Posted in Small Business Hacks | by: Kinjal Dagli Shah

Why This Small Business Owner Only Hires Ex-Felons

Last year, Alex Shandrovsky made a surprising hiring move at L’chaim Foods, his San Francisco-based catering company. He hired three ex-felons. Today, those three people are his Director of Operations, Sous Chef, and Executive Chef.  

As a Russian-Jewish immigrant, Shandrovsky found he had a lot in common with people who had criminal histories. “An ex-felon is like an immigrant upon their release,” he says. “They are struggling to reintegrate to a new culture and world. They have to rely on family, hard work, and grit to survive and thrive. As immigrants, we’ve seen things and we know what the fight for survival is like.”

Sound unconventional? It sure is. But taking a chance with an overlooked talent pool has done wonders for Shandrovsky’s small business, which has raked in $1 million in annual revenue since the partnership—a 51 percent increase from last year.

In fact, Shandrovsky attributes his double-digit growth to those three talented hires, who have transformed L’chaim Foods while rebuilding their lives post-prison.

“I am able to focus on what I do best: business development,” says Shandrovsky. “By delegating work to a committed partner who is not just a clock-in-clock-out type of employee, it makes a huge difference.”

Shandrovsky shares his hiring framework to help other small businesses explore the same meaningful—and extremely underutilized—candidate pool.

First, get over the initial shock factor.

“It seems counterintuitive but you have to open your heart and mind to the concept,” says Shandrovsky. “Where else will you find street-smart people who know how to give it their all?”

For many businesses in the food industry, reformed prisoners are a worthwhile candidate group to talk to. Considering that 8.1 percent of the voting-age population has a criminal background, that’s a lot of people who have valuable skills to bring to the table. And in exchange for giving them a shot, you get their loyalty.

 

L'chaim Foods San Francisco - hiring ex-felons

 

Research also points to several character traits that ex-felons possess because of their unique background. They include strong interpersonal skills, a rigorous work ethic, and being more comfortable with failure.

Beyond these traits, there’s also a tax break small businesses can claim when hiring ex-felons, called the Work Opportunity Tax Credit. “The maximum tax credit ranges from $1,200 to $9,600, depending on the employee hired,” Shandrovsky explains.

Then, use this guide.

1. Don’t hire blindly.

Shandrovsky recommends to partner with a local non-profit that specializes in prison reform. For him, this was the Delancey Street Foundation, an organization that works with ex-felons, ex-gang members, and substance abusers.

Delancey Street has a restaurant staffed by people from the program, which is how Shandrovsky first got wind of them. He then spent three immersive days at Delancey Street learning about the ex-felon community and what it would be like to hire someone with a criminal background. “I knew it was the place to find the people who would lead my company to greater success.”

Finding an organization that already has a program in place can help connect you with ex-convicts who are looking—and ready—for work after serving time. Here are a few places to start your search:

2. It may sound crazy, but look for people with longer sentences.

Shandrovsky specifically looks for what he calls ‘lifers,’ or those who were in prison for 10-25 years. In other words, he avoids first-time offenders.

“A longer prison term means they were successful at what they did before they got to prison,” he explains. “Typically, these are the kingpins whose crimes are related to drugs. It involves running an operation, dealing with suppliers and distributors to sell and resell the product. Only, it’s illegal. These same skill sets can come in very useful for a legal business.”

Shandrovsky also believes ‘lifers’ are more likely to seek meaningful work. The world they left behind significantly changed when they re-entered society, so they’re primed to make a more drastic change.

3. Ask these 4 interview questions.

Once the pool of candidates is narrowed down, Shandrovsky conducts the interviews.

Here’s the list of questions he uses to vet people:

1. Which mentors are able to vouch for you? (A reference check will help you get a feel for a person’s character.)

2. What transferable skills have you learned while in prison? What skills have you learned before prison? (The person you’re talking to has a unique background. Find out the top skills that would be useful at your business.)

3. Who are the five people that you associate with most? (“This question helps me understand their current social circle,” Shandrovsky explains.)

4. How can you bring the total range of your skills and history to this company? (This question helps you see how your candidate is thinking about adding value to your business.)

4. Offer a stake in your company—and a six-month trial period.

Shandrovsky has another remarkable twist up his sleeve—he makes new hires partners. One of his teammates is a full partner and the others are on track to become partners by end of year.

He believes that when you give people a partnership instead of hiring them as traditional employees, it makes them more accountable. It turns them into actual owners.

Says his Director of Operations, “It is empowering knowing that I own what I create. It gives me a greater sense of pride and responsibility.”

Shandrovsky offers his ex-felon hires a traditional S Corp partnership. It includes a vesting schedule of six months, which means that for every six months they stay with L’chaim Foods, they get an extra percentage of equity, or a bigger stake in the company.

 

L'chaim Foods San Francisco - hiring ex-felons

 

When someone owns a part of the company, they walk with a straight back and feel like ‘I have a piece of this.’ There is a risk associated with this model but the retention rate is high,” Shandrovsky says.

However, he also proceeds with caution. In his employment agreement, Shandrovsky includes this line:

  • If you are charged with a crime while you are an employee of L’chaim, you will forfeit your vested equity share.” 

This tough-love approach is common among programs that help people acclimate to life after prison. It helps protect both the organization and the participants.

5. Don’t be afraid to take some precautions.

Bringing on people who have spent time in jail can naturally make some folks fearful. “How do I build trust in my company by hiring people who have betrayed the trust of society?” asks Shandrovsky.

However, a few safety precautions will make you and your customers more comfortable with the decision.

  • Don’t store credit card information.
  • Send invoices through secure software programs.
  • Get digital fingerprints of everyone on staff.

Shandrovsky feels good about the core team he’s built and what they’ve been able to achieve together. He is also aware that his choices will be questioned and he may even lose some customers in the process. But to him, it’s worth the risk.

“I haven’t spoken about partnering with ex-felons publicly until now, but I know that customers will have questions. I’m ready to answer them.”

________________

Shandrovsky started with a feeling that he could turn a few people’s lives around—people who reminded him of the world he came from. But he never imagined they would end up taking his business to exactly where he wanted to be.

About Kinjal Dagli Shah

Kinjal Dagli Shah is a writer and journalist living in Toronto. She has worked in newsrooms in India, the US, and Canada over a span of 15 years and counting.