Decision Vision Episode 116: Should I Hire Ex-Offenders? – An Interview with Jeff Korzenik, author of Untapped Talent
As an economist examining factors contributing to labor shortages, Jeff Korzenik singled out a particularly large demographic: the 19 million unemployed people with criminal records. He joined host Mike Blake to discuss how “second chance” hiring among this untapped talent pool can give businesses competitive advantages, factors for business owners to consider with second chance hiring, and much more. Decision Vision is presented by Brady Ware & Company.
Jeff Korzenik, Chief Investment Strategist and author of Untapped Talent
Jeff Korzenik is Chief Investment Strategist for one of the nation’s largest banks where he is responsible for the investment strategy and allocation of over $40 billion in assets. A regular guest on CNBC, Fox Business News, and Bloomberg T.V., his insights into the economy, markets, manufacturing, and the workforce are frequently cited in the financial and business press. His writings on economics and public policy have been published in Barron’s, Forbes, CNN, the Chicago Tribune, and other outlets. In recognition of his work on the interaction of the criminal justice system and labor markets, Jeff was elected to membership in the Council of Criminal Justice.
Jeff is the author of Untapped Talent: How Second Chance Hiring Works for Your Business and the Community (HarperCollins Leadership, April 2021), which shares the business case and best practices for hiring people with criminal records.
The book – the first and only work of its kind – shows that such “second chance” hiring, done right, delivers a loyal and engaged workforce. Korzenik shows why companies will be challenged by multi-decade labor shortages but can gain a significant competitive advantage by developing talent pipelines from marginalized workers. While this is business, not charity, Untapped Talent argues that the path to a safer, more just America must be paved by the business community.
Mike Blake, Brady Ware & Company
Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at email@example.com and make sure to listen to every Thursday to the Decision Vision podcast.
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Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional full service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.
Mike Blake: [00:00:20] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.
Mike Blake: [00:00:39] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you’d like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.
Mike Blake: [00:01:13] Today’s topic is, Should I hire former convicts? And when this topic was suggested to me, I thought it was a really cool topic. And it’s only dumb luck that I think it happens to be more timely now than it might be at other times that we have seen. I do not proclaim to be an expert in the criminal justice system. I’ve never served time. I’ve never been in a criminal matter or anything. But, you know, I have become familiar with the criminal justice system, I’ve toured the Atlanta City Jail. I’ve done ride-alongs and things of that nature, so I’ve seen some of it in action. I know some people who have worked both as prosecutors and public defenders.
Mike Blake: [00:02:03] And, you know, it’s a massive system and massive apparatus of justice. And, you know, in particular when you tour a jail or you do ride-alongs, you see a side of humanity that most of us don’t see. I think, frankly, we try hard not to see. None of us want to necessarily. Very few of us want to live in an area where crime is simply an everyday ho-hum occurrence. But for good or ill, crime is a fact of life. And the United States per capita, I think, has one of the largest and most extensive prison systems, certainly of any democratic society.
Mike Blake: [00:02:45] And a couple of data points, I think, jumped out. Almost one in three people in the U.S. has a criminal record of some kind, according to USA Today. That number shocked me. And data that I’ve seen shows that roughly 27 percent unemployment rate among former convicts. Actually, I’m kind of surprised it’s that low. I thought it might have been higher.
Mike Blake: [00:03:09] But now, here on May 11, 2021, we’re faced with a scenario that I have not encountered in my lifetime. And I don’t know that we’ve ever encountered really since before the baby boom, maybe World War II, which is, we have a labor shortage. We have widespread complaints in industry and among many industries that they simply cannot hire enough people, that there are mismatches between jobs desired, jobs being offered. People are simply deciding not to return to work because of their fear of exposure to coronavirus, particularly in high consumer touch industries.
Mike Blake: [00:03:52] And I think also based on things that I’ve read and anecdotally, I think some people are re-evaluating the cost of having a second income in the house. I think many families are reevaluating, saying, “You know, it’s really not worth it. Maybe we’ll have a lesser material standard of living in exchange for a life that we just think is better.” And I’m not going to sit and argue which is good and which is bad, but I think it’s undeniable that that’s happening. I don’t think that’s a very easy argument to sustain.
Mike Blake: [00:04:27] And so, this topic becomes timely because the questions really put to us now, can we, as a society, afford to marginalize large groups of labor? Can we afford to simply have millions, potentially, of able bodied men and women sitting this out when our economy desperately needs to get those people in the workforce? And by the way – and I’m sure our guest will talk about this at length on command of the data – there is something to the notion that, you know, idle hands are the devil’s playground. And one of the best ways that I understand you can prevent recidivism is simply to provide gainful employment to people once they exit the criminal justice system.
