Is the Open Hiring Movement Right for Your Organization?

March 1, 2021
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Author: Glenn Hunter

As the pandemic begins subsiding and the economy gathers steam, more employers are considering an approach called “open hiring” to help fill large numbers of entry-level positions. The unique concept does away with traditional hiring standbys like resumes, interviews, drug tests, background checks, previous experience and degrees. Instead, it focuses on the “human potential” of job candidates, who might include the homeless, those in recovery from addiction or the previously incarcerated.

Open hiring can lead to filling positions faster and lower employee turnover.

Open hiring obviously isn’t for every business, many of which require the use of background checks. But the unusual strategy could be a solution for certain industries – warehousing, distribution, manufacturing, retail and food services among them – that find it tough to recruit lots of front-line workers with minimal skills. It could also pave the way for hiring more diverse employees, a key priority for organizations these days.

One of the latest companies to adopt the niche hiring model is retailer The Body Shop. In 2019, it hired more than 200 seasonal workers at its Raleigh, North Carolina distribution center after asking just three questions: “Are you authorized to work in the United States?,” “Can you stand up for eight hours?” and “Can you lift over 50 pounds?” The results were so successful, the beauty-products company extended the model to hiring for its retail stores in February 2020.

The Body Shop got help setting up its program from open-hire pioneer Greyston Bakery of Yonkers, New York. Greyston, which provides bakery goods for major national food companies, has used the approach since the early 1980s. It hires bakers on a first-come, first-served basis, invests about $1,900 in soft and hard skills training for each one and connects those with healthcare, housing and childcare needs to available local resources.

Open-hire Employees Show a Lower Turnover Rate

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Proponents of open hiring stress that workers with criminal backgrounds, for example, don’t necessarily present an extra risk. In fact, they can perform better than non-offenders. In a five-year study of 500 ex-offenders it hired, John Hopkins Hospital in 2016 said those workers had a lower turnover rate during the first 40 months of employment when compared to its employees with no record.

Open-hire advocates also say there are no reductions in standards and performance expectations for employees hired in this manner.

“Open hiring does not mean no accountability,” Joe Kenner, Greyston’s CEO, said in a Harvard Business Review article. “All we have gotten rid of are the interviews and background checks. Food, safety and professional standards – all those must be met. This job is not a promise. It’s an opportunity. We have strict standards we need to adhere to for customers like Ben & Jerry’s, Unilever and Whole Foods, and expect all employees to meet those standards. We’re very strict about that.”

Cheri Garcia, whose Cornbread Hustle staffing agency finds jobs for workers in recovery or with criminal records, says her agency differs from “pure” open-