advertisement
advertisement

Second-chance hiring could help solve the labor shortage—and address racial inequality

Improving employment access for justice-impacted individuals could help fill the millions of currently vacant jobs while also reducing crime and economic disenfranchisement.

Second-chance hiring could help solve the labor shortage—and address racial inequality
[Images: matthiashaas/iStock/Getty Images Plus, Targrid/Getty Images]

There are more than 10 million vacant jobs in America, with thousands more people quitting everyday as the Great Resignation’continues. Employers are having a hard time hiring. At the same time, there’s still a necessity to redress the discrimination and inequity that pervade our economy and society. Businesses have a growing responsibility to address both crises—and by improving access to employment for justice-impacted individuals, we can embrace that responsibility.

advertisement
advertisement

One in three U.S. adults, or more than 70 million people, has some form of criminal or arrest record. These individuals, in turn, face substantial and often completely unnecessary barriers to employment, education, and housing. The unemployment rate for formerly incarcerated individuals is 27%—higher than the general rate during the Great Depression—and this economic exclusion costs our economy up to $87 billion a year.

This would seem wasteful under any circumstances, but when viewed in the context of a hiring crisis, it becomes inexcusable.

Racial inequities mean people of color are more likely to be arrested, charged, convicted, and sentenced for crimes. They therefore disproportionately suffer the economic disenfranchisement that a record imposes. In the aftermath of George Floyd’s murder, thousands of corporations made public commitments to fight racial and social injustice—American Family Insurance included. Increasing access to employment for justice-impacted individuals is one way we have acted on those commitments over the past two years while maximizing the potential of a vast and diverse talent pool. By expanding their own second-chance hiring programs, businesses across the country can help address the labor shortage and advance racial equity, too.

advertisement

Filling jobs, reducing crime, and helping communities

In 2018, we launched the American Family Insurance Institute for Corporate and Social Responsibility to drive change and close equity gaps across the country. As part of the Institute’s focus, we’ve partnered with organizations working to support families who have been impacted by the justice system, including through incarceration. We also wanted to look at changing our own practices—and the most obvious place for us to start was with hiring.

The fastest, easiest way to improve our practices was to remove any upfront questions about past justice involvement on our job applications. We got rid of any checkboxes asking individuals if they had a criminal record and updated our job postings to make clear we would consider qualified candidates with criminal histories.

We also took these efforts a step further and created partnerships with two organizations to help ensure we were actively recruiting justice-involved individuals. We worked with Next Chapter, a national nonprofit that provides coding education and apprenticeships for people while incarcerated so they can potentially be hired as IT professionals after their release. We also worked with JustDane, a nonprofit based in our home state of Wisconsin, to both hire team members and ensure they had the resources and services necessary to succeed. I had the honor of outlining our company’s program in a TED talk last year. (Because of the steps to avoid disclosure, there aren’t numbers on how many people are second-chance employees.)

advertisement

Hiring individuals with criminal records doesn’t just serve to fill jobs—it actually reduces crime. The Prison Policy Initiative shows a direct link between gainful employment and a reduction in recidivism. Supporting justice-involved individuals also helps families. Nearly half of all children in America have a parent with a record and may therefore face major life hurdles, including financial stress in the family.

From a community standpoint, these practices and policies will also reduce the burden on the taxpayer. By improving access to employment, we will reduce the need for long-term government support like unemployment benefits. The reduction in crime will also decrease costs associated with law enforcement and incarceration. Studies have shown that the employment of just 100 formerly incarcerated people would save more than $2 million in correctional costs.

What businesses can do right now

Maybe not every business can launch entirely new programs, but every employer should consider adopting fair chance hiring practices that provide meaningful second chances to deserving job seekers. This isn’t just the right thing to do from a moral perspective. Justice-impacted employees have been repeatedly shown to be loyal and productive team members, resulting in higher retention rates, lower turnover, and reduced recruitment costs—often thousands of dollars per employee.

advertisement

But companies can do more than hiring. Businesses should consider publicly supporting legislation that makes it easier for people who are justice-involved to obtain meaningful employment, like American Family Insurance has done in Wisconsin. Seven states have already passed “Clean Slate” laws, which would automatically expunge certain old criminal records, helping individuals find and keep jobs. The rewards for these policies are clear—Michigan employees who had their records expunged saw their wages increase by more than 20%. If companies want to help rebuild a more fair, equitable, and inclusive country post-pandemic, we should encourage lawmakers everywhere to follow their example.

All businesses are struggling with hiring in some respect. By including people who are justice-involved, we can help meet our responsibilities as businesses, community leaders, and as human beings.


Nyra Jordan is the director of social impact investment at American Family Insurance.

advertisement
advertisement