What is Fair Chance Hiring?

Please note: The ExactHire team is not legal counsel, and we do not offer legal advice, so any questions regarding your company’s eligibility for exemption with the “Ban the Box” or FCA legislation and/or proper verbiage for your company’s employment application(s) should be discussed with your company’s legal counsel.

To understand Fair Chance Hiring, you first need to understand the United States incarceration problem. The United States has one of the highest incarceration rates in the world. Today, the number of incarcerations stands slightly over 70 million.

Sometimes, a criminal record can follow a reformed criminal for years. Making them feel physically and financially imprisoned long after serving their sentence.

Formerly incarcerated persons are no different from other Americans. They have the right to get a job, secure employment, and enjoy financial security and sustainability.

Previously incarcerated persons need to earn a living, support families, and feel they positively impact society. Being part and parcel of a thriving society helps reduce recidivism.

Unfortunately, having a criminal record often presents a demoralizing reality to past offenders. Due to their criminal history, past offenders are likely to be ruled out during interview and hiring processes. A study by Harvard University has shown that a criminal record interferes with an offender’s future job prospects. Having a criminal record reduces an employer’s call-back rate by half. Offenders are also likely to be ruled out in interview processes even when qualified.

These factors are the fuel behind the Fair Chance Hiring Act.

Fair Chance Hiring

The Fair Chance Act, or FCA, is based on the premise that everyone, regardless of their past criminal history, should have a chance to be employed if they are qualified for a position that they are applying for. The Fair Chance Hiring Act deems everyone equal and worthy to be assessed for positions they are qualified for and proficient in.

What are the benefits of fair chance hiring?

Companies and organizations that embrace fair chance hiring have an opportunity to expand their talent pool. They can also better understand their markets and customers–and achieve improved customer outcomes. So if you’re looking to bridge market and customer gaps, fair chance hiring may help you do just that.

Diversity and inclusivity

Although most organizations want to build a diverse workforce, conversations about inclusivity often stop at gender, race, and orientation. The conversation needs to extend to persons with criminal histories to build really inclusive workforces. Fair chance hiring helps organizations create a diverse and inclusive workforce by expanding the definition of a diverse talent pool.

Competitive positioning

In times of low unemployment, it’s a candidate’s responsibility to play the field and identify the most rewarding opportunities. Low unemployment rates mean job candidates will try out many job opportunities before deciding which one is ideal for them. This situation makes it hard for organizations to find, train, and keep new hires quickly and efficiently.

Fair chance hiring practices expand your reach to potential candidates that your competitors may not consider. And since persons with criminal histories have a challenging time finding jobs, you might not deal with a drawn-out hiring process, or deal with high turnover rates.

Better ROI for hiring

According to a survey by the Society for Human Resource Management, 80% of managers acknowledged that the value brought by persons with a criminal history is equal to that of workers with no criminal history.

Another study by the John Hopkins Hospital found out that after four years, workers with a criminal history had 44% better retention rates than persons without a criminal past. John Hopkins Hospital has employed persons with criminal past since 2000, making it a trendsetter in the fair chance hiring discourse.

But how does that translate into a better ROI for hiring? When hiring, companies my feel the need to spend excessively on recruitment by sponsoring job posts to beat our the competition. When onboarding, organizations will spend a significant amount of money hiring and training, which is a wasted if the new hire hops to another workplace. Fair chance hiring practices can offer a better return on investment by reducing the need to spend on recruitment and producing candidates that are appreciative of the employment opportunity and will therefore stay longer.

How do Companies Utilize Fair Chance Hiring?

Hiring persons with criminal records helps reduce recidivism rates, keeping past offenders from conflicts with the criminal justice systems. However, hiring persons with criminal histories isn’t just good for society; it has multiple business benefits.

Here are some key ways companies make good use of fair chance hiring practices:

Large talent pool. Businesses that use fair chance hiring have a more diverse talent pool in their pipeline. Fair chance hiring allows organizations to expand their search, accessing sometimes hidden talent and ingenious skills from formerly incarcerated persons.
Engagement rates. According to a study by Checkr, fair chance candidates outperform other candidates in engagement and trust by 30%. Organizations seeking to foster a strong work culture must include past offenders in their hiring talent pipelines.
Reduced turnover rates. Organizations that use high-volume hiring are victims of high turnover rates. Hospitality, retail, and construction are some of the most affected sectors by high turnover rates. Luckily, studies have shown that employees with past criminal histories are more loyal to their employers. And based on a published survey, employers who’ve hired fair chance workers have positive remarks about this talent pipeline.
Diversity and inclusion. Organizations are moving towards sustainability. There are many ways to examine sustainability, including environmental and social wellbeing. A crucial part of sustainability efforts is ensuring and upholding fundamental human rights, including the right to fair treatment regardless of race, color, ethnicity, religion – and criminal history.

