RAND Corp. research finds incentives can encourage hiring of workers with nonviolent felony convictions

nonviolent felonyEmployers 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-Offendersreleased 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.

Getting Talent Back to Work initiative encourages companies to hire those with criminal records

Getting Talent Back to WorkIn a long-overdue effort, the Society for Human Research Management (SHRM) has launched Getting Talent Back to Work. This national initiative encourages companies to change their hiring practices to include recruiting those with criminal records.

Associations and companies that represent more than 60 percent of the U.S. workforce – the National Restaurant Association, the U.S. Chamber of Commerce, the American Staffing Association and the National Retail Association, among others – have committed to the effort.

And you can too by signing the Getting Back to Work pledge.

Getting Back to Work follows the First Step Act, bipartisan criminal justice reform, passed by the U.S. Congress late last year. And it joins other longer running campaigns like Ban the Box and President Obama’s “Take the Fair Chance Pledge” in bringing national attention to giving those with a criminal record a second chance.

It’s time to eliminate the stigma of incarceration

“This is a group we, as business leaders, cannot afford to overlook as one in three adults in the United States currently has a criminal background,” says Johnny C. Taylor, Jr., SHRM’s CEO. “Not only is it the right thing to do – to give a deserving person a second chance – but it is becoming imperative as businesses continue to experience recruiting difficulty at an alarming rate.”

Richard Wahlquist, president and CEO of the American Staffing Association agrees. “Now is the time to quash the stigma of incarceration,” he says. “Employers need to embrace greater inclusivity when recruiting and hiring, and give qualified individuals a second chance at success in life – particularly when the U.S. labor market is the tightest in history.”

Not only is the labor market tight, but many companies say that people from this population make good, dependable employees. In a study by Northwestern University researchers found that employees with records have a lower turnover rate than those without. An ACLU report, “Back to Business: How Hiring Formerly Incarcerated Job Seekers Benefits Your Company,” came to the same conclusion.

And most managers and employees alike are willing to hire and work with people who have criminal records. A recent study commissioned by the SHRM and the Charles Koch Institute found that only:

  • 26% of managers and 14% of human resource professionals are unwilling to hire individuals with criminal records. (An additional 2% of H.R. professionals refuse to hire them.)
  • 13% of non-managers, 15% of managers and 26% of human resource professionals are unwilling to work with them. (Another 2% of H.R. professionals refuse to work with them.)
Why consider those with criminal records

A brief YouTube video produced by SHRM outlines why human resource managers should consider applicants with criminal records. The reasons for considering them are:

  • To address labor shortages due to low unemployment rates, an aging population and unavailability of skilled workers.
  • To avoid discrimination claims under state and federal law.
  • To reinforce fairness in our culture.
  • To reduce the social costs of recidivism.
  • To improve the GDP, which is reduced by $78 to $87 billion annually as a result of excluding formerly incarcerated job seekers from the workplace. States that lower recidivism by just 10% could save an average of $635 million annually.
Toolkit guides companies that want to hire those with criminal records

And so, beyond signing the Getting Back to Pledge, what can companies do to increase their hiring of formerly incarcerated job seekers and those with criminal records?

Based upon an extensive body of research and evidence-based practices from thousands of enterprises, SHRM developed a resource toolkit designed to guide businesses as they commit to hiring more employees with criminal records.

The “Getting Talent Back to Work Toolkit: The Resources You Need to Advance the Hiring of Workers with a Criminal Background” takes people through the process and includes:

  • A quiz to determine how much one knows about background checks in hiring decisions.
  • Tips for using criminal records in hiring decisions.
  • Information on how to handle an applicant’s criminal record if it comes up in an interview.
  • Information on how to determine the nature and seriousness of an offense.
  • Tips for conducting a risk analysis of hiring someone with a record.

The toolkit also incorporates links to a wide variety of resources, including:

  • EEOC guidance and tips.
  • Ban the Box laws by state and municipality.
  • A Fair Credit Reporting Act Compliance Checklist.
  • A checklist for selecting a reliable Background Checking Company.
  • General resources on how to carry out an interview
  • Incentives and support, including the Work Opportunity Tax Credit and the Federal Bonding Program

Now you know that by hiring those with criminal records you can be part of a national effort to reinforce fair hiring practices, reduce the social costs of recidivism and improve the nation’s GDP. With that in mind, please help us spread the word among your colleagues and business partners, and encourage them to use the Society for Human Research Management ‘s Getting Talent Back to Work resources.

Northwestern University study finds ex-offender job retention rates longer than those without records

ex-offender job retentionA recent study by Northwestern University researchers should encourage employers who have considered hiring those with criminal records to do so.

A typical employee who has a criminal record is likely to have a psychological profile that is different from other employees, “with fewer characteristics associated with good job performance outcomes.”

Even so those employees are fired at about the same rate as other employees, and they tend to keep their jobs much longer.

