Untapped Talent: The Business Case for Hiring Former Felons

Organizations seeking loyal employees might be overlooking a key talent pipeline — former felons.

This segment of the population is not top-of-mind when considering job applicants, but it represents too large a portion of U.S. job-seekers to overlook, according to Jeff Korzenik, author of “Untapped Talent: How Second Chance Hiring Works for Your Business and the Community.”  

More than 80 million Americans have a criminal record — a quarter of the country’s population. Some 19 million Americans have a felony conviction, which involves a serious crime punishable by either death or imprisonment for more than a year.

Korzenik, who serves as chief economist for Fifth Third Commercial Bank, headquartered in Ohio, sees formerly convicted citizens as an often untapped resource to meet labor shortages.

Korzenik’s book, published in April 2021, is “the result of 20 years of research” involving the labor shortage and barriers to workforce participation, he said. But the idea of hiring former convicts — also called “second chance hiring” or “fair chance hiring” — is not new.

Nationally, companies like The King’s Kitchen in North Carolina and Texas-based Refined Technologies, of which Korzenik said 30 out of 45 non-managerial employees are second-chance hires, pioneered the practice decades ago. West Michigan companies like Butterball Farms, purveyor of specialty butter, and Cascade Engineering, specializing in large-scale plastic injection molding, developed returning citizen programs in the 1990s and eventually founded the 30/2/2 initiative, aimed at getting 30 local companies to hire two returning citizens and track their progress for two years.

“The final two-year cycle ended in 2018 but resulted in over 1,500 returning citizens being employed across over 300 companies,” said Carrie Link, executive assistant to Butterball Farms Chief Executive Officer Mark Peters. “Now, 30/2/2 acts as a resource to employers and local organizations.”

A business proposition
Primarily, hiring former felons is “a pathway to talent in a labor shortage,” Korzenik said. “It’s a business proposition, not a social proposition. Companies will write checks to charities, but will only hire those who add value.”

And these employees do add value, said Korzenik.

“If you do it right, on average, employees sourced from this group become more loyal and more engaged,” he said. “These are often people who have rebuilt their lives and have proven that they can persevere against obstacles.”

A 2021 Society for Human Resource Management Foundation study reported that 85% of human resources professionals and 81% of business leaders said that those with criminal records perform the same as or better than those without records.

A secondary reason employers are interested in second-chance hiring is for workplace diversity. Unfortunately, Korzenik noted, one in three Black people have a felony conviction. “If you’re not open to former felons, your workforce won’t reflect the diversity of the world,” he said.

Right and wrong ways to do it
Hiring returning citizens isn’t as simple as “just try it,” said Korzenik. Organizations need strategies to help these hires overcome barriers like transportation and housing issues, technology training, coaching and more.

Korzenik gave the example of a company with a successful second-chance hire who eventually stops showing up to work. That may indicate a transportation challenge — something returning citizens may not know how or have resources to solve. Since hiring managers aren’t used to providing these types of employee solutions, they may need partners who specialize in doing so.  

The first step in developing a second-chance hiring program, said Korzenik, is to identify a pipeline for finding these individuals. Typical pipelines include local corrections departments and organizations like Goodwill Industries.

Link said Butterball Farms began working with a local halfway house to hire returning citizens in the 1990s. These days, at any given time, 15-20% of the company’s workforce could be returning citizens, she said.

The second step, according to Korzenik, is to identify any regulatory issues. For example, any business near a school cannot hire former sex offenders.

The next step, said Korzenik, is to set hiring standards and limits. Organizations need stronger scrutiny for returning citizens. To that end, some companies may decide they won’t consider former felons who committed crimes against women or children.

Finally, companies must identify a process for making sure these hires have the support they need. Placement agencies like New Horizons, a Michigan nonprofit, and employee support organizations like The Source — a partner for both Butterball Farms and Cascade Engineering — can help overcome unique challenges for these hires. Companies will also likely work with parole officers to support returning citizens.

Pioneering companies helped develop this model, and it works, said Korzenik. He also noted that most companies with returning citizen programs tried it once, failed and revised their process to be successful.

“There are issues,” he said, “But every one of them has been answered by employers who are doing this.”

Link noted one lesson Butterball Farms learned.

“It worked out great – hard-working individuals, committed, focused, always on time. But we found that once they were paroled or came to the end of their program, they stopped coming to work. We made a point to tell the employees that we were ecstatic about their next phase and completing their program, but we still needed them. We still wanted them to come to work. Unfortunately, a lot of people who interact with the criminal justice system don’t have anyone on the outside valuing their worth or their contributions.”

Kenyatta Brame, executive vice president of Cascade Engineering, said that, while there’s often additional administrative reporting for returning citizens, the practice is worthwhile. “It not only breaks down the barriers individuals with backgrounds face, but also allows Cascade Engineering the opportunity to meet our employment needs and align with the product demands of our customers,” he said.

Brame noted that keeping employees’ former convictions confidential is key to a successful program, as well as “educating management and the workforce on policies and procedures so that when people do disclose their background, they are treated equitably.”

Second-chance hiring gaining speed
Korzenik said large and small companies across all industries are beginning to undertake second-chance hiring. He also noted that “people from all walks of life” face barriers to employment serving a conviction sentence. The field includes everyone from doctorate holders to teens who may have never held jobs.

While more than half of returning citizens obtain employment within the first year of serving their sentences, they tend to get limited jobs, Korzenik said. They should hold more significant positions if they qualify, he said.

“It takes one lapse of judgement,” Korzenik said, to be convicted of a felony. “Once people have served their sentence, we should all want them to be good citizens.”