Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Company Made Prison Hiring a Career Pipeline
Transcript
- Lucas: Luna, I want to talk about a hiring pipeline that most companies won't touch. And I think that's exactly why it works. Luna: You're talking about hiring people with criminal records, aren't you? Lucas: Specifically, hiring people who are coming out of prison. There's a company in the Midwest — I'll call it Midstate Industrial, it's a manufacturer of industrial components — that has built a career pipeline around formerly incarcerated workers. And the results are kind of startling. Luna: Startling in a good way, I hope. Lucas: Yeah, startling in a good way. Their turnover rate among these hires is about 40 percent lower than their traditional hires. And they've been doing this for over five years now, so it's not a pilot or a PR stunt. Luna: Before we go deeper — if you're listening and you've found our conversations helpful for thinking through your own career decisions, consider supporting the show. It's listener-supported and ad-free, and that's only possible because of people like you. You can do that at buy me a coffee dot com slash fexingo. And now back to this pipeline. Lucas: Right. So the key question is: why would a manufacturer take what most HR departments see as a risk? And the answer is that the labor market in their area was incredibly tight. They couldn't find enough workers with the skills they needed, and they realized that a huge pool of talent was being ignored. Luna: So necessity became the mother of inclusion. Lucas: Exactly. They partnered with a nonprofit reentry program that provides pre-release training. Inmates start learning CNC machining and welding while still inside, and then upon release, they're placed directly into a job at Midstate. The company also provides a mentor for the first six months. Luna: And what about the legal liability? I know a lot of companies worry about negligent hiring claims. Lucas: That's the biggest objection, and it's worth addressing head-on. Midstate uses what's called the 'fair chance' hiring framework. They don't ask about criminal history until after a conditional job offer. And they do individualized assessments — not blanket bans. Plus, there's the federal bonding program, which essentially insures the employer against theft or dishonesty. That's free. It covers the first six months. Luna: I didn't know that existed. So the government is basically saying, 'We'll cover your risk.' Lucas: Exactly. And there are also tax credits. The Work Opportunity Tax Credit gives employers up to $2,400 per hire for certain ex-felons. For a manufacturer running on thin margins, that matters. But I think the bigger story is the career growth aspect. Midstate doesn't just hire these workers for entry-level jobs. They have a clear ladder: from operator to lead to supervisor. Several of their current shift supervisors started in the reentry program. Luna: So it's not just a job, it's a career path. That's a huge difference from the typical 'second chance' narrative where people end up in dead-end positions. Lucas: Right. And the company's own data shows that these employees are actually more likely to stay and get promoted than their peers who came through traditional channels. The theory is that they have a lot to lose and a lot to prove. They're motivated. And the company has invested in them from day one, so there's a sense of loyalty. Luna: I want to push back a little, though. There's a risk of exploitation here. If someone has few options, they might accept lower wages or worse conditions. How does Midstate ensure this is a fair deal? Lucas: Fair question. According to the company's public statements and the reentry nonprofit, starting wages are the same as for any other entry-level hire. They're not undercutting. And because the program is transparent — the nonprofit monitors outcomes — there's accountability. The average starting wage is around $18 an hour, which is competitive for that region in manufacturing. Luna: That's a living wage in much of the Midwest, especially with advancement potential. So what's the catch? Why aren't more companies doing this? Lucas: Stigma, mostly. And inertia. HR policies are often written to exclude anyone with a felony, even for jobs where it's irrelevant. There's also a misconception that the talent pool is too small or too risky. But the numbers tell a different story. According to the Society for Human Resource Management, about one in three American adults has some kind of criminal record. That's a massive talent pool. Luna: One in three. That's huge. And most of those are non-violent offenses. So companies are essentially cutting themselves off from a third of the workforce. Lucas: Exactly. And the labor market right now — July 2026 — is still tight in many skilled trades. The unemployment rate for manufacturing is around 3 percent. So companies that can tap into this pool have a genuine competitive advantage. Midstate has actually expanded its production capacity faster than its competitors because it can staff new lines. Luna: Let's talk about the broader ecosystem. What needs to be in place for this to work? It's not just about hiring, it's about support. Lucas: Yes. Midstate provides transportation assistance for the first three months — many of these workers don't have a driver's license or a car upon release. They also have an on-site social worker who helps with housing, healthcare, and even child support issues. That's a significant investment, but they see it as retention cost. It's cheaper than constantly recruiting and training new people. Luna: So the support infrastructure is actually a retention tool. That's a smart framing. Instead of seeing it as charity, they see it as talent management. Lucas: Right. And the employees themselves often become advocates. The company has a 'peer support' program where former reentry hires mentor new ones. That builds a culture of mutual accountability. One worker told a local news outlet, 'This is the first place that treated me like a person, not a number.' Luna: That's powerful. But I wonder about the downstream effects. Do these workers face stigma from coworkers? Or from customers? Lucas: Coworkers — initially, sometimes. But the company does training for all staff on fair chance hiring and unconscious bias. And because the program has been running for years, most of the workforce now has a colleague who came through it, and they see the results. As for customers, Midstate doesn't proactively disclose, and they don't have to. It's not relevant to the quality of the product. Luna: Makes sense. So what are the lessons for other companies? If I'm an HR leader listening, what's the first step? Lucas: First, review your hiring policies. If you have a blanket ban on hiring anyone with a criminal record, change it to a case-by-case assessment. Second, partner with a reentry nonprofit — they do the screening and training. Third, look into the federal bonding program and WOTC tax credits. Those offset the perceived risk. And fourth, think about support beyond the job: transportation, housing, mentorship. That's what turns a hire into a career. Luna: It's a playbook, really. And it's not just feel-good. It's got hard numbers behind it. Lucas: It does. Midstate's program has a 92 percent retention rate after one year, compared to 70 percent for their traditional hires. And they've filled over 200 positions this way. That's not a side project. That's a core talent strategy. Luna: I'm curious about the scale. Could this work in other industries? Like tech or finance? Lucas: It's harder in industries with strict licensing requirements. Finance, for example, often bans felons from certain roles. But in manufacturing, construction, logistics, hospitality — definitely. Some large companies like JPMorgan have already removed the college degree requirement and started second-chance hiring. But it's still rare. The potential is enormous if more companies adopt it. Luna: So the barrier is really mindset, not logistics. Lucas: I think so. And the data is there to support it. The question is whether HR leaders are willing to challenge their own assumptions about risk. Because the risk of not hiring from this pool is actually higher — you're missing out on a loyal, motivated workforce that can help you grow. Luna: Lucas, I think this is one of those episodes where we should leave listeners with a question. If you're an employer, what's stopping you? And if you're a job seeker with a record, how do you find companies like Midstate? Lucas: Good note. There are resources like the National Employment Law Project and the Fair Chance Business Pledge. And the reentry nonprofits in your area are the best starting point. For employers, the path is clear. The only missing piece is the will to try.