Mike Blake: [00:05:20] And so, given the fact I just think it’s a neat topic. It’s a neat social topic. And the fact that, now, we have this unusual confluence of factors creating, at least in my lifetime, a unique labor economy, I think it’s a very timely topic. And I hope that you’ll find it interesting. And I think we’re all going to learn something that we didn’t expect to learn.
Mike Blake: [00:05:44] And joining us is Jeff Korzenik, who is Chief Investment Strategist for one of the nation’s largest banks, where he is responsible for the investment strategy and allocation of over $40 billion in assets. A regular guest on CNBC, Fox Business News, and Bloomberg T.V. – I’m amazed they let you on all three of those at once, maybe we’ll get into that – his insights into the economy, markets, manufacturing, and the workforce are frequently cited in the financial and business press. His writings on economics and public policy have been published in Barron’s, Forbes, CNN, the Chicago Tribune, and other outlets.
Mike Blake: [00:06:19] In recognition of his work on the interaction of the criminal justice system and labor markets, Jeff was elected to membership in the Council of Criminal Justice. Jeff is the author of Untapped Talent: How Second Chance Hiring Works for Your Business and the Community, published by Harper Collins Leadership April 2021. So, it’s a brand new book with that brand new book smell. And it shares the business case and best practices for hiring people with criminal records. Jeffrey Korzenik, welcome to the program.
Jeffrey Korzenik: [00:06:47] Thanks so much, Mike. Great to be here.
Mike Blake: [00:06:49] So, I had a bunch of questions prepared, but I’m going to go off the script right away, because as I kind of learn about your bio and learn about you, the question that really jumps out is, why is this subject interesting to you? Why have you made this a big part of your life? Going through your background, there’s not an obvious connection. So, I’m curious, how have you made this your thing?
Jeffrey Korzenik: [00:07:12] You know, there are two answers to that. The straightforward answer is around 2013, 2014 the big topic among economists was the dropping out, the slowing of labor force participation rates, the decline in labor force participation rates. We couldn’t grow our workforce. And that’s one of the real pillars of economic growth. So, that’s one of the reasons we grew so poorly out of ’08, ’09.
Jeffrey Korzenik: [00:07:36] And I took it a step further and not merely observed this decline in labor force participation rate, I asked why. And I quickly came to the conclusion that the numbers the data told you that it was social ills that were hurting us in a way we’d never seen, at least in post-World War II America, long term unemployment, the opioid epidemic, and the incarceration recidivism cycle. So, it became very much part of my job, which is advising businesses and clients on economic trends. And then, I stumbled into some employers that had made it their practice to go into these marginalized groups, figure out how to bring them in, and bring them in successfully. So, that’s the straightforward answer.
Jeffrey Korzenik: [00:08:15] The deeper answer, I think, goes back to my childhood. Every family has someone who does the heavy lifting in their family. For me, it was my dad. Son of immigrants, raised absolutely dirt poor, enlisted in World War II at age 17, used the GI Bill which covered four years. So, he doubled up on classes and ended up, in four years, degrees from Harvard undergrad and Harvard Law, but never forgot his roots. And he would do these errands, which were really just excuses to visit the neighborhood.
Jeffrey Korzenik: [00:08:45] And when I was 10 or 12, something like that, I went with him on one. We stopped. He introduced me to a friend. He talked with him at length. He owned a junk shop or something. And as we walked away, my dad remarked that this gentleman had been in prison. And of course, I asked for what. And the answer, my dad told me, he was there for murder, a crime of passion. And my father said something that has just stuck with me forever. He said, “He’s done his time.” So, I think it’s combined with the economic necessity of looking at this issue, but with this sense that people who have served their sentence do deserve a second chance or at least can earn the right to that second chance.
Mike Blake: [00:09:23] Yeah. It gets into a much larger issue that I think we’re wrestling with now as a broader society. And we talked about things like student debt, for example. And I understand these things are not equivalent, but I do think there’s a parallel. Does one bad decision or even a series of bad decisions, should that be the driver to effectively ruin somebody’s life? And at what point is that justice or at what point is that serving a true social good? And so, that question fascinates me, I think, and that’s probably why I think this conversation fascinates me, because I do think there’s a parallel.
Mike Blake: [00:10:03] So, let me sort of cut to the chase. What’s your argument? Let’s take a real world example. We’ve got restaurants right now that cannot stay open as much as they like to because they simply do not have staff. Talk to me like I’m a restaurant owner or a general manager. Make the case to me that I should consider hiring somebody with a criminal record.
Jeffrey Korzenik: [00:10:27] Sure. The starting point is to recognize that my argument for business owners is purely an economic argument. I do not touch the ethical case. That’s for us as individuals to decide. But the labor shortage that you’re observing today is only going to get worse. We’ve got the baby boomers leaving the labor market on average for the next decade at 10,000 people a day are retiring. Baby boomers are retiring. The millennials are all in. And birth rates peaked in 1990. So, we just don’t have the people.
