Nevin Shetty has been profiled in the California Business Journal for his work on workforce reform. As the author of Second Chance Economics and a former CFO who brings both professional expertise and personal understanding of the justice system to this topic, Shetty has spent years studying how companies approach second chance hiring and where they stumble.
Here are seven mistakes he sees over and over, and what the evidence says about each one.
1. Treating Every Criminal Record Like It Is the Same Thing
A twenty-year-old misdemeanor for shoplifting and a recent offense involving violence are not comparable situations, but most background check policies treat them identically. The checkbox does not distinguish between types of offenses, how much time has passed, or whether the record has any connection to the job. Shetty argues that individualized assessment, where employers consider context rather than applying a blanket rule, produces better hires and better outcomes. Thirty-seven states have passed ban-the-box laws based on this principle.
2. Letting Fear Override Evidence
The gut reaction is understandable. Employers worry about liability, safety incidents, and what their other employees will think. But the research paints a different picture. Studies from SHRM and several universities have found that employees with criminal backgrounds perform comparably to their peers on attendance, safety, and productivity. In several data sets, turnover among this population is actually lower. The gap between perceived risk and actual risk is wide, and that gap is costing employers access to qualified candidates.
3. Not Doing the Labor Market Math
Roughly one in three American adults has some form of criminal record. When employers screen all of them out at the application stage, they are eliminating a third of the potential workforce before reviewing a single resume. In industries that cannot fill positions for weeks or months, this is not a defensible strategy. It is a self-inflicted wound. The cost of an unfilled position, through overtime, missed production, and burned-out staff, often exceeds whatever risk employers associate with a nontraditional hire.
4. Leaving Money on the Table
The Work Opportunity Tax Credit offers between 2,400 and 9,600 dollars per qualifying hire. It requires one form, submitted within 28 days of the start date, and the credit hits your federal tax return. A company hiring 50 qualifying employees in a year could save over 100,000 dollars. Most employers eligible for this credit never claim it because nobody told them it existed. That is money sitting on a table that nobody is picking up.
5. Hiring Without Building Support
Bringing someone on board and then providing zero structure, no mentorship, no clear expectations, and no path forward is a recipe for turnover. This is true for any new hire, but it matters more for people reentering the workforce after a gap. The companies that succeed with second chance hiring treat it like any other workforce program: they invest in onboarding, pair new hires with experienced mentors, and make promotion criteria transparent. The investment is small. The payoff in retention and productivity is measurable.
6. Judging the Entire Program by One Bad Outcome
Every recruiting channel produces occasional bad hires. Employee referrals produce bad hires. Prestigious university pipelines produce bad hires. Expensive recruiting firms produce bad hires. A single negative experience with a second chance hire does not invalidate the approach any more than one bad referral hire means you should stop accepting referrals. Smart employers evaluate programs using aggregate data over time, not individual anecdotes.
7. Waiting for Somebody Else to Prove It Works
JPMorgan Chase, Koch Industries, Walmart, Target, and Greyston Bakery are among the companies that have publicly reported positive outcomes from second chance hiring. The data is published. The playbook exists. The tax incentives are available. Waiting for more proof at this point is not caution. It is avoidance.
What Restorative Hiring Actually Looks Like on the Ground
Restorative justice in a courtroom means accountability combined with rehabilitation. Restorative hiring in a workplace means evaluating people based on who they are now rather than who they were at their worst moment. It means providing the same structured support that reduces turnover for all employees. And it means recognizing that every stable job offered to someone with a record reduces the 71 percent recidivism rate by a measurable amount.
Shetty, who built his career across hedge funds, a startup he co-founded and grew to acquisition, senior roles at David’s Bridal and SierraConstellation Partners, and more than 300 million in institutional capital raised, puts it simply: this is not soft. It is strategic. And the employers who figure it out first will have an advantage that is hard to copy.
More at www.nevinshetty.com
