Letter from the Research Analyst: Recent Trends in Fair Chance Hiring (1/3)

Research Analyst Erika Folgar breaks down the latest fair chance hiring trends identified in FreeCap Financial’s 2023 Criminal Justice Report.  This post is part of a three-part expert series on FreeCap’s data findings. To be notified about future posts, follow our LinkedIn, and to read the full report, click here.  

What is Fair Chance Hiring? 

Fair Chance Hiring is a collection of policies and measures that employers can use to fairly evaluate and extend opportunities to individuals with histories of arrest and/or incarceration. At the heart of Fair Chance Hiring is the belief that every candidate, regardless of their background, has the right to be assessed based solely on their qualifications for the job rather than on their incarceration histories.

When social stigma around criminal history causes formerly incarcerated folk to be passed up job opportunities, their reintegration into society is made even more challenging. At the same time, companies miss out on benefits to their bottom line by not hiring them as formerly incarcerated employees demonstrate higher job retention rates. 

How We Measured Its Trends 

FreeCap uses four fair chance hiring metrics to identify companies' efforts to recruit and retain justice-involved workers. This is done by analyzing company hiring policies, diversity and inclusion efforts, background check policies, recruiting programs, and support for criminal justice. 

Through streamlining our data collection from ten metrics to seven, FreeCap’s insights offer more accurate information to investors while making it even clearer to companies what steps they can take to reduce their criminal justice footprint. 

FreeCap’s Findings 

• The five companies with the strongest Fair Chance Hiring policies are Alphabet Inc., Apple Inc., JP Morgan Chase & Co., Union Pacific Corp., and Walmart Inc. These companies received perfect scores on our fair chance hiring metrics.   

• Less than 1/3 of the S&P 100 have committed to hiring formerly incarcerated folk in 2023, a statistic that has remained consistent since 2021. 

• Only 6% of companies in the S&P 100 have developed programs to actively recruit formerly incarcerated workers. 

Fair Chance Hiring Leaders 

Our report also highlights companies that demonstrate particularly outstanding fair chance hiring practices. Here’s wo we highlighted:  

• Union Pacific is an outstanding leader in fair chance hiring, jumping to 5th place from 35th place in our rankings in just a year. They are a leader in fair chance hiring for actively recruiting justice-involved workers, being a member of the Second Chance Business Coalition and developing a pilot second chance hiring program in Houston, Texas. 

• We also highlight Apple as a case study for best practices in Fair Chance Hiring. They partnered with Houston Community College (HCC) to provide GED training and workforce education in four Harris County jails and partnered with tech nonprofit Recidiviz to assist 15,000 people after their release. 

Why This Matters  

While some companies, like Union Pacific, have made strong progress in their fair chance hiring practices, fair chance hiring progress in the S&P 100 remains stagnant.

This lack of development hurts both justice-involved workers and companies in need of loyal talent. Stable employment can help reduce recidivism, and studies also find that formerly incarcerated individuals make high-performing employees that exhibit high retention rates. 

What You Can Do 

To combat the effects of mass incarceration, it is crucial to direct money and resources toward change-makers and to call attention to those disregarding fair chance hiring practices. FreeCap invites you to join us in the fight to divest from prison labor and invest in freedom.  

While we’ve highlighted some important insights on fair chance hiring in the post, our full Criminal Justice Report brings unprecedented transparency to the criminal justice footprints of the 100 largest companies in the US. Our data subscription offering and custom benchmarking report also help you identify the companies in your portfolio that are leading and lagging in criminal justice reform.  

Erika Folgar is a Research Analyst at FreeCap Financial who works closely with FreeCap’s scoring methodology and co-wrote and edited the 2021 and 2023 Criminal Justice Report. Before her role as a Research Analyst, she graduated from Vassar College in May of 2022 with B.A. in Economics and correlates in Mathematics and Latin American Latinx Studies. In 2021, she received the Thompson Bartlett Fellowship for Economics to study at the University of Texas at Austin.