Jeffrey Korzenik: [00:10:59] So, the answer is to look where you haven’t looked before. And I guess the basic question is, why would you want to exclude the 19 million Americans who have a felony conviction and the millions more who have a misdemeanor? It’s not a case of saying all of them are employable. It’s saying that this is a very big pool that other business leaders have found or business pioneers have found can be tapped very successfully to get not just adequate employees, but actually highly engaged and loyal employees.
Mike Blake: [00:11:32] So, I want to geek out with you a little bit, sort of amateur economist on my end to economist on your end. And that is, can you also kind of make the case that because of the nature of somebody who has a criminal record as being, let’s call it, an apparent asset or stigmatized asset, for lack of a better term. In theory, economics would tell us just by drawing out the supply and demand curves that you ought to be able to get more or less the same quality of work but at a lower price, because you’re just in a different place on the demand curve.
Jeffrey Korzenik: [00:12:12] You know, what you find is, if those employers who have pursued this labor force as the cheapest labor force, it tends not to work that well. That doesn’t maximize it. It’s all about getting the right employee. And I think most business owners would share that sentiment. It’s not about getting the cheapest. It’s about getting the one that’s the best fit for the job.
Jeffrey Korzenik: [00:12:34] But what I would say is that, the model that I talk about that works requires two processes. One, how do you identify who’s ready to work? And two, how do you equip them to thrive? And that model would work anywhere. That model would work for people coming out of Harvard Business School. But the difference is, everyone from Harvard Business School was picked over already. This is truly this untapped talent pool. And so, that’s why it’s so effective. It may not be effective ten years from now, but it’s effective today because you have such a diverse group. Given the numbers, you can find some fabulous, fabulous employees and really good people in there who’ve just made a mistake.
Mike Blake: [00:13:14] So, I want to come back to that, because I think that’s a deep topic that I want to spend some time on. But before we get to that, are there any kind of programs that offer incentives for businesses to hire people out of the prison system?
Jeffrey Korzenik: [00:13:30] There are, and these are administered at the state level. The most commonly known one is the Work Opportunity Tax Credit, which provides some subsidies for employers. Again, I go back to, there are employers out there – I call this in my book, I refer to this as the disposable employee model – who are really just in it for cheap employees and where the wages are subsidized. But the model that really maximizes the economic opportunity is one that does tap those tax credits, but use it to help with training and support features. And that’s where you really maximize it. Generally, payroll companies can help. That’s a good way to access this. Almost any payroll company is familiar with this and can help with the administration.
Mike Blake: [00:14:15] So, I would have to imagine, I haven’t really been in the scenario myself. But I have to imagine that one of the biggest fears, if not the biggest, for a potential employer considering this kind of move is, how do you get comfortable with somebody that you know has a track record of doing one or more bad things and they’ve paid their debt to society, but they could incur another debt, right?
Jeffrey Korzenik: [00:14:42] Absolutely.
Mike Blake: [00:14:45] How do you address that fear or what advice do you give to business owners and hiring managers to address that fear in order to manage that risk, if you will?
Jeffrey Korzenik: [00:14:54] My advice is, don’t go it alone. There are many non-profit and some government partners that you can use that as long as you vet these partners appropriately and set the right expectations, they have time to build relationships sometimes even before release from prison, many times after release from prison, or there are many people with felonies who never served a prison term. But they can help you, as the employer, identify who’s truly ready. So, it’s essentially just another kind of referral network, but one that is largely based on character, where you’re asking them to identify who’s got the character to do this right.
Mike Blake: [00:15:35] And are those organizations easily identifiable? Can you find them through Department of Labor or Google them?
Jeffrey Korzenik: [00:15:41] Yes. So, around the country are these American job centers. There’s a website career, onestop.org, that helps you locate the ones in your area. That would be a starting point. I give many other suggestions in the book. But there’s national organizations, like Goodwill, that have active reentry programs. But very often it might be the local church. So, you have to invest some time in researching who’s the right partner for you and your business.
Mike Blake: [00:16:10] Okay. Now, I’m curious, in that support system, that information network, do prisons or jails themselves, or does the criminal justice system itself, provide any information? For example, if I’m a hiring manager, could I ask information about how well-behaved that prisoner was or how well they engaged in their rehabilitation programs? Did they overcome alcoholism, drug use, things of that nature? Is that information available from the prison system?
Jeffrey Korzenik: [00:16:41] There are absolutely ways to do that. Usually, where I’ve seen that done most commonly is places that have already built a relationship with facilities and have kind of a developmental partnership going on.
Mike Blake: [00:16:55] I’m curious – I have my own view on this, but I’m curious as to your view because you had more conversations like this – you know, are prison managers, I guess, wardens, executives, are they engaged as well? I mean, do they seem like they really want to help the prisoners reenter?
