The good sense of second chance hiring

Jeffrey Korzenik believes former prison inmates have a key role to play in America’s labor market. A chief investment strategist for one of the nation’s largest banks, Korzenik has appeared regularly on CNBC, Fox Business, and Bloomberg TV. He is the author of Untapped Talent: How Second Chance Hiring Works for Your Business and the Community. This interview has been edited for length and clarity.

How did you get involved with second chance hiring? I oversee the allocation of over $40 billion in investments. You can’t understand investments without understanding the economy, and you can’t understand the economy without understanding the labor force. About 10 years ago, I started researching problems in the labor force and predicted a labor shortage because 20 and 30 years ago we stopped having enough babies. I came to the conclusion that social ills such as long-term unemployment, the opioid epidemic, and justice system involvement are also economic problems, because they’re keeping people out of the workforce. In 2015, I began discovering companies that had made a practice of hiring people in need of a second chance, usually because of involvement with the justice system. Some businesses out there had figured out how to do this in a way that made sense for the business as well as for the individual.

What are the challenges former inmates face in seeking employment? Housing and transportation. As a felon you might be barred from certain types of public housing or lack the resources for a down payment. For some, their driver’s license expired in prison. It’s difficult to keep track of your documentation, particularly for people who don’t have strong families. But the biggest barrier is societal stigma, and the belief that people with criminal records can’t be good employees.

Can you give an example of a business that has been successful in hiring such employees? Dan Meyer is the CEO of Nehemiah Manufacturing, a for-profit, consumer goods manufacturing company in Cincinnati. Meyer located his factory in the heart of the inner city and started hiring people with criminal backgrounds. It didn’t work at first. He learned he had to provide different kinds of support. Many people in the criminal justice system come from deep poverty and lack mentors and family examples of successful work experiences. They don’t know how to be good employees, or they lack resources like easy access to transportation. So Meyer developed a support infrastructure. That was an investment, but now he has dedicated employees and low turnover, which is unusual in his industry. That contributes to his profitability. About 150 of his 220 employees are second chance employees. In 2018, Harvard Business School did a case study on Meyer that is now required reading for all Harvard MBA candidates.

Did any experiences influence your work in this area? I’m the son and grandson of immigrants. My mother is a German war refugee. My father is the son of immigrants from Russia and Poland. So in many ways, this country has been a land of second chances for us. My father, who passed away in 2003, did what I call the heavy lifting in our family. He enlisted in World War II at age 17 and was the first one to go to college. He went to law school and undergrad at the same time on the GI Bill. But he never lost track of his roots. When I was a kid, he would go visit his old neighborhood in Hartford, Conn., under the pretext of running errands. Sometimes I would go with him. Once he introduced me to a friend of his who ran a junk shop. As we were walking away, my father told me the man had gone to prison. I asked, “For what?” He said, “For murder, a crime of passion.” Then my dad said something that’s stuck with me for half a century: “He’s done his time.” That really resonated with me.

You call your second chance model the “talent acquisition model.” Companies using the talent acquisition model are committed to building partnerships, finding the people who are good fits for your company, and giving them the tools to thrive. This is different from the disposable employee model. You’ll hear some businesses say they can’t find any workers, so they have decided to lower their standards and hire people with criminal records. They’re just looking for cheap labor. So they’re not terribly selective or interested in longevity. That’s the wrong mindset. Another is what I call the undifferentiated model, where employers say, “I tried it.” This is generally a case where companies try to be selective and seek out talent, but they don’t understand the support mechanisms that are needed. They have employees who don’t show up and don’t call, so they terminate them. But the employee may not have known you’re supposed to call if your car breaks down because of their background of little to no work experience. Or that employee didn’t have a cell phone and couldn’t call an Uber.

What are common mistakes that companies make? A CEO may stand behind giving people opportunities but never actually hire second chance employees. These companies have a structural problem. The people who make the hiring decisions have too many career incentives to say no every time. More commonly, businesses don’t know how to judge people who come from nontraditional backgrounds. You’re looking at someone who might have spent several years in prison, has never had a career, and has a fairly low level of education. How do you judge that person’s talent? Businesses tend to overlook talent, or they think it is best to go with nonviolent drug offenders. Often those people aren’t the best candidate.

So, how do companies find good candidates? One way: They can use temp staffing agencies. For instance, Mixed Staffing and Recruiting in Grand Rapids, Mich., screens people with nontraditional work backgrounds for businesses and trains people in the soft skills and life skills that successful employees need. Another solution is to work with nonprofits that have partnerships with prison systems. Christian nonprofits care a lot about things that employers value, such as building character and giving people a foundation for good decision-making. Businesses can’t do this alone. They need partners.

How can companies address practical hurdles—lack of transportation, for example? Very often, all they have to do is ask. CKS Packaging is a second chance employer based on Biblical values and headquartered in Atlanta. They found that their employees lived in a neighborhood that didn’t have easy access to their factory. So they reached out to the Atlanta Department of Transportation and got them to change the bus routes. It didn’t cost the company a thing. The agency was happy to do it because it served their ridership.

How do employers balance accommodating second chance employees with the need to maintain excellent standards? If they’re doing this right, it takes care of itself. If they are picking the right people, those employees aren’t going to abuse that kind of flexibility because they are dedicated to their employers. You have to be flexible, but maintain discipline. I tell employers: If you give someone flex time to meet with a parole officer, they still have to make up that time. If they need an hour away from the office, they still need to work that hour at some other point. You’re not sacrificing quality. Businesses see this flexibility repaid in really dedicated employees, and that’s the return on investment. One caution: These employees tend to be very loyal to their employer. It’s kind of hard to get them out of there.

How has your religious background influenced your work? I come from a Jewish heritage, but my mother was raised a Catholic, so I like to say that we raise our children confused. This year it was a Passover Seder celebration followed by Easter Sunday. I embrace a Judeo-Christian view of the world. But I did not have a lot of exposure to evangelical Christians. My work with second chance employment has put me in touch with a lot of people and groups that are doing incredibly good work, like Prison Fellowship, which is changing hearts as well as minds. Many of the business owners who took a risk to hire second chance employees did so out of a faith-based worldview. Chris­tianity, with its belief in original sin and the power of forgiveness and redemption, has inspired a lot of people to be pioneers in second chance hiring in the business community.

For a company still on the fence, what would you say? This labor shortage is not going away. We can’t do anything about low birthrates 20 and 30 years ago. We have over 11 million job openings in the United States and over 6 million people who are looking for jobs. That’s a shortfall of 5 million. We’ve never seen anything like this. Because the problem is not going away, businesses must consider second chance hiring now or their competitors will. Like anything in business that’s worth doing, it’s not easy and you’re going to make mistakes. But it’s a worthwhile investment when you know how to do it right.