The U.S. economy currently faces what amounts to a hiring and unemployment crisis at the same time. Across industries, companies are having trouble matching jobs with qualified people, even as unemployment remains at staggering rates.
The Harvard Business Review reports, “Though the overall unemployment rate is down from its peak last spring, the percent of the unemployed who are long-term unemployed (LTU) keeps increasing and is currently at over 40%, a level of LTU comparable to the Great Recession but otherwise unseen in the U.S. in over 60 years.”
There may be one partial solution for companies: start hiring people with legal system history.
Legal system history remains a stigmatized experience in the United States, which still has the highest incarceration rate in the world. For populations that have been incarcerated or otherwise had contact with the legal system, the impacts ripple into careers and even generations. Some companies continue to be uncomfortable with the idea of hiring a person with this history, but current employment issues in the United States present an opportunity for businesses and community members alike.
Before COVID19, formerly incarcerated people experienced unemployment rates five times higher than the national average, and up to 75% of these individuals were still unemployed a full year after their release. The Center for American Progress explains, “An applicant with a criminal record is [up to 60%] less likely to get a callback or job offer than an identical applicant without a record—and this effective hiring penalty increases twofold for Black applicants compared with white applicants.”
Beginning last spring, at least 170,000 people were released from jails and state prisons, reducing incarcerated populations in localities and states by 11% according to a Reuters report. Legal system history extends beyond incarceration, but these individuals represent community members companies can consider for hire.
While only about 15% of HR professionals have indicated unwillingness to hire someone with legal system history, this doesn’t necessarily translate into a significant majority of companies actively seeking out these prospective employees. It’s important for business founders to understand qualifications and safety to feel confident about choosing employees with socially stigmatized history.
Research has well established that racial, gender, neurodivergent, and other diverse populations remain underrepresented in positions ranging from entry to C-level hires across many industries. The demonstrated impact extends to every area of a company’s work, and the same is true for hiring people with legal system history.
The ACLU reported total cost of this kind of exclusionary hiring: “Our gross national product suffers a roughly $80 billion loss annually because of employment discrimination...That also leads to lost tax revenue for cities, which already suffer from the huge jail costs that come with the inevitable recidivism...from unemployment.”
Companies perennially cite concerns about qualification when making decisions to hire people with legal records. But the stigma is unfounded. This is partially because legal history does not necessarily indicate job skills, but also because the legal system has not impacted all populations equally.
Under many mandates, companies are prohibited from using conviction history to discriminate against prospective employees. However, if a company can and does use legal system history to assess qualification, the uneven impacts of the legal system will render some prospects invisible. This is true whether or not these candidates actually have the job skills for a position.
The Sentencing Project notes that “Today, people of color make up 37% of the U.S. population but 67% of the prison population.” Unless companies make a conscious effort to deliberately eliminate legal system history from their qualifications framework, they will miss out on potential hires from:
*Does not include other populations also unevenly impacted, such as people from Gender Diverse, Indigenous, and Asian communities. Data from the Sentencing Project.
Companies, like communities, are stronger with more diverse employees, and they will disadvantage their own growth without an updated understanding of what counts as “qualified.” Employers must broaden how they understand fair hiring and diversity; they must go beyond a willingness to hire people with legal system history - especially incarceration history - to actively seek these individuals as visible, qualified candidates for a recruiting roster.
When companies visibilize more candidates by using a broader definition of what counts as qualified, they can focus more of their hiring process on determining potential, and job skills.
Background checks with high tech, high touch approaches can play a key role verifying identities, experience, and personal narratives. This contributes to a successful fit, especially for candidates with less traditional backgrounds. Most people with legal system history are safe, qualified candidates who will benefit a business.
In 2020, nearly 3 out of 4 people in jails had not yet been convicted of a crime and are typically only there because of prohibitive bail costs. Similarly to an arrest or jail record, having other kinds of legal history can be indicative of a much broader story. Most people are only convicted of low level offenses, and even higher level convictions do not necessarily indicate a recruit’s safety or quality as an employee for a variety of reasons.
Employers who work to understand the scope, personal evolution, and experiences of their candidates will build good rapport, hire people they may have otherwise overlooked, and set themselves up for success. Legal history does not automatically mean employee misconduct will occur.
Bloomberg found that companies who reject prospects primarily based on legal system history cost themselves and their cities. Most of these candidates make qualified, loyal employees. Lead researcher and director of Northwestern’s Workforce Science Project, Deborah Weiss, told Bloomberg, “Employers are “overreacting” to applicants that check off for criminal records...The amount of money [companies] could make through [an employee’s] longer tenure is really significant.” Additionally, companies with broader hiring practices can benefit from the Work Opportunity Tax Credit that aims to encourage hiring from populations facing more employment obstacles.
Of course, it’s in the best interest of everyone for companies to pay fair, liveable wages regardless of whom they hire, and in some cases since the pandemic, these practices are preventing companies from attracting qualified applicants. However, for companies who are already meeting this standard and still struggling to find a strong fit, they can expand their options by ending the stigma and seeking out returning community members or individuals with legal history. Most often, it’s a win for everyone.