Jeffrey Korzenik: [00:17:14] There is no single answer. It varies very much between states, and even between facilities, and even between professionals and facilities. I would say that there has been a very strong movement towards prison officials recognizing that they’re job is not just to lock people up, but a broader sense of pushing for public safety, which means successful reentry. So, it is getting there. Some states and some facilities are fantastic at it, but it’s not uniform.
Mike Blake: [00:17:47] And have you noticed if there’s any distinction between privately run prisons versus state run prisons in terms of whether they seem to do a better job or worse job with preparing convicts for reentry?
Jeffrey Korzenik: [00:18:02] You know, there’s so few private prisons. It’s roughly seven percent, I think, of the prison population is in private prisons. But I don’t think that there is a particular distinction. Those contracts, you get what you pay for. So, the economists would call this a monopsony, where you have one buyer, the state, and several providers. And so, in those cases, the buyer, the state, really gets to dictate the terms. So, I think some of the folks of these private prison companies have told me, if a state approached them and wanted to do a performance based contract where the performance was based on better outcomes, they’d absolutely do that. So, I don’t think there’s a better or worse in terms of those outcomes.
Mike Blake: [00:18:53] And just as an aside, you get a gold star for using the word monopsony. I love that word. You don’t hear it very often outside of economic circles. So, that’s going to be one of the best of 2021 clips for the podcast.
Mike Blake: [00:19:10] A theory I have is, I wonder if the prison experience can actually lead to someone becoming a better employee than maybe they had been prior to entry. Not many prisoners, many convicts, had jobs. They may very well have committed their crime on the job. In your experience or in what you studied, does being in prison somehow with the regimentation or something, can that make somebody a better employee?
Jeffrey Korzenik: [00:19:44] It can in several odd ways. For one, criminologists have long noted that people age out of crime. And so, as the father of young men who were once teenagers, if I could have locked them up for ten years until their brains matured, it sounds pretty appealing. And there’s a little bit of a sense of a lot of mistakes that get people into trouble with the law are really mistakes made by young men. The prison system is disproportionately young men who have very poor judgment about risk, and delayed gratification, and things like that, that get them into trouble.
Jeffrey Korzenik: [00:20:24] So, there’s a sense that just time can help. But it can be wake up calls for people. I think we’ve all, in our lives, had times where we stumbled – presumably not in a criminal way – and not lived up to who we would like to be ourselves. And people of character, including some people, make criminal mistakes, pick themselves up, and are determined to be better people and live up to their aspirations.
Jeffrey Korzenik: [00:20:56] And then, finally, you realize that so many people who go into prison, particularly, again, young men, just had a very limited view of the world and didn’t know what’s out there and how to think. And some good prison programs really help with some virtue based training. And sometimes prison ministries have turned people’s lives around. And sometimes it stops the cycle of addiction. I’ve had several friends of mine who are formerly incarcerated tell me that prison saved their life because it broke their cycle of addiction.
Mike Blake: [00:21:31] And to that point, I wonder also, you know, years ago, I toured the Atlanta City Jail with a program in Atlanta. And, you know, one of the things that struck me – many things struck me – was how many of the inmates clearly had some sort of mental illness. And it’s almost too tempting to turn the show into on a mental illness show, but we’re not going to do that. But I think we both know that there’s a lot of mental illness that’s in the prison system. And, you know, it seems like there are opportunities for people to get treated for that as well that can help them.
Jeffrey Korzenik: [00:22:14] Yeah. You recognize that a lot of people who have committed crimes were victims of crimes. That doesn’t really change the need to have a criminal justice system. But it’s an important perspective because you realize that a lot of people had childhood trauma, trauma later in life, and that impacts how they think and that can drive criminal behavior. The challenge becomes, this is a group that’s very hard to advocate for in budget circles. Mental health treatment costs money and is a use of resources. And it’s very hard, I think, for our policymakers to say, “Here are people who have messed up, maybe hurt people, damaged property, we’re going to provide them with free resources.” It’s a good investment. But it’s something that is very hard to advocate for politically.
Mike Blake: [00:23:08] Yeah. I mean, it is hard to get people excited about trying to take care of those that have, in some way, been deemed to harm society, especially because it’s not like we have unlimited resources.
Mike Blake: [00:23:28] I’m going to change gears a little bit. To me, in my simple minded way, I think of offenders as being violent versus nonviolent. And I would speculate those have different risk profiles. They may even have different skill profiles. You know, you actually have to be pretty smart to steal millions of dollars of money from a corporation over time. There’s some skills to do that. So, my question is, does the discussion change about hiring somebody with a criminal record if that criminal record is violent versus non-violent?
