allows employers who hire a qualified ex-convict to claim a tax credit of up to 25% of their first year’s wages if the employee works at least 120 hours, and 40% of up to $6,000 of wages paid if they work for over 400 hours. 

Your state or municipality may also offer tax incentives for hiring people with criminal histories.

A more inclusive, productive workplace

. Prioritizing diversity and inclusivity practices in the workplace is not just ethical, it can also be more profitable. A May 2020 McKinsey report found diverse companies are more likely to outperform their less diverse peers on profitability. Separately, a February 2020 Checkr report on fair chance hiring suggests that it’s a profitable business practice and drives better results. 

Checkr also found that 63% of executives who hired fair chance talent in the past year had given these employees glowing reviews. Among them, 90% said these employees go above and beyond at work; 87% reported these employees had been promoted for their performance; and 85% said these employees are loyal and stayed longer with the business.

In the light of the above, adopting fairer hiring practices makes good business sense. Organizations that build their cultures around inclusive practices will have employees they can count on and a work culture that embraces a truly diverse staff.

Powering the world of good

. Hiring people with criminal histories goes beyond the immediate benefits to your organization — it also helps improve communities. By providing opportunity to the formerly incarcerated, you help provide stability to families, reduce recidivism rates and make neighborhoods healthier. 

Want more?

Escalon has helped over 5,000 companies across a range of industries to optimize routine business functions, like HR and payroll, and operate more efficiently. Talk to an expert today.