The data covers the period from 2008 to 2014 and came from the client companies of a hiring consulting firm. These companies conducted pre-employment hiring exams that included psychological questions. The job seekers were applying to such entry-level white-collar positions as call center sales and customer service reps. About 27 percent of those with records had a higher than high school education.

The study stresses the fact that those with criminal records have such a difficult time finding employment is of serious policy concern. Some 650,000 people are released from prison every year (2013 statistics). And more than half of them are back in within three years. One of the primary reasons is that they can’t find legitimate jobs.

Initiatives such as Ban the Box legislation, EEOC regulations and Obama’s “Take the Fair Chance Pledge” have all helped provide a better chance for previously incarcerated job seekers, as have the Work Opportunity Tax Credit and Federal Bonding Program. Still many employers are reluctant to hire people from this population.

Employees with records have lower turnover rate

In the study, however, employees with records had a 13 percent lower turnover rate, saving the company $1,000 per year for each of them hired.

The researches concluded that “having a criminal background makes an employee less likely to leave voluntarily, likely to have a longer tenure and no more likely to be terminated. Since involuntary turnover is by definition associated with weaker performance ….. and turnover costly, this evidence taken together suggests that employees with a criminal background are, in fact, a better pool for employers.”

There was some increased incidents of employment related misconduct leading to termination, but these tended to be in sales positions. Whether the behavior is related to higher stress caused by the demands of sales positions or inherent personality traits among some of those with criminal records that might make them incompatible with this type of job is unknown.

In spite of some positive statistics that might encourage more employers to hire job seekers with criminal records, the researchers admit that more study needs to be done. The employers were aware, for example, that the people they hired had criminal records, which may have affected the way they chose them.

Also, a decrease in discrimination against those with criminal records might give a broader population of ex-offenders a chance, thus changing the applicant pool which could affect the length of tenure.

Although more needs to be learned, two things are for sure. The more formerly incarcerated people get steady jobs, the less likely they are to return to prison. And they can be a good bet and worth hiring.

 

Root & Rebound publishes toolkit to enlighten employers on the value of hiring ex-offenders

Root & ReboundOakland, Calif.-based nonprofit Root & Rebound has published the California Employers’ Fair Chance Hiring Toolkit. This 28-page toolkit is not just an exceptional resource for companies and organizations that are committed to – or considering – hiring those with criminal records. It can also be used by jobseekers from that population as a persuasive tool to enlighten potential employers on the considerations and benefits they would gain from hiring them.

Although it may be hard to believe, nearly one out of three Americans has a criminal record. As the economy continues to grow and demand for additional workers steadily rises, it will become increasingly difficult, if not impossible, to ignore that segment of the population.

In fact, according to the Center for Economic and Policy Research, in 2014 between 1.7 and 1.9 million U.S. workers weren’t hired because they had criminal records. This resulted in an estimated loss of $78 to $87 billion in annual gross domestic product.

Hiring fair chance employees makes economic sense

Hiring those with criminal records makes economic sense both in the big picture and for companies themselves, but most employers still need to be convinced.

More than 40 large corporations and nearly 250 small- and medium-sized businesses, however, have already taken the Fair Chance Business Pledge created by the Obama White House in late 2015. These businesses have promised to give people with criminal records, including those who have been incarcerated, a fair chance at employment. We suggest you review these businesses that have taken the pledge to see if there are any you might want to consider adding to your list of 100 employers to pursue.

While this is a beginning and brings attention to the issue, it’s crucial that more companies become committed to hiring second-chance employees. And that’s where Root & Rebound’s toolkit comes in.

Toolkit provides extensive info for all employers

Although it’s geared toward California employers, much of the advice and most of the action steps it recommends can be useful to employers no matter which state they operate within.

The California Employers’ Fair Chance Hiring Toolkit covers:

  • The rewards of hiring fair chance workers.
  • The best practices for onboarding and training fair chance workers.
  • How to choose a reliable background check company.
  • Legal compliance and minimizing risks involved.
Giving copy of Toolkit to the hiring manager shows initiative and having their best interests in mind.

As you interview for jobs, along with your turnaround packet you may want to print out and provide the hiring manager with a copy of the toolkit to offer them information on the additional benefits that they might receive by hiring you and what steps they need to take to do so. If you live in California, this toolkit covers all the basics that an employer needs to know. If you live in another state, check with your local American Job Center to ask for help in adding relevant state-related information.

Benefits of hiring fair chance workers

The toolkit includes evidence that fair chance employees can benefit a company or organization by highlighting:

  • Case studies of companies that have hired second-chance employees with great success. For example, Johns Hopkins Health System & Hospital, Dave’s Killer Bread and Butterball Farms all have hired a substantial number of employees with criminal records and found that their turnover rate is lower than that of those without records.
  • Testimonials from executives of companies that have been actively hiring fair chance employees for many years.

Root & Rebound’s California Employers’ Fair Chance Hiring Toolkit is very well put together and an excellent resource for both employers and job seekers alike.