Jeffrey Korzenik: [00:24:07] You certainly want to hire people who are non-violent, but that doesn’t mean you exclude people who are convicted of a violent crime. And what you recognize is that, very often, people who were convicted of violent crimes – which is actually the plurality of people in the prison system, it’s not quite over half – if you look at property crime, drug crime, and violent crime, more are in for violent crime than those other two categories. But when you dig into it, you realize a lot of that is mistakes of youth, being in the wrong place at the wrong time, sometimes its connection to the drug industry, illicit drug industry.
Jeffrey Korzenik: [00:24:54] You know, a friend of mine who has 500 second chance employees in the Philadelphia area, he said most of these guys are in the drug business. If you’re in the drug business, you’re protecting your inventory. If you’re protecting your inventory, that means having a gun. And young men with tempers and hormones and all that with guns present is a really bad recipe.
Jeffrey Korzenik: [00:25:18] So, people who’ve been convicted of violent crimes, very often, were not innately violent people. Wrong place, wrong time, bar fights, under the influence of drugs or alcohol, immature. And they tend to have served longer sentences, which means when they come out, they tend to have had more time to reflect. They tend to have aged out of crime. So, you know, one of the reasons we’ve had such little success in reentry is because every employer’s first instinct is, “Oh, I just want to talk to people drug crimes”, because that’s not violent. And very often it’s people, they are still young, still sometimes addicted.
Jeffrey Korzenik: [00:25:57] In general – you shouldn’t use generalities in your decision making – the better bet is actually one time violent offenders is usually a much better bet statistically. That being said, it all boils down to an individual assessment. Look at the person as a person. Look at the very specific circumstances of the criminal act.
Mike Blake: [00:26:24] That is really interesting, so I just learned something today. And that makes a lot of sense to me. You know, a violent act could just be a one time outburst. And you do it, you pay for it, you’re done. But, as we know, a lot of people never fully shake addiction. And addiction is just so thoroughly malevolent that the track record of shaking it, even under the best of circumstances, is problematic.
Mike Blake: [00:27:06] So, I’m curious, have you been exposed to or studied any data that measures the performance of ex-convicts as employees? Do they tend to do worse, better, about the same as their cohort with their peers with no criminal record? What does that look like?
Jeffrey Korzenik: [00:27:28] So, it gets down to the model of employment. If you ask someone who’s done a disposable employee model, maybe a fast food restaurant where they’re just after the tax credit. The people stay six months, nine months, and they’re not very selective. They’re just after the cheap labor solution. They’re not great, but they’re cheap. But if you look at the models that really maximize the economic opportunity, where there’s a selection process and the support process, that’s where you see the data really shines.
Jeffrey Korzenik: [00:28:01] And there are two large scale studies, one done by the Johns Hopkins Hospital system, when they released the data at the time they had 500 second chance hires. The other was, interestingly, the U.S. Military. The Military study was actually done outside the military, at UMass Amherst. University of Massachusetts Amherst professor who used Freedom of Information Act to get performance statistics from people who had gotten felony waivers to enlist. Both studies show the same thing. People with records selected right and supported appropriately are not just employees, they’re actually superior employees, and they tend to be more loyal and more engaged. And you can see that along any number of metrics.
Jeffrey Korzenik: [00:28:48] There aren’t a lot of studies out there. There are more coming. I know one done by another company that I spoke to the people who did the study. Again, all the studies affirm this, but it’s a matter of putting the right model in place.
Mike Blake: [00:29:03] So, accepting the fact that the studies so far are limited more in the pipeline, but the ones you’re citing seemed to be pretty positive. Why do you think that is? What is it? Is it simply motivation or is it something else that –
Jeffrey Korzenik: [00:29:18] It’s very much motivation. People who have had criminal justice interaction know that when they’re given an opportunity, it’s a rare thing. So, they tend to be very grateful for it. And, again, we go down back to that analogy in our lives, when you stumble and you pick yourself up, you’re more determined than ever. So, it’s a combination of determination to rebuild a life. And, also, to appreciation, which translates to loyalty and low turnover rates. And it may also be low turnover for the wrong reason. People don’t have the mobility to go to other firms and so they stay in place. But either way, it benefits the employer.
Mike Blake: [00:30:05] And I’m curious about one thing. You know, we hear the stories every once in a while, somebody while in prison obtains a law degree, or a Ph.D., or something like that. You know, I don’t know if those are the exception to the rule, they seem to me like they might be exceptional. But from a broader sense, are there skills that people pick up in prison, maybe either hard or soft skills that make them better employees coming out than they might have been going in?
Jeffrey Korzenik: [00:30:32] I’m a skeptic of that. You know, I hear they’re more entrepreneurial, which may be true. I think it’s not so much hard skills as a matter of character. The term that I constantly hear applied to second chance employees is, they have grit. They can navigate risk. They can bounce back. So, those are the things that – I think from the standpoint of many employers – is even more attractive than a single skill.
