Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Company Built a Career Ladder for Formerly Incarcerated Talent
Transcript
- Lucas: So we talk a lot on this show about pipelines — how to get underrepresented talent in the door. But what happens after the door opens? That's where a company called Pivot Logistics did something really interesting. Luna: Pivot Logistics. I've heard of them. They're a midsize freight company, about 2,000 employees, mostly in the Midwest, right? Lucas: Exactly. And they decided to build a career ladder specifically for formerly incarcerated individuals. Not just a hiring initiative — a real path from warehouse associate to shift supervisor, with training, mentorship, and pay bumps at each level. Luna: That's a big shift from the typical approach, where someone with a record might get hired into an entry-level role but then hit a glass ceiling because of background check policies or lack of advancement opportunities. Lucas: Right. So the program started about two years ago. Pivot partnered with a nonprofit called Second Chance Works, which focuses on employment for people leaving the justice system. Together they designed a 12-week onboarding program — it's not just job training, it's also financial literacy, conflict resolution, and something they call 'workplace navigation skills.' Luna: Workplace navigation skills, meaning how to read an organization, who to ask for help, how to advocate for a promotion — that kind of soft-skill stuff that a lot of us take for granted. Lucas: Exactly. And here's the key structural piece: each new hire is paired with a peer mentor who's been with the company at least two years. The mentor gets a small stipend — 500 dollars per quarter — and they're responsible for helping the new hire understand unwritten rules and advocate for their first promotion. Luna: So the mentor is literally invested in the new hire's advancement. That's smart. Lucas: It is. And the numbers back it up. After one year, Pivot reported a 70% retention rate for this cohort. The industry average for entry-level warehouse positions is about 50%. Luna: That's a twenty-point gap. And I imagine the cost savings from reduced turnover more than offset the program costs. Lucas: That's exactly what they found. Pivot's HR team calculated that replacing a warehouse associate costs roughly 4,000 dollars when you factor in recruiting, training, and lost productivity. With a 20% improvement in retention, they're saving about 800 dollars per hire per year. Multiply that across 150 hires — that's 120,000 dollars annually. Luna: And that doesn't even include the intangibles — like a more experienced workforce, better team cohesion, and the PR benefit of being a second-chance employer. Lucas: Right. But let's talk about the advancement piece specifically. Pivot created a three-tier ladder: Warehouse Associate I, II, and III, then Shift Supervisor. Each tier has concrete requirements — things like completing a certain number of safety trainings, hitting productivity targets, and passing a skills assessment. Luna: So it's not subjective. It's not 'does your face fit.' It's measurable milestones. Lucas: Exactly. And they removed the automatic background check for internal promotions. So if someone has a prior conviction, it doesn't block them from moving up unless the role involves something like handling cash or sensitive data — and even then they evaluate it case by case. Luna: That's huge. Because a lot of companies will hire someone with a record into an entry-level role, but then when they apply for a promotion, the background check comes back and they're disqualified. That creates a dead end. Lucas: Right. And Pivot also adjusted their pay bands. Warehouse Associate I starts at 18 dollars an hour. Associate II is 20.50. Associate III is 23. And Shift Supervisor is 26 — with overtime available. So there's a real financial incentive to stay and move up. Luna: That's a 44% increase from entry-level to supervisor. That's meaningful. So what's been the biggest challenge for them? Lucas: The biggest challenge has been scale. They started with 30 hires in the first cohort. Now they're up to about 150 total, but they want to get to 500. The bottleneck is finding enough peer mentors who are willing and able to take on that role. Luna: So they're essentially capacity-constrained by their own culture. That's a good problem to have, but it's real. Lucas: Yeah. They've started offering the mentor stipend to anyone who completes a training program, not just existing employees. So they're now training some of the Associate II and III employees to become mentors themselves — creating a kind of multiplier effect. Luna: That's smart. And it also reinforces the ladder — because being a mentor is a leadership development opportunity that prepares people for supervisor roles. Lucas: Exactly. So the program is really self-reinforcing. And the results are getting noticed. Pivot's CFO recently said in an internal memo that the program has a positive net present value even in year one. That's rare for a talent initiative. Luna: I think one of the reasons it works is that it's not a charity play. It's a business strategy. They identified a labor shortage in warehouse roles, they found an underutilized talent pool, and they built a system to make that pool thrive. Lucas: Right. And it's not just about hiring — it's about retention and advancement. That's the difference between a one-off program and a sustainable pipeline. Luna: And I think there's a lesson here for any company that says 'we want to hire more formerly incarcerated people' but doesn't think about what happens after day one. Lucas: Totally. The onboarding, the mentorship, the clear path — those are the critical ingredients. Without them, you're just setting people up to fail. Luna: Yeah. And one thing I really appreciate about Pivot's approach is that they were transparent about the challenges. They published a report with their retention stats, the cost savings, and also the areas where they struggled — like mentor capacity and the time it takes to build trust with new hires. Lucas: That transparency is rare. Most companies share the wins and hide the struggles. But by being open about the hurdles, they're actually helping other organizations learn and avoid the same pitfalls. Luna: So if someone is listening and thinking about starting a similar program, what's the one piece of advice you'd give? Lucas: Start small. Don't try to build the whole ladder at once. Pivot started with one warehouse, 30 hires, and a handful of mentors. Prove the model works, then scale. And partner with a nonprofit that already has expertise in this space — don't try to reinvent the wheel. Luna: Solid advice. And honestly, if today's episode gave you a useful idea or helped you think about your own hiring practices, that's the kind of thing that makes this show worth doing. Lucas: Yeah, and if it was worth a coffee to you, there's a link — buy me a coffee dot com slash fexingo. No pressure, just a way to keep the show ad-free and focused on real stories like this one. Luna: Exactly. And speaking of real stories — Pivot is now exploring a similar program for their trucking division, where the driver shortage is even more acute. Lucas: Right. They're working with a different nonprofit to design a CDL training track specifically for formerly incarcerated individuals. It's still in pilot phase, but early indicators are promising. Luna: Interesting. So they're essentially applying the same playbook to a different role. That's a good sign that the model is replicable. Lucas: Exactly. And we'll keep an eye on that and report back. For now, I think the takeaway is clear: a career ladder isn't just a nice to have — it's a strategic tool for retention, culture, and business results. Luna: And it's one more way that companies can turn intention into action. Thanks for listening.