A Labor Market Under Pressure
In today’s labor market, employers are facing a persistent challenge: finding and retaining reliable talent. Job openings remain high, turnover is costly, and competition for qualified candidates is fierce.
In many industries, turnover rates exceed 50% annually, forcing companies to rebuild large portions of their workforce every year. This constant churn is expensive, inefficient, and unsustainable.
The Real Cost of Turnover
Turnover is one of the most expensive challenges businesses face. Replacing an employee requires investments in recruiting, onboarding, and training that quickly add up.
While the average cost per hire is about $4,700, that figure only captures the transactional expense of filling a role. The true cost is far greater. When factoring lost productivity, ramp-up time, training, and operational disruption, replacing an employee can cost between 50% and 200% of their annual salary.
In other words, employers face unpredictable instability costs in addition to the cost of hiring someone.
Even modest inefficiencies add up over time. For a mid-sized company, research shows frequent onboarding cycles can easily translate into hundreds of thousands—or even millions—of dollars in lost productivity and increased labor costs each year.
Workforce instability is an issue that extends beyond the HR Department. It affects the core of a business.
But forward-thinking companies are discovering a powerful and often overlooked solution: fair chance hiring.
Expanding the Talent Pool
In the United States, roughly 1 in 3 adults, an estimated 70 to 80 million people, has a criminal record. Each year, over 600,000 individuals return from prison, with millions more navigating probation, parole, or past convictions while seeking stable employment. Many are excluded from traditional hiring pipelines.
At the same time, 61% of employers report ongoing difficulty finding and retaining committed, reliable talent.
These trends point to the same opportunity.
Companies that adopt fair chance hiring, often referred to as second chance hiring, immediately expand their candidate pool – helping them fill roles faster in a constrained labor market. When you consider the size of the fair chance talent pool, millions of people who are ready and able to work are excluded from traditional pipelines, this is one of the largest underutilized labor pools in the country.
For many, employment represents stability. It is the foundation for housing, family reunification, and long-term success. That urgency often translates into focus, accountability, and commitment, attributes employers look for in new hires.
Turning Risk into a Workforce Advantage
There is a persistent myth that hiring individuals with criminal records introduces risk. However, research consistently challenges that assumption:
- A 2023 Boston Consulting Group report found fair chance hiring is associated with higher productivity, increased employee engagement, stronger retention
- 85% of HR Professionals say justice-impacted employees perform as well as or better than other employee
In practice, employers frequently find that fair chance hires are dependable, capable and highly motivated to succeed.
Research also consistently shows that fair chance hiring can directly address turnover:
- Justice-impacted employees often demonstrate strong loyalty and motivation
- Fair chance employers report equal or improved retention rates
- Some studies show consistently lower turnover among justice-impacted employees
For employers, that translates into longer tenure and meaningful cost savings.
Stable employment also plays a major role in reducing recidivism. Employed individuals are significantly less likely to return to prison – 16% compared to 52% for those who are unemployed.
Additionally, fair chance employers may benefit from programs that provide tax incentives and risk protection, including:
- Work Opportunity Tax Credit (WOTC)
- Federal Bonding Program
- Certificate of Qualification for Employment (CQE) for candidates
What is the risk of continuing the current approach?
Between ongoing turnover, repeated hiring cycles, constant retraining, and operational inconsistency, risk in hiring is inevitable. Although fair chance hiring does not eliminate risk entirely, companies are finding that the perceived risk is often outweighed by the stability gained when structured onboarding, clear expectations, and intentional support guide efforts,,
From Hiring Strategy to Workforce Strategy
Fair chance hiring challenges the traditional assumption that hiring is simply about filling open roles. Instead, it reflects a broader shift in how organizations think about talent.
Rather than focusing only on filling immediate openings, companies that adopt this approach are developing loyal, engaged talent, building internal pipelines for advancement, reducing reliance on oversaturated labor markets, and creating a more resilient and adaptable workforce, one that’s more stable and better positioned to meet changing needs.
This doesn’t mean lowering standards. It means being more intentional about how people are brought into the organization and supported once they’re there.
Making this shift requires intentionality, including building partnerships with workforce development organizations to connect with prepared candidates, strengthen onboarding, and provide continuous support beyond the first day on the job.
These practices help employees gain traction more quickly and contribute more consistently, leading to stronger retention and performance over time.
Culture, Brand, and Market Position
Fair chance hiring also shapes how organizations operate and how they are perceived.
Employers and their teams are more likely to be engaged when their workplace culture is built on accountability and opportunity. Over time, this contributes to a culture grounded in contribution and development.
It also strengthens an organization’s reputation. Hiring practices reflect company values in a tangible way, influencing how employees, customers, and communities view the organization. Research by Society for Human Resource Management (SHRM) supports that sentiment:
- 66% of employees report feeling pride working for fair chance employers
- 82% of consumers are comfortable supporting fair chance businesses
In a market where both employees and consumers increasingly value purpose, this matters. And unlike marketing campaigns, this reputational differentiation is earned, not manufactured.
The Bottom Line
The business case for fair chance hiring is clear: Fair chance hiring addresses several core workforce challenges at once.
Fair chance hiring is a strategic workforce strategy that expands access to talent, helps reduce turnover, lowers long-term hiring costs, and supports a more stable workforce. It also connects individuals who are ready to work with employers willing to invest in their success.
This is a business decision grounded in outcomes. Companies that take this approach are widening their talent pool, improving retention, and positioning themselves to compete more effectively.
As labor markets continue to shift, organizations that take a broader approach to talent will be better prepared. Expanding where and how talent is sourced is quickly becoming a defining advantage.
By: Rayshun Holt – President, Beacon of Hope Business Alliance; Mary Sanderson – Employer Engagement Manager, City Gospel Mission; Courtney Daniels – Director, Center for Employment Opportunities