Mike Blake: [00:31:03] That’s interesting. And I probably finished the book, Grit by Angela Duckworth, earlier this year. And that’s interesting that I would not have expected that answer necessarily, because my understanding or my impression from what I’ve seen about the prison system is that, in order to maintain kind of basic order that the prison staff needs to establish themselves kind of as the alphas. Because they’re outnumbered hundreds to one in some cases. They’re not allowed to carry firearms inside the facility, et cetera.
Mike Blake: [00:31:41] And from what I’ve seen, in order to establish that, there really is a psychological assault to compel a prisoner basically to understand their place, for lack of a better term. Which, to me, it sounds like that would be something that would be kind of anti-grit. But what you’re describing sounds that, you know, the fact that they’re coming out with more grit, to me, is a little counterintuitive. But I mean, it’s encouraging because that clearly is such a better for life.
Jeffrey Korzenik: [00:32:08] I think some of it has to do with the reentry process. I spend some time in the book educating prospective employers about all the hurdles that someone coming out of prison has to go through, you know, housing, documentation, learning some basic electronic skills. You know, they might have gone in before cell phones were around or smartphones were around. And when you think about all the things you have to overcome just to be ready to apply for a job, and along the way face rejection after rejection, not just for jobs, but often for housing, the people who you get to at the other end, those are the ones with grit. So, perhaps they didn’t develop it in prison, but they sure as heck developed it along on the pathway out, at least the ones who are to the point of being ready to work.
Mike Blake: [00:33:01] So, we touched on the notion of due diligence at the start of the conversation, I’d like to circle back to that. From practical experience, if somebody listening on this podcast is considering – and I like your terms. I’m going to try to remember to adopt it – a second chance hire, what are red flags that someone should be aware of?
Jeffrey Korzenik: [00:33:25] Sure. I mean, repeat offenses and a sense, particularly with regard to addiction, that someone is not ready would be important. You do as an employer have the right to ask questions. And I think you get a sense of who owns this in their life and takes responsibility for this. You get to ask all sorts of questions about what would make this different. And so, I think there’s a process, and particularly if you rely on experienced outside partners, that they can handle a lot of this, getting rid of the red flags for you.
Jeffrey Korzenik: [00:34:01] But there’s a whole host of things you want to check for. Is emotional management an issue? Is work ethic, work experience? Addiction has been dealt with or traumas have been dealt with? How are they thinking? And these are things that good in-prison programming can help with, a tremendous amount of post-prison programs helping this as well. So, that’s why I always think you want a partnership with someone who can really attest to the character of the person.
Mike Blake: [00:34:33] Navigating that sounds very complex and with information coming from a lot of sources, so I can certainly see that in that case. Having a partner, especially if it’s a nonprofit, I presume that means those services are generally free or very inexpensive.
Jeffrey Korzenik: [00:34:48] Yes. And, you know, it is a responsibility of a business owner. If this is your talent pipeline of good people, you should be supporting that nonprofit, too. And a lot of these businesses do that in various ways. But, ultimately, it’s an investment and it’s a worthwhile investment. There are also, I should mention, temp staffing agencies that focus on this. And so, they do (A) a part of the vetting, but (B) as an employer, you can do a temp to hire. And a lot of programs use that.
Jeffrey Korzenik: [00:35:22] Tempt to hire has drawbacks, normally, in a tight labor market. Because the best candidates in temp to hire get snatched up right away or don’t need to go that route. But, again, this is an untapped resource, so the negatives of temp to hire for other populations aren’t negatives here.
Mike Blake: [00:35:43] Is there a particular success story of a second chance employee that you can think of maybe you can tell the audience about that can wet their appetite, at least, for what could be if they go this route?
Jeffrey Korzenik: [00:35:56] You know, there are so many stories, but I always like to share the one that I made the case study chapter of my book. My book is filled with actual business owners that have done this and some of the outcomes they’ve had. But I focus in particular on a company in Lebanon, Ohio, called JBM Packaging. And I chose them because they didn’t come to this for any kind of ethical reason – I mean, very ethical ownership. But they did it for a traditional reason, they couldn’t find talent. And they tried other pools. And that’s how they came to this.
Jeffrey Korzenik: [00:36:33] And it’s a second generation family business. They set up what they call their Fair Chance Hiring Program. And, ultimately, more than 20 percent of their 150 employees/associates are second chance, or fair chance in their terminology. It has solved their labor problem. They’ve expanded the program. They even found one of their former employees had gotten into trouble, was in the Ohio Prison system. They petitioned the prison authorities to have him transferred to another facility where they could install a folding machine. That’s part of what they do. And so, they have an in-prison training program. They pay a training stipend. Any product coming out of there, they recycle. They don’t want any question about whether they’re conducting prison labor or not. And they’ve got a pipeline now, not just of entry level, but of trained talent coming out with a former employee as the trainer.
