There are more available jobs than there are workers in the United States. Labor force participation has increased over the past five years, but overall labor force participation rates are lower than before the COVID-19 pandemic. Despite perceptions that there aren’t enough jobs because of layoffs and hiring slowdowns, these numbers show that, while shrinking, the labor gap persists.
This labor shortage is especially prevalent in the leisure/hospitality and wholesale/retail trade industries. The national unemployment rate sits at 3.9 percent, yet these sectors face notably higher rates (7 and 5 percent).
Amid ongoing labor shortages in these crucial industries, employers are overlooking a significant untapped talent pool: justice-affected people.
People with criminal records or histories of incarceration can help fill employment gaps
Justice-affected people, including those with criminal records or histories of incarceration, encounter major hurdles when seeking employment. Their unemployment rate surpasses 27 percent, which is 23 percentage points above the national average.
When they do find employment after incarceration, it’s often working in sectors facing labor shortages, such as janitorial work, food preparation, and stocking services. Yet their skills and potential extend beyond these roles. And with better opportunities, they could help fill critical labor gaps across the economy.
By embracing inclusive hiring practices—such as skills-based hiring and the removal of automatic disqualifications based on criminal history—employers across sectors can address critical labor shortages and tap into a pool of capable, motivated workers seeking meaningful opportunities.
Second-chance hiring benefits employers, employees, and society alike
Evidence shows second-chance hiring yields the following benefits:
Increased hiring for justice-affected people
A well-known success story of second-chance employment is Dave Dahl, the founder of Dave’s Killer Bread. Before starting his bread company, Dave spent 15 years in prison. After his release, he started working in a bakery before creating Dave’s Killer Bread, an organic bread company that hires second-chance employees. Though this story highlights one success story among millions left untold, it exemplifies justice-affected people’s untapped potential.
Strong job retention and reliability
Research shows justice-affected employees often demonstrate strong job retention and reliability, with 85 percent of human resources leaders affirming their performance matches or exceeds that of workers who haven’t been affected by the justice system. People with criminal records stay at their job longer than workers without criminal records, highlighting strong job retention.
One study found that criminal records didn’t predict misconduct-related termination in low-risk jobs, like customer service, but there was an association with misconduct for high-risk jobs, like sales. The study caveats this finding by highlighting that the increased misconduct risk in sales may be driven by characteristics of the job as opposed to those of the employee. In other words, the aspects of sales jobs that lead to misconduct might be intensified for those with criminal records, inflating this finding.
Improved reentry experience and reduced recidivism
Justice-affected people are less likely to reoffend and return to prison if they maintain employment after being released. Employment is imperative to rehabilitation and reintegration into society, both of which reduce recidivism and keep people out of prison. Incarceration is costly to society, with a price tag of around $43,000 for each of the 1.25 million people in American prisons. Reducing this number saves businesses and communities money and increases the productivity of our nation’s workforce.
How companies can incorporate second-chance employees into their labor force
By using hiring practices like skills-based hiring and removing barriers to work based on criminal history, employers can increase their productivity and provide opportunities to skilled workers seeking a second chance.
Skills-based hiring focuses on hiring employees based on their skills and experiences as opposed to hiring based on a specific degree or GPA as a proxy for the person’s experience. This form of hiring allows for increased diversity in people’s backgrounds, as individuals could build skills from nondegree-seeking programs like technical school, on-the-job training, apprenticeships, and more. It’s especially helpful for second-chance hires who might lack formal education but have experience with trades learned while incarcerated.
Additionally, eliminating or delaying background check requirements, also known as “ban the box” policies, can reduce discrimination toward people with a criminal record (PDF), helping them get hired more often.
In sum, second-chance hiring is a strategic solution that addresses society’s workforce challenges. Tapping into justice-affected people’s potential offers a win-win opportunity: Businesses gain employees while individuals gain access to meaningful work that fosters stability and reduces recidivism. By prioritizing inclusive hiring practices and removing unnecessary barriers tied to criminal records, employers can strengthen their workforce, bolster economic growth, and contribute to a more just and equitable society.
Let’s build a future where everyone, everywhere has the opportunity and power to thrive
Urban is more determined than ever to partner with changemakers to unlock opportunities that give people across the country a fair shot at reaching their fullest potential. Invest in Urban to power this type of work.
