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Second-Chance Employment Is a Win for Employers and Employees

Two business people sitting at a table and holding a clipboard.

Historically, HR responsibilities have included screening out job applicants with criminal records. It's time for change.

With 5 percent of the world's population yet 25 percent of its prison population, U.S. prisons and jails release nearly 700,000 men and women into society every year. Approximately 70 million people have a criminal record (one-third of working age U.S. adults). When released, they're expected to find work and support themselves and their families. Yet even prior to COVID-19, the unemployment rate for the formerly incarcerated was 27 percent—exceeding the unemployment rate during the Great Depression.

Instead of helping these people create stable lives, too many employers do the opposite via broad-brush exclusionary criminal background checks.

Fortunately, there is some good news.

Koch Industries is currently working with SHRM on initiatives to promote second-chance employment. Koch's efforts are spearheaded by its former General Counsel Mark Holden. Before going to law school, Holden worked in prisons. "So often," he says, "you'd see people returning to prison after they'd been released. They couldn't find a job."

Since the early 1990s, Koch has knowingly hired people with criminal records. More recently, it removed "the box" from its application form. According to Holden, the results have been great loyalty without heightened liability risk. "Hiring the formerly incarcerated is," Holden states, "a win-win-win. Employers find excellent employees to meet the post-pandemic labor demand. Taxpayers are relieved as prison costs decline. And employers are doing a world of good for people who deserve the opportunity."

Second-Chance Success Stories

Before creating Dave's Killer Bread, Dave Dahl spent 15 years in prison. He credits his turnaround to a drafting class he took in prison. "For the first time," he says, "I realized I might actually be good at something worthwhile."

After his release, Dahl got a minimum wage job at his family bakery, but the same year he developed what's now the No. 1-selling organic bread in the U.S. Now retired from baking, he operates other businesses as serving as a philanthropist, supporting causes including second-chance employment. "At Dave's Killer Bread," he says, "we didn't avoid people with criminal records. Overall, we found them to be among our most loyal, dedicated and trustworthy employees.

"Like me, they wanted a fresh start. And we gave it to them."

Patricia Daniels runs Constructing Hope in Portland, Oregon. It provides a pathway for the formerly incarcerated to develop a career in the construction industry. "We work with nonprofits, unions and companies and put our students through a rigorous process," she says. "Those who graduate have a tremendously high placement rate." Daniels adds that "as an African American, it's especially heartening to see the differences being made for people of color."

Removing the Obstacle of a Criminal Record

Eric Mackie, a management-side employment attorney with Ogletree Deakins in Chicago, notes that legislatures are increasingly taking action to prevent criminal background checks from becoming undue obstacles for the formerly incarcerated. He cites a new Illinois law prohibiting employers from taking adverse employment actions based on workers' criminal records, unless certain exceptions apply. An employer may use a conviction record as the basis for an adverse employment action only if it determines that a relationship between the offense and the job exists or if the offense poses a safety risk. The employer must perform an individualized assessment and consider several factors including length of time since the conviction, the nature and severity of the crime, and the age of the person at the time of conviction.

The law also requires Illinois employers to notify an affected individual if a criminal conviction is the reason for a disqualification and obligates employers to provide the applicant or employee with a copy of the criminal history report and give the person five days to respond.

Mackie is African American. His father was once incarcerated. "Thanks to my grandmother," he says, "my dad was able to get a fresh start. During the time he spent in prison, she paid his construction union dues. Upon release, he was able to get a good job in the construction trades and stabilize our family."

"I graduated from a prestigious law school. My sister is in college and my younger brother is on a good path. I don't think this would have happened had my dad not been able to find meaningful employment."

From both a personal and professional perspective, Mackie advocates eliminating "zero-tolerance policies. They help create and perpetuate a caste-like system that altogether prevents people with criminal records from rejoining society in any meaningful sense."

The Impact of a Second Chance

In 2009, Nehemiah Manufacturing Co., which produces, packages, distributes, and markets brand-name home and baby care products, began with the specific purpose of bringing jobs to and helping change lives in inner-city Cincinnati. Its mission includes hiring people with criminal records. The company works with both nonprofit and for-profit organizations to scale the program, identify new talent and provide best-in-class benefits. "We strive to create employment opportunities for the disadvantaged," observes CEO Dan Meyer, "so that they can support themselves and their families. We create hope where there was no hope."

Through the company's 12-year history, Meyer has been able to observe the impact of their mission. "First of all," he notes, "there's been no correlation whatsoever with increased legal risk. Instead, we've benefitted from loyalty, diligence and dedication, including low turnover and high productivity."

"For employing the formerly incarcerated, there's both a moral case and a business case."

The Kroger Company, one of the largest employers in the U.S., began an initiative at one of its manufacturing plants in 2017. In this pilot program, New Beginnings, Kroger worked with nonprofit organizations and companies to create employment opportunities for the formerly incarcerated.

The program was a huge success. The retention rate after 18 months: 93 percent.

Kroger is now applying the program to all 36 plants in the U.S., plus several distribution centers, and plans to scale the program for its entire organization. The company partners with various organizations involved in creating employment opportunity for the formerly incarcerated, including coordinating with inside-prison programs. The program also includes working with prospective job applicants to help them be job-ready and bringing in financial advisors to help employees manage their income.

Tina Baumann, Senior Manager Safety, OSHA Compliance and Asset Protection states, "For people who really want a fresh start, we help make sure it's a good one." Baumann states that there's been no evidence of elevated legal or other risk in hiring the formerly incarcerated. "Instead, we've had industry leading retention rates."

"We listen to their stories of the past," she adds. "And then we experience wonderful new stories." She shares an example. Kroger hired a formerly incarcerated homeless man. Every workday, he reliably walked from his shelter to the workplace. Baumann learned that if she took certain backroads, she could pick him up on her way to work. She would drop him off one block away. Why? "No one wants to be seen," she says with a chuckle, "showing up to work with HR."

One day, on an occasion when Baumann didn't give him a lift to work, the man said he had something to show her. "Miss Tina," he said, "look at this." He showed her an older car in the company parking lot. He dangled the car keys and said for the first time in his life he owned a car. "You believed in me," he said.

Now Is the Time

"Rarely do we find something that is a true win-win-win," states Johnny C. Taylor, Jr., SHRM-SCP, President and CEO of SHRM. "Second chances provide wins for the formerly incarcerated person who gets to experience the dignity of work; the community wins by reducing recidivism and crime; and employers win by gaining access to valuable talent. Everyone wins, so embracing this opportunity should be a no-brainer."

Jathan Janove, J.D., is a former employment attorney and author of Managing to Stay Out of Court: How to Avoid the 8 Deadly Sins of Mismanagement, The Star Profile: A Management Tool to Unleash Employee Potential and Hard-Won Wisdom: True Stories from the Management Trenches.


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