Mike Blake: [00:37:29] Talk about a vertical integration. That’s a great story. And how long has that program been going on, do you know?
Jeffrey Korzenik: [00:37:38] About three, four years. A breakthrough moment for them was hiring a life coach that’s for their employees. And it’s not just a matter of making sure there are support resources. A lot of people who come out of these situations, life situations in prison, don’t even know how to tap resources. They just don’t know how to navigate these things. So, it’s very helpful. They’ve had a tremendous success with this program. And, ultimately, transformed the whole company. They’re now very involved in other areas of innovation, not just innovation and hiring, but innovation and packaging. Moving from plastics to paper packaging, for instance. So, it’s transformed the company in very, very positive ways.
Mike Blake: [00:38:27] In your experience or based on what you’ve seen, are there certain industries or maybe kinds of companies that lend themselves better to hiring second chance employees than others?
Jeffrey Korzenik: [00:38:38] You know, I think, again, I go back to the size of this talent pool and there could be a fit for just about every industry. That being said, manufacturing has been the easier fit. And it’s the easier fit because manufacturing roles typically aren’t customer facing. So, some of the reputational concerns or fears that employers might have aren’t an issue. People aren’t handling the money. So, you don’t have those issues. And they tend to be middle skill jobs, things you can train for that don’t require a college degree, and pay a pretty good wage. And so, that’s also helps people sustain this. So, the biggest successes I’ve seen have tended to be manufacturing, but it is not because it doesn’t work well in other industries.
Mike Blake: [00:39:24] So, are there best practices that have evolved in terms of onboarding a second chance employee? And I would have to imagine that needs to be treated or ought to be treated a little bit differently than your conventional garden variety employee. And if so, can you share kind of some tips in that regard?
Jeffrey Korzenik: [00:39:44] I think it’s a recognition that you need a little bit more flexibility because you don’t know what you don’t know. I’ll give you an example. CKS Packaging, another big packaging company based in Atlanta, but they’re in maybe a dozen other locations around the country. They started the program and like most goods manufacturing companies, they had a no show, no call, no job rule. And when they started this, they found that, an otherwise very good second chance employee didn’t show up and didn’t call.
Jeffrey Korzenik: [00:40:17] And the initial response, the H.R. person was, “Okay. We’ll terminate them.” And Lloyd Martin, the executive who led this program, said, “You know, I think we need to find out more.” And so, they went to visit him because they had helped the employee, helped him establish some housing, knocked on the door, and he was there. They said, “Why weren’t you in work?” And he said, “Well, I’m sick. You don’t want me to come in when I’m sick, do you? And I can put on a coat and I can come.” They said, “No. No. You did the right thing. Why didn’t you call?” And the gentleman said, “Mr. Lloyd, I don’t have a phone. I don’t have any friends with phones. In fact, I don’t really have any friends.” And that person is still there several years later.
Jeffrey Korzenik: [00:40:56] And that kind of flexibility and need to understand that there’s a lack of mentorship. Other areas of flexibility that can come up are things like policies that allow people to go visit parole officers or, better yet, create a space within the facility, especially if you have multiple employees who are on parole where parole officers can come to the facility and not disrupt the work day. Those are the kind of things that come up.
Mike Blake: [00:41:22] This borders on a legal question, but I’ll ask it anyway. If you want to beg off, you’re welcome to do so. But in your mind, do other employees have a right to know if a new hire, someone who they’ll be working next to and with, has a criminal record?
Jeffrey Korzenik: [00:41:38] No. No more than you have a right to know another employee’s medications or medical history. The reality is, in this day and age, companies that have second chance programs, I think people probably go on Google and see what they can find. But there is no employer/employee right to that kind of information.
Mike Blake: [00:42:00] We are talking to Jeffrey Korzenik, and the topic is, Should I hire former convicts? So, you know, we talked about onboarding, but then you started to touch upon this, and I do want to dig into it because I think this could really be interesting. People that are second chance employees, do they need to be managed, led, trained differently than somebody that does not have that prison experience in their background? And if so, what are some best practices to kind of get the most out of those people?
Jeffrey Korzenik: [00:42:32] You know, I don’t think necessarily. But you do need support networks for other things. If you’ve hired the person ready to turn their life around, you’ve got all sorts of great motivation and character. But it tends to be other things that get in the way. And those tend to be transportation, housing, just not knowing what they don’t know. One company that I’ve worked with, Cascade Engineering, makes available for their supervisors a poverty simulation, which I think is a great way to help sensitize supervisors to the challenges of being deeply poor. And that often characterizes this group.
