Employers are more likely to hire those with nonviolent felony convictions if they are given financial incentives to do so. At least that’s according to research conducted by the RAND Corp.
In its report – Breaking Down Barriers: Experiments into Policies That Might Incentive Employers to Hire Ex-Offenders – released last year, the nonprofit institution published the results of a survey of 107 employers from 34 states. Most were from smaller companies of less than 100 employees. The majority – 58 percent – of respondents were owners or managers, with human resource professionals making up 21 percent.
Although the response rate to the number of surveys sent out was low – just 3.4 percent – it gave insight into methods that may help encourage companies to hire more formerly incarcerated job seekers.
The survey began by telling the story of two job seekers, each with a nonviolent felony conviction and the technical skills required to do the entry-level job being applied for. Although they have similar qualifications, each comes with the support of a different form of financial incentive if hired. One candidate would provide the benefit of a tax incentive and the other an employment agency discount.
Respondents ranked the “applicants” based on whether they would advance the applicant to the next level in the hiring process or opt out and not consider them for employment. The survey also gave a list of issues that might cause concern in the hiring of someone with a criminal record and asked that these be ranked as well.
Two types of hiring incentives
Let’s introduce the two job seekers, what incentives they bring, and how these incentives would entice employers:
Applicant with a tax incentive This incentive would offer employers a tax credit for 25 percent of an employee’s wages – up to $2,500, an amount similar to the Work Opportunity Tax Credit. The tax credit would be applicable after the person worked 120 hours. Based on that scenario, 59 percent of the employers surveyed would be willing to consider hiring a person with a nonviolent felony conviction. If the tax credit were doubled to an amount of up to $5,000, or 40 percent of the person’s wages, the percentage of willing employers would rise to 77 percent.
Applicant with an employment agency discount fee Since employment agencies are one way that companies hire entry level workers, RAND Corp. offered an employment agency discount fee as a second option. Forty-three percent of employers who were guaranteed a staffing fee that was discounted by 25 percent of the candidate’s hourly wage were likely to consider hiring a candidate with a nonviolent felony conviction. Raising the discount to 50 percent increased the number of willing employers to 60 percent. If the agency initiated a guaranteed worker replacement program, whereby it replaced an employee who didn’t work out with another one, the percentage of willing employers rose to 72.5 percent.
Employer concerns about hiring someone with a felony
As part of the survey, employers were also asked to rank seven concerns they might have about hiring workers with a felony conviction. These were, in order of the highest concern:
- That the candidate might have had a violent felony conviction
- Whether they had the skills necessary for the job
- If there would be any workplace liability issues
- The amount of time that had passed since the felony conviction
- How the person will interact with clients
- How they will interact with the company’s staff
- The candidate’s ability to perform the work in a timely manner
Recommendations to improve hiring chances
As a result of what they learned, the RAND Corp. researchers offered recommendations to improve the chances of employment for those with felonies on their record. These recommendations are geared toward policymakers, employment agencies and organizations dealing with those in reentry.
- Urge job seekers with felony convictions to use employment agencies that guarantee to replace candidates who don’t work out. Many agencies around the country have this guarantee in place and is something that employers surveyed were very interested in. The cost of losing an employee in terms of productivity and the effort to hire a replacement could be more than any savings offered as an incentive.
- State governments should provide a way for employers to get information about a candidate’s former job performance. Companies often limit access to this knowledge, based on fears of a law suit. Especially in the case of those with criminal records, however, potential employers want and need information on the work performance and history of those they are considering.
- Government agencies should reduce the amount of paperwork required to get a tax credit. The researchers determined that one of the ways to do this would be to have the forms prepared and submitted by a state government employment agency (like the California Employment Development Department, for example).
- Ensure transportation to job sites. Employment agencies, reentry programs and probation and parole departments should work to make sure that employees have a way to get to work, since this is often a problem among this population.
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