Employees with Criminal Records: Is It Time to Rethink Your Hiring Practices?

July 19, 2018 By Julie Kramer - Leave a comment

Applicants with Criminal RecordsAre you struggling to fill open positions within your company? If so, you’re not alone. More than 6.6 million jobs are going unfilled in the U.S. right now, according to the Bureau of Labor Statistics most recent jobs report. With the unemployment rate hovering around 4%, many companies are facing serious labor shortages, especially when it comes to hourly, blue-collar workers.

Here’s another interesting statistic: more than 70 million American have criminal records on file—that’s nearly one-third the working-age population. So if your hiring practices include bypassing candidates who fail criminal background checks, you’re automatically shrinking your labor pool by about 33%.

That’s why, when it comes to candidates with criminal records, many companies are revising their hiring practices. According to Johnny C. Taylor, Jr., President and CEO of the Society for Human Resource Management (SHRM), now is the time for employers to rethink their hiring policies—to give second chances a second look.

What If: The Case against Hiring Ex-Offenders

Many employers are wary of recruiting applicants with criminal records because they’re worried about the potential “what ifs.” Such as:

  • What if something happens at the workplace—will the company be held legally responsible?
  • What if employees and customers react badly, should the employee’s past become common knowledge?
  • What if these new workers prove unreliable? Will it get sticky?

Because of these concerns, there is a tendency to play it safe, while still operating within the guidelines provided by the Equal Employment Opportunity Commission (EEOC) and local ban the box legislation, now in effect in 31 states and 150 counties and cities.

New call-to-action

Why Second Chances May Be Good Business

That being said, there are real advantages to hiring employees with criminal records. For example, recent studies found that:

  • Workers with criminal records are perceived by management as performing their jobs as well as or better than their peers, according to a 2018 survey commissioned by SHRM and the Charles Koch Institute. A study conducted by Stanford University—analyzing data for 5,000 San Francisco city employees—reached the same conclusion
  • Most employees say they are willing to work with coworkers who have a criminal record, according to the SHRM report. Workforce attitude isn’t a problem
  • Workers with criminal records yield lower turnover rates than those who don’t, according to research conducted by Northwestern University’s Kellogg School of Management. The study also concluded the ex-cons’ higher retention rates saved employers an estimated $1,000 per position in turnover costs
  • That same study—which followed 250,000 applicants—found that ex-convicts who do get hired are just as likely to get fired as their non-offender peers
  • Anecdotally, employers who hire ex-felons often report these employees exhibit greater company loyalty, because their employers gave them a chance when others would not

In addition, there are financial advantages to hiring employees with criminal records. Employers who hire ex-felons within one year of conviction or prison release may be eligible for a Work Opportunity Tax Credit (WOTC). In this case, the WOTC equals to 25% of the employee’s first year earnings if he/she worked at least 120 hours and 40% of first year earnings if he/she worked at least 400 hours.

Finally, more inclusive hiring practices can be good for the community. Employment has been proven to be a powerful tool against recidivism: employed ex-prisoners are 10 times less likely to be rearrested than their unemployed peers. It’s a good thing to do.

Expanding Your Labor Pool

If your company is open to hiring ex-offenders, one way to find qualified candidates is to partner with local not-for-profits that specialize in helping ex-cons find employment. Many of these organizations teach program participants important soft skills, such as having a can-do attitude and good time management.

Clearly, all employers need to be up to speed on EEOC regulations as well as the ban the box laws in the city and states where they operate.  

To avoid possible risk of discrimination, the EEOC requires that employers use an individualized assessment process when evaluating applicants who fail criminal background checks. What was the offense? How long ago did it happen? What’s the applicant’s attitude now? It’s the employer’s responsibility to determine if an applicant’s criminal record is relevant to a specific job…or not.

The bottom line is, in this market, many employers have urgent job openings to fill, and they want to fill them with the best, most talented candidates. If some of those candidates happen to have criminal records, is that a deal breaker for you?

At EPAY Systems, we want to help you make great hires—and we want to make it easy for you. Our  integrated HR and payroll software simplifies the recruiting and hiring process, as well as total HR administration. Learn more: take our two-minute tour.

Filed Under: Human Capital Management