For some businesses, hiring the formerly incarcerated has helped ease labor woes

Editor’s note: This story has been updated to correct the name of Bernard Larry.

In these times of tight labor, one often-overlooked resource is the formerly incarcerated.

These are people who have served their time in the prison system and are reentering the workforce. Many of these individuals are looking for a chance to rehabilitate their lives and this is an opportunity not only for them but for suburban businesses looking for workers.

Of course, there are issues to consider: skills, transportation, transition to a business environment and potential concerns from existing staff. However, if done the right way, hiring the formerly incarcerated can be an excellent option for finding good workers. If you’re considering this, here are few things to keep in mind.

Leverage state and federal resources

Illinois has programs specifically targeted at residents who previously were in prison — or were part of the criminal justice system — and who need help getting jobs. The state offers a no-cost bonding insurance service program to help protect employers from employee dishonesty, theft or embezzlement. The state also offers a number of hiring credits as well as an employer tax credit of up to $600 based on wages paid to an ex-felon. There’s also the federal Work Opportunity Tax Credit where an employer can offset their taxes due by up to as much as $2,400 for when they hire someone who has been formerly incarcerated.

The Illinois Department of Human Services has a number of grant programs for both employers and employees — particularly in disadvantaged communities — to help acquire education, training, and employment-related skills. The state’s Department of Commerce has various funding programs to help businesses train workers, improve job quality and make investments that will increase job creation.

So yes, there are resources. But perhaps the biggest resource that Illinois offers is a network of intermediary organizations that can help facilitate the process of hiring the formerly incarcerated.

Use an intermediary

Transitioning from prison life back to the real world can be difficult, which is why it’s important for any employer to work with an intermediary. Illinois’ Re-Entry Employment Service Program publishes a list of vetted nonprofit agencies that provide legal aid, education and job training for formerly incarcerated workers and businesses that hire them. In addition to these resources, other Chicago-area nonprofit agencies are available to help.

For example, Phalanx Family Services — funded through the Chicago Cook Workforce Partnership — assists economically disadvantaged children and families to become self-sufficient, and oftentimes provides services to help the formerly incarcerated transition to the workforce. Intermediaries like Phalanx can help provide transportation for workers, training, counseling for both the formerly incarcerated and for your existing employees, as well as connecting you to other resources in the area. Another big benefit: Phalanx helps employers with compensation costs.

“Our agency subsidizes the wages for workers that are formerly incarcerated, which simply means that we pay their wages for a period of time through our grant fund,” says Laura Bailey, director of operations at Phalanx. “This allows our returning citizens to actually earn dollars with the hope that after the trial period the employer has opportunities for the worker to apply for long-term employment.”

John Munson, who owns Anchor Realty Group, a real estate broker with operations in Cook County, is among the hundreds of businesses and workers in the area that have taken advantage of Phalanx’s resources.

“This has been a great help for our business,” says Munson. “In addition to subsidizing wages, we’ve found that working with an organization like Phalanx can assist in mentoring workers through the process.”

Don't be afraid to fail

Hiring the formerly incarcerated is no different from hiring anyone else: sometimes things work out and sometimes they don’t. My best clients keep a close eye on new hires and are ready to make changes if things aren't working out.

“My advice would be to take a chance,” says Bernard Larry, general manager of Docks seafood restaurant. Larry says the hire ratio in the fast-food industry is challenging — out of every 10 people hired, his company may be able to keep four, and within those four maybe two for the long term. But to him, including someone out of prison helps reduce turnover.

“If you take a chance on someone who’s been formerly incarcerated, and they’re sincere about not returning to their old environment, they’ll be a great asset to the team,” he said.

Munson agrees and says those reentering the workforce from the prison system often are more dedicated than many of their existing employees.

“We’ve seen that a person with a criminal record will work harder and demonstrate what they can do,” Munson said. “They know they have that history and they want to make the best impression possible. Getting a second chance is important.”

• Gene Marks is a CPA who owns and operates The Marks Group PC, experts in customer relationship management technologies.