The DE&I Blind Spot: Second-Chance Hiring

The business world has a diversity, equity and inclusion problem. And grass is green, water is wet and you’re thinking “tell me something I don’t know.” It’s obvious that there is still a lot of work to be done on DE&I, despite many improvements over the last 20 years.

DE&I initiatives are finally starting to become a core part of business strategy. This is because diversity has become an important predictor of financial performance, as detailed in reports from McKinsey among other firms. Previously a measure of corporate social responsibility (CSR), improving DE&I is now motivated by profit as much as purpose. But despite all the data and proof points supporting the importance of DE&I, many companies are still lagging behind on making meaningful improvements. However, the problem that I’m talking about is specific, and it’s something even the most progressive companies struggle with: second-chance hiring.

Also called fair-chance hiring, second-chance hiring is the practice of hiring individuals with criminal records. According to SHRM, approximately 70 million people in the U.S. have a criminal record, equating to one-third of working age adults. Despite the staggering number of job seekers impacted by incarceration, employers continue to overlook candidates from this considerable talent pool. It is a significant blind spot in the business world, and the root of the problem has as much to do with empathy and bias as it does with actual DE&I initiatives. No matter the cause, the solution to the second chance hiring problem is to do it more, do it better and understand why it’s so important.

The Case for Second Chances

DE&I initiatives have shot toward the top of many companies’ priority lists in the last two years, and 76% of job-seekers and employees consider the diversity of the workforce when evaluating job offers. While DE&I is typically focused on factors like race, gender, disability status, military service and the LGBTQIA+ communities, true inclusion requires us to go a step further to include those with a criminal background as well.

The stigmas attached to a criminal record are often the hardest part for second-chance hires to overcome. They present as a lack of trust that makes employers reluctant to hire candidates with criminal records, thinking they will create risk or engage in undesirable behavior on the job. These stigmas are a major factor in the 27 percent unemployment rate among people impacted by incarceration. For context, the national unemployment rate is less than four percent. The goal of a strong DE&I program is to ensure a seat at the table for all employees and a fair chance at success within an organization.

Workers impacted by incarceration can’t have a seat at the table if they can’t even get into the room. When we look past the stigmas that come with a criminal record, we can see that there is an incredible amount of untapped talent and potential among those impacted by incarceration. Looking at the multitude of roles that have opened because of the Great Resignation, it’s smart business to consider these individuals when hiring. In fact, the U.S. Chamber of Commerce estimates that the country has lost up to $87B in GDP due to excluding job seekers impacted by incarceration. It’s no longer about individual companies or industries; the U.S. economy can’t afford to exclude formerly incarcerated workers.

Eliminating the Blind Spot

If the Great Resignation has a silver lining, it’s that this disruption has given businesses a reason to innovate and expand hiring practices. With such an upheaval in the job market, tapping into a pool of overlooked talent can be advantageous. Organizations like Koch Industries and JPMorgan Chase recognize this, and they are leading the charge on second-chance hiring. In 2019 alone, JPMorgan Chase hired more than 3,000 people with arrest and conviction records nationwide, about 10 percent of their new hires. The organization also launched the JPMorgan Chase Policy Center to advocate for federal and state policy changes to remove obstacles to employment for people with criminal records. The “Creating Second Chances” strategy deployed by Koch in 2020 lays out steps that other organizations can follow. These include not disqualifying job seekers with criminal pasts, removing unintended barriers in hiring practices, ensuring employees with criminal records are not stigmatized in the workplace, and perhaps most importantly, ensuring accountability by making a public commitment.

The practical and policy work that both Koch and JPMorgan Chase are doing is important and necessary, but change doesn’t only happen from the top down. Smaller businesses have a lot to gain from second chance hiring. The local bakery hiring employees with criminal records is just as important in changing the narrative around workers impacted by incarceration. Policy changes, such as “Ban the Box” laws only go so far, and long-term advances in diversity, equity and inclusion start at the community level.

The dual purpose of DE&I is to make the business world more representative of the actual population, and to level the playing field for employees from disadvantaged groups. Individuals impacted by incarceration are by far the least represented and most disadvantaged group. As most people impacted by incarceration are from minority groups, they face the stigmas and stereotypes associated with their racial, cultural, gender or other identities along with those associated with their criminal record. These are often the people that require the most help to succeed but receive the least resources to help them.

As the Chief Social Responsibility Officer of a company founded on providing second chances by employing women who are currently and formerly incarcerated, I experience the transformative power of second-chance hiring every day. As a second-chance hire myself, I have seen firsthand how powerful a supportive employer and the right resources can be for individuals impacted by incarceration. The positive outcomes that I, and others like me, have achieved are replicable. But to eliminate the second-chance hiring blind spot and bias, we must all change our mindset along with our policies. By doing so, we can achieve true inclusivity and create stronger businesses and communities in the process. Because if we are serious about DE&I, it starts with inclusion, and that means including everyone.