In our priorities for government, we highlight the piloting of financial incentives as a key way that government can support business and encourage employers to recruit people leaving prison, people on probation and people with unspent convictions.
Many businesses are fearful of hiring people with a criminal record. 75% of companies admit to discriminating and not offering an applicant a job on the basis of them declaring a criminal record. This is often because of long-standing beliefs about their reliability and the risks they think they pose to a company’s public image. This comes at a cost to society; around a third of people claiming job seekers allowance have a criminal record.
We want the government recognise and champion those employers that are already employing people with convictions. Many companies have seen the benefits of campaigns like Ban the Box as a way of opening their recruitment up to a wider talent pool.
Yet there are many more companies that need to be encouraged to change their recruitment practices, and they need to be given the support to do so. So we believe the government should pilot financial incentives for those employers who actively employ people leaving prison and those on probation.
This is something that Unlock very much supports, and it’s something we’ve been calling for. As a charity that both helps individuals with convictions overcome the barriers and stigma associated with criminal records, as well as supporting employers to take people on, we think this is a really strong way in which government can encourage employers in this space.
Support for financial incentives
In December 2016, the Work and Pensions Committee recommended “that the Government pilot the reduction of National Insurance contributions for those employers who actively employ ex-offenders.”
The Conservative Manifesto in 2017 committed to it:
“We will also work to help those groups who have in the past found it difficult to get employment, by incentivising employers to take them on. So for businesses employing…those who have committed a crime but who have repaid their debt to society…we will offer a holiday on their employers’ National Insurance Contributions for a full year”
How could it work?
We believe there are merits in incentivising employers to look beyond the ‘offender’ label.
We support the idea of piloting a programme on reduced national insurance contributions. Put another way, we struggle to find a reason why it’s not a good idea. Employers are motivated to get more for less. Managed correctly, it could act as the right sort of driver to encourage employers that are not already supportive on employing people with convictions on the current business case. It could also further encourage those businesses already active to increase their activity.
It would need to encourage long-term sustainable employment, not successive short-term contracts for a single post to maximise financial benefit.
Careful consideration would need to be given as to the people that would fall under this type of initiative, to avoid an unintended consequence of more employers asking applicants for details of their criminal record. We would support incentives in employing people released from prison (where engagement has been made with individuals prior to release) or those with unspent convictions that are receiving support (such as from probation or service-delivery charities) where their criminal record is known to those supporting them. However, we would be concerned about any incentive that could undermine the efforts of Ban the Box to encourage employers to remove the declaration of unspent convictions at the application form stage of the recruitment process.
We are cautiously optimistic about this policy proposal – there are some potential unintended consequences, but that’s why we think it’s important that this is taken forward as a pilot, with the aim of encouraging employers to not only actively employ people with convictions, but also to demonstrate improvements to their recruitment practices and the removal of barriers towards criminal records.
How does this sit alongside Ban the Box?
There’s a risk that policy initiatives around financial incentives and Ban the Box could be seen to be sending conflicting messages. However, they can be consistent with one another:
- Both initiatives are designed to encourage employers to look at people with convictions as potential employees.
- Ban the Box delays any questions about criminal records until later in an application process, instead of on the initial application form. The principle is that employers judge people first on who they are now, rather than what they did in the past.
- Financial incentives can be focused on encouraging employers to proactively recruit people leaving prison, those on probation and those receiving support from charities and organisations where it is clear they have unspent convictions. In this context, the employer will already be aware (at a general level at least) that they have a criminal record. They can still consider the details later in the recruitment process, as they would do with any applicant.
- An employment could potentially both Ban the Box and benefit from financial incentives.
Is a national insurance holiday the right way forward?
National insurance holidays amount to a relatively low financial incentive to employers. Based on a salary of £17,000, the value to an employer will be around £1,250. It’s not a particularly generous subsidy, especially for lower earnings. It’s regressive in the sense that the employer benefit will be much higher for higher paid salary.
Work done by the Learning and Work Institute suggests that it’s better to have a flat cash subsidy, rather than a subsidy that applies to individual contributions. This stops the disadvantages of lower earnings.
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