A six-year longitudinal research project published in the Journal of Labor Policy (2018) that looked at formerly incarcerated employees making about $30,000/year concluded employees with criminal records:

• Have longer tenure and lower voluntary turnover than other employees
• Are less likely to be terminated for bad conduct 

Multiple other research projects by a range of academic, nonprofit, and trade groups confirm these findings.  For example, a study at Johns Hopkins found that of 79 employees in their study who had violent felony records, 73 were still employed five years later; of the other six, only one was terminated.  The ACLU’s report Back to Business: How Hiring Formerly Incarcerated Job Seekers Benefits Your Company concludes “retention rates are higher, turnover is lower, and employees with criminal records are more loyal."

Case studies further demonstrate the advantages of hiring formerly incarcerated job seekers.  Total Wine & More, with more than 7000 employees in 239 superstores across 27 states, began actively recruiting formerly incarcerated employees after finding their annual turnover rate was more than 12% lower than their other workers.  

For Electronic Recyclers International (ERI), with 750 employees at 13 locations in 10 states, employment turnover rates of people with criminal histories were 14% lower than other staff. 

While many factors account for these numbers, informed HR specialists agree that formerly incarcerated people, with much fewer employment options, are more motivated to perform better and have a sense of loyalty to employers who have given them an opportunity for living-wage work.  

A commitment to hiring formerly incarcerated people provides other benefits to businesses, communities and society at large.  Studies show that sustained living-wage employment drastically reduces recidivism rates, saving taxpayers hundreds of millions of dollars a year – and potentially increasing the tax base by billions more.  

We spend $1 trillion a year on criminal justice in the United States.  Various studies show how hiring formerly incarcerated people can significantly reduce the collective tax burden.  For example, a Pew Research Center report projected that if states could lower recidivism rates by just 10 percent, they could save an average of $635 million each annually.  The City of Philadelphia calculated that employing just 100 more formerly incarcerated individuals would lead to a $2 million reduction in the city’s budget; and a study by the State of Florida estimated increasing employment of formerly incarcerated people by 50% would save the state $86 million annually.  

Such projections are backed by a review from the Columbia University School of Business, which estimated that each formerly incarcerated person who works a living-wage job increases the tax base by as much as $100,000 per year. 

Tax savings and an increasing tax base help drive business growth and economic development,  including  additional funds for things businesses benefit from, including  transportation infrastructure, education and professional development training, research and development, and more.

Innovative and forward-thinking leaders can gain a competitive edge by taking advantage of the financial and tax benefits of hiring formerly incarcerated people.  Moreover, integrating this policy into strategic branding can enhance earned media, new partnerships, talent acquisition and retention, customer engagement, and more.  All evidence indicates that there are significant bottom line and intangible benefits to actively pursue hiring and training formerly incarcerated job candidates. 

Prisons and jails house more than two million people, literally a captive audience with little to do, trapped in a system that wastes not only talent and human resources, but also the most precious and non-renewable resource we have: Time.  Businesses are perfectly poised to engage with this under-utillized, untapped market in ways that can benefit all stakeholders.

Most so-called “workforce development” and “job readiness” training programs are delivered post-incarceration by nonprofit providers with limited experience and expertise in private sector employment.  There are ripe opportunities for industry sectors, businesses, trade associations, and Chambers of Commerce to work with these organizations to design market-driven training modules that develop the skills each industry requires, and to deliver them in-prison to people who will need employment when they are released. There already are a few examples of such select programming, and the tools available to help deliver them electronically as necessary. 

These programs and tools would allow businesses to train and vet interested job candidates from a large talent pool, and interview and extend job offers shortly after or prior to release.  Onboarding tool kits tailored to this target population and in-house mentoring programs would facilitate smooth transitions and retention.  Such cost-effective, differentiated, and easy to scale programming will help prepare incarcerated people with the skills, knowledge, and networks to attain market-driven employment, and thereby expedite parole, facilitate successful reintegration, reduce recidivism, and increase the tax base/lessen the tax burden – all while benefiting industry sectors and businesses.  

• State of Recidivism: The Revolving Door of America’s Prisons Pew Center of the States, April, 2011 

• Economic Benefits of Employing Formerly Incarcerated Individuals in Philadelphia Economic League of Greater Philadelphia & Office of the Deputy Mayor for Public Safety, September 2011

• Hiring Ex-Offenders Has Business, Societal Impacts HR Magazine, April 20, 2016 

• Cost of Incarceration in the U.S. More Than $1 Trillion Washington University in St. Louis, September 7, 2016 

• Hiring Job Seekers with Criminal Histories HR Today, September 26, 2016

• Why You Should Give Candidates with a Criminal Background a Second Chance Zip Recruiter, October 4, 2016

• Back to Business: How Hiring Formerly Incarcerated Job Seekers Benefits Your Company, ACLU Report, 2017

• How Hiring Formerly Incarcerated Can Give Your Business an Edge, Inc. Magazine Nov/2017

• Criminal Background and Job Performance, Journal for Labor Policy 2018

• Formerly-Incarcerated People And The Employment Gap: Expanding Opportunities, Forbes Magazine Jan/2022JPMorgan, Microsoft and Slack among companies hiring the formerly incarcerated, CNBC July 23/2022

• WOTC Tax Credits, IRS, 2022

• WOTC Calculator, Cost Management Services, 2022

• Second Chance Business Coalition, 2022