Could 'second chance hires' solve the labor shortage?
Employers continue to say they are having trouble filling job openings. But there is a large group of potential workers who mostly remain on the sidelines: people with a criminal record.
You see the signs everywhere. Now hiring, help wanted, sign-on bonus…it looks like everyone is trying to hire new employees. Except, of course, if you are actually looking for a job. Then you find that some of those offers are not for everyone.
“Of people who have been incarcerated, the unemployment rate of those even looking for a job is 27%," said Jeffery Korzenik, the Chief Investment Strategist at Fifth Third Bank. "And in the first year exiting incarceration, it tends to be an unemployment rate of something like 50%."
Korzenik is one of the business community’s leading voices advocating for second chance hiring, which is a term that can have many different meanings in the business world.
“I use it specifically to refer to hiring people who have been marginalized from the labor force because they have a criminal record. But it really can encompass the need for people to have a second chance because they have been marginalized for other reasons. long-term unemployment and a history of addiction and two major areas and some employers refer to (second chance hiring) in that sense.”
In his new book “Untapped Talent — How Second Chance Hiring Works for your Business and the Community," Korzenik notes that there should be 2 to 3 million more people in the labor force right now, and he says those numbers have changed since COVID. “That was an estimate prior to the pandemic. This pandemic has made (the problem) worse. We’re probably looking now at something along with the magnitude of 4 or 5 million people easily, and probably more.”
Statistics show that women have worse employment outcomes after dealing with the justice system but Korzenik says that’s usually because of childcare issues. He also points out that people tend to age out of crime, and as people get older they are less likely to re-offend.
He also says that education and training opportunities are a key to success and more are needed.
“There have not been enough (of those) opportunities. And many people who are in prison, which is not all of the people with felony convictions, many people with felonies are never actually imprisoned yet face many of the same obstacles to employment, but in general, at least the ones who are incarcerated, you do see lower levels of educational attainment, for example. But as we know, (these people are usually at an age) when people can learn and are often very willing to learn.
“So most prisons will offer some pathway to getting a GED, but more meaningfully are college-in-prison programs. This was led originally by Bard College and it’s expanded. Hundreds of colleges are now involved. But there are also very practical vocational training opportunities that are growing and need to grow more. But they are out there. (For example) Michigan has ‘vocational villages’ where they give certifications in masonry and carpentry and auto repair, and even do the (in class) study part for getting your commercial driver’s license. All sorts of things where we have major shortages in the business community can be addressed, at least in part, with training in prisons.”
Korzenik feels that the business community should also be investing in these training programs, both in-house and in the community. They should also recognize that a job applicant who is looking for a second chance likely had to jump through a lot of hoop to get there.
“You come out of prison, you may get $100 or something along those lines of what’s called ‘gate money.' You may be reliant on a public transit system that you don’t know to get to transitional housing. Your IDs have been lost, you don’t know how to write a resume. You might have gone into prison before smartphones were ubiquitous, or the online application process that most businesses rely on was available. So there are all these things that the person who is actually a viable applicant has probably had to overcome against enormous obstacles. That should be seen as a sign of character and determination.”
The bottom line for business is that there is a vast pool of talent being overlooked right now that, if treated properly, could go a long way towards solving a large part of the current labor shortage.
“If you don’t go about it the right way, you’re not going to see success. But if you treat this pool as a talent pool and go looking for who is a good fit and then make sure you give them the tools to thrive, you get not just any employee, you get an exceptionally engaged and loyal employee. That’s a recipe for productivity and a recipe for profitability.”