Needless to say, hiring fairly is hiring diversely; organizations that hire formerly incarcerated workers enjoy diversity and inclusivity because they welcome candidates that are often marginalized and locked out of other job opportunities.

Today, more than ever, organizations have a clear chance to right a systemic wrong by simply acknowledging there’s an unfair playing field in the recruitment space. And by giving all applicants an equal chance, organizations can pursue short-term and long-term business gains.

How to Incorporate Fair Chance Hiring in your Organization

Looking beyond a criminal record can be challenging, especially for human resource and talent acquisition managers. Here are a few suggestions to get everyone on board in your organization with a fair chance hiring program.

Educate yourself and your team about the FCA

You must educate yourself and your team on the fair chance hiring act and best practices. When deploying fair chance hiring programs in your organization, start by educating hiring managers and HR personnel on the challenges faced by persons with past criminal histories. For instance, you can share existing statistics on criminal records and define the challenges experienced by formerly incarcerated persons.

The best practices in this step include:

Training all personnel involved in the hiring processes
Eliminating exclusions of persons with any type of criminal history
Eliminating and avoiding questions about past incarcerations in interview processes
Developing evidence-based policies for evaluating candidates with a past criminal history
Limiting questions about an applicant’s criminal history to what’s stringently related to employment situations or business performance
Keeping applicant’s information confidential

Organizations must be steadfast to implement fair chance hiring practices.

Focus on a candidate’s potential

It’s crucial to look at a candidate’s potential as opposed to their criminal history. While the criminal past may present realities about whom you’re working with, you may fail to notice a change of behavior or undermine their abilities if you consider criminal history as an overarching assessment metric. So, focus on a candidate’s potential and proficiency as opposed to their past criminal history.

Evaluate candidates based on roles

It’s critical to ensure you’re only looking at past criminal behavior as it relates to the job at hand or the nature of business operations. For instance, an organization dealing with cash, sensitive customer information, or confidential business transactions may reserve the right not to employ formerly incarcerated persons for genuine, tangible reasons.

However, organizations failing to employ candidates with past criminal histories for purposes other than the above violate the fair chance hiring act.

The EEOC calls out three metrics known as the Green Factors for determining whether or not a person’s criminal past is relevant to the job position at hand.

These factors include:

Nature, conduct, and gravity of the offense
The time that has elapsed since the offense or completion of the jail sentence
The nature of the job sought or held

Organizations must ensure they satisfy the above requirements before ruling out qualified candidates based on criminal histories.

Why Was the Fair Chance Act Passed?

The Fair Chance to Compete for Jobs Act, otherwise referred to as the Fair Chance Act, was passed on December 17th, 2019, as part of the National Defense Authorization Act. The below section demonstrates the key provision of this ‘ban the box’ act and its implications on the employment of persons with criminal histories.

The key provisions of the Fair Chance Act FCA include:

Federal agencies and federal civilian contractors will not request information on conviction history from applicants before a conditional job offer is passed to the job candidate.
Law enforcement agencies with access to confidential information such as criminal justice histories are exempted by law from discriminating against candidates based on protected information.
The US Office of Personnel Management OPM will use the policies and regulations implementing features of the Fair Chance Act FCA to be adopted by the General Services Administration and other oversight authorities.
The oversight agencies will establish procedures directing private contractors and job applicants to file complaints against violators of the Fair Chance Act 2019.
Another provision of the Fair Chance Act is that stringent and escalating penalties will be issued after a formal written warning to a Federal Agency representative violating this law. Federal Agencies will suspend payments or salaries to employers until the employer complies with the FCA law. But this depends on the severity of their violation.

The Fair Chance Act will begin two years after enactment, which means that as of 2021, the law came into effect, changing what has been once a discriminatory employment landscape for past offenders.

Who Benefits from Fair Chance Hiring?

Individuals, private organizations, and contractors benefit from the fair chance hiring act. For instance, organizations can take advantage of fair hiring to complement their mass hiring efforts, thus meeting short-term labor demands and navigating an unpredictable labor market.

In addition, governments can take advantage of fair chance hiring to create employment for past offenders and reduce recidivism rates. Government contractors and civil servant agencies can benefit from the wealth of knowledge past offenders have, especially relating to correction and post-jail adjustment.

ExactHire – Your Partner in the Adoption of Fair Chance Hiring

Are you an individual, organization, or institution looking to use fair chance hiring? Well, don’t worry. At ExactHire, we help you customize your recruitment, application, and screening process to align with your hiring priorities and strategy.

Take the first step, by scheduling a demo today.