Jeffrey Korzenik: [00:43:14] But, again, you know, it’s 19 million people, you might have someone who’s ten years out of incarceration, successfully rebuilt their life, who furthered their education. That’s just another employee. And it doesn’t need any special consideration other than the opportunity.
Mike Blake: [00:43:30] Heck, you may hire somebody that stole $10 billion, the feds only found nine. So, you know, they could be loaded and they’re just drawing something out of the Cayman Islands. So, you can’t necessarily make assumptions. But I love that. I’m going to Google that to see if there’s something like that out there. That poverty simulator, I think, is so important because as I studied decision making, one of the things I’ve learned is that being in poverty on average lowers one’s functional IQ by 10 to 15 percent. Simply by virtue of the fact that you’re in constant existential – not existential spiritual, but existential living and your family to live, that you become effectively 10 to 15 percent dumber on average. Which means some people become 40 percent dumber on average.
Jeffrey Korzenik: [00:44:23] And understanding that an environment does cause people to be less than their best selves and may make lousy decisions, I think, creates empathy and helps you understand where the employee is coming from. And, therefore, for example, that employee that didn’t have a phone. You got to take the time to check.
Jeffrey Korzenik: [00:44:49] I managed many people over the years – this was a reach – but I had something like 50 direct reports in this insane set up years ago. And it’s our responsibility as business people/managers to foster the growth of our employees. Give them pathways to being the best employee they can be. And that does require a sensitivity to where they’re starting from and giving them some runway to succeed.
Mike Blake: [00:45:21] A couple more questions before we let you go, we’ve talked a lot about the case for companies to give people that second chance, make that second chance higher. Can you think of a profile of a hiring manager or a company that maybe shouldn’t try to go down that path? Who’s a bad fit on the hiring side for the second chance employee?
Jeffrey Korzenik: [00:45:43] I don’t think there’s any real answer to that other than to note it’s a matter of commitment and recognition that this is an investment and will require a change of processes. So, it doesn’t matter the industry. But if you are just in transient and just not willing to make change and commit to this, it’s not going to work. It is important, though, that many businesses do have regulatory restrictions. I work for a bank, we are restricted in who we can hire. Defense contractors are another great example of that. But I always tell employers, check the specifics. Because, in general, people tend to think all doors are closed when it’s just some doors.
Mike Blake: [00:46:32] Yeah. You know, I’m kind of thinking, unfortunately, even in 2021, there are employers that treat labor in a way that I don’t agree with. They treat them as quasi-disposable. And you’ve kind of hinted upon this, but I’d like to underline it because I think it’s an important point. It sounds like what you’re saying is, if you’re trying to hire second chance employees because you just think you’re getting a great deal – and by a great deal, I’m going to use just an inflammatory term – getting slave or quasi-slave labor, that’s not going to work out well. Do something else.
Jeffrey Korzenik: [00:47:09] And it’s not going to work for the company in the long term because we’re coming into a new environment. We have never seen a labor shortage – and you referred to this earlier, Mike – of the likes that we are entering into and it’s going to persist for years and probably decades. And so, business models that assume there was this unending supply of cheap labor aren’t going to work anymore.
Mike Blake: [00:47:34] And, you know, you pointed something out that I kind of knew in the back of my mind, but I didn’t put together until now or until this discussion. I want to thank you for that. This is not new. This is simply an accelerating trend that we’ve seen since, at least, 2010, if not earlier. And it’s because of simple demographics. You know, we ain’t making people as quickly as we’re losing people in the labor force, basically. And since immigration, no matter what side of the issue you’re on, it’s a hot mess. That’s not going to come to our rescue.
Jeffrey Korzenik: [00:48:12] Well, and this declining birth rates and fertility is a global phenomenon, too. So, among developed countries, there’s only one country that has a fertility rate above even the replacement rate of its population, and that’s Israel. And there aren’t enough Israelis to go around for the world labor needs.
Mike Blake: [00:48:31] No. Their country is seven million, there’s only so much they can do. Jeffrey, this has been a fun conversation and very informative. And you have such great command of the subject matter. If somebody wants to contact you with a follow up question or maybe they want to talk about something that we didn’t get to, how can people contact you for more information?
Jeffrey Korzenik: [00:48:51] Sure. I have a contact form on my website. My website is jeffkorzenik.com. I do my best, I have gotten a lot busier with the book’s launch, but I do try to get back to people. Again, jeffkorzenik.com, which means you have to be able to spell Korzenik, K-O-R-Z-E-N-I-K. I’m the only Jeff Korzenik on the planet, so if you can spell the last name, you can find me.
Mike Blake: [00:49:14] All right. Well, that’s going to wrap it up for today’s program. I’d like to thank Jeff Korzenik so much for joining us and sharing his expertise with us. We’ll be exploring a new topic each week, so please tune in so that when you’re faced with the next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us that we can help them.If you like to engage with me on social media, with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.