Employers Reluctant to Hire Individuals with Criminal Records
In the United States, an estimated 70 million individuals have some form of criminal record. This significant portion of the population often struggles to find employment, as many employers remain hesitant to hire those with past convictions. This issue disproportionately affects people of color, amplifying the need for effective hiring solutions that can bridge the gap between job seekers with records and prospective employers. A new study conducted by researchers at RAND and the University at Albany has found that government incentives, such as tax credits and insurance for potential losses, can significantly increase the willingness of employers to hire these individuals.
According to the study published in Criminology & Public Policy, even though society benefits when individuals with criminal records gain employment, the fears that employers hold can be mitigated through direct financial incentives. “We tested whether this reluctance could be reduced with direct incentives that lower the cost of employing people with records or that compensate employers for the associated risk,” states Shawn Bushway, a senior policy researcher at RAND and one of the study's authors.
Innovative Incentives Framework
The research examined two sets of experiments involving diverse hiring managers reviewing applications from hypothetical job candidates. In one scenario, the applicants’ criminal histories were disclosed upfront, while in the other, they were concealed until later in the hiring process—a practice aligned with the Ban-the-Box legislation adopted by 37 states. Despite the existence of these policies, hiring managers still preferred candidates without records.
The game-changing incentives introduced in the study were a $2,400 tax credit for hiring individuals with records and a $25,000 insurance policy against any losses due to employee dishonesty. Both options significantly increased the likelihood of record holders being hired compared to traditional hiring methods. Notably, the effectiveness of these incentives did not hinge on altering perceptions about the suitability of employees with records; instead, employers were motivated by the potential financial softening of risks.
Surprisingly, the study also revealed that the provision of rehabilitation certificates—which provide insight into a candidate's likelihood of reoffending—helped improve hiring managers’ perceptions, suggesting a positive therapeutic impact on perceptions of what record holders can offer as employees.
How Policy Changes Can Shape Employment Outcomes
The implications of this study could be vast. The evidence suggests that policies integrating rehabilitation certificates with direct financial incentives could significantly improve employment rates among individuals with criminal records. These findings reflect ongoing discussions in employment policy realms regarding the effectiveness of existing frameworks such as the Work Opportunity Tax Credit and the Federal Bonding Program, which are currently not widely utilized
Justin Pickett, another co-author of the study, expressed that a combination of existing policies and new, nuanced strategies could indeed shift hiring patterns. Given that 21% of the U.S. population has a felony record, this revitalization of hiring strategies could create an opportunity for millions to reenter the workforce.
As companies increasingly seek diverse workforces, the introduction of straightforward incentives could enhance workplace inclusivity. While larger corporations often have stringent hiring processes that leave little room for individual assessments, smaller companies might find the strategies explored in this study more applicable, as they often rely on hands-on decision-making.
While the study does have limitations—such as the hypothetical nature of applicants and the non-representative sample of hiring managers—it still provides concrete groundwork for creating policy that enhances job opportunities for a segment of the population often marginalized in professional scenarios.
With innovations in employment frameworks becoming increasingly crucial, understanding how these financial incentives can influence hiring practices is a key question for policymakers, businesses, and social scientists.