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Second Chance Hiring is Viable Solution to Worker Shortage

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Tired of talking heads spouting words and statistics? I am. State the facts, state the problem, and give me some options.

The job market may get much tighter — the unemployment rate in February was 3.8 percent. Pennsylvania has a long- term worker shortage and demographic problems: a contracting workforce, an older population and weak population growth below the national average. In 10 years, Baby Boomers will walk out the door.

Larger companies are hiring thousands of workers, luring them with generous wages, benefits, bonuses etc., creating a huge problem for smaller companies. Target recently announced starting wages of $15 to $24 per hour.

Pennsylvania employers will have to figure it out. We are not China where President Xi Jinping aims to create more workers by lifting the ban on the one-child per family limit.

Employers can consider creative solutions such as making their workers more productive through technology, robotics, automation, and re-thinking credential requirements for hiring.

Employers also can look beyond traditional labor pools and train underutilized workers. Some have stepped up efforts to hire the disabled and those from nontraditional backgrounds and with criminal records. Re-entrants are an underutilized talent pool and can be trained and rehabilitated for a productive re-entry into the workforce.

According to mycleanslatepa.com, “In Pennsylvania nearly one in three — or 3 million — people have a criminal record. Many have only minor convictions, while others have been arrested but never even convicted of a crime.”

A number of large corporations, including Best Buy and Home Depot, have successfully hired re-entrants and have formed the Second Chance Business Coalition.

The MBA held a program, “How to Tap into the Hidden Workforce: Learn from Experts,” on March 17 in Cranberry Township to explain the process of Second Chance Hiring, or re-entry hiring, of formerly incarcerated individuals. Employers willing to try may find a pipeline of engaged and loyal employees.

Several key questions addressed include:

Are re-entrants trustworthy? Employers look for capable and reliable workers. Hiring any worker off the street — not a re-entrant — can give you nothing but trouble. Second chance hiring is like hiring any employee. It is a weeding process to uncover undesirable personality and traits.

Are there liability protections and financial incentives? Federal bonding insurance is available for liability protection, providing a business insurance policy that protects employers against loss of money or property due to employee dishonesty. The bond is good for six months up to the amount of $5,000 at no cost. PA Work Opportunity Tax Credits provide up to $2,400 (25 percent off the first year’s qualified wages of up to $6,000) in tax relief for each qualifying hire who works at least 400 hours.

How do I go about hiring? Schedule a meeting with Dorenda Hamarlund, one of the speakers at the MBA’s briefing. Representing the PA Department of Corrections, she is a workforce development specialist and the point person for employers. Before speaking with her, create a job description with location of work site, specific job skills needed, work requirements and include what type of re-entrants, given their background, will fit well into the workplace. Set a trial test period, designate a mentor, and establish a living wage for the potential hire.

Obviously, this is an oversimplification of a complex process. Look at it this way: We are now at the bottom rung of the ladder in western Pennsylvania. The Commonwealth can’t achieve strong economic growth over the long-term without an expansion of the labor force. Once lawmakers see employers’ success with Second Chance Hiring, then the policies required can be created such as innovative reforms to liability, more relevant training in correctional institutions, and existing policies, such as occupational licensure, can be revised.

If you are interested in learning more, contact Eileen Anderson at eileenanderson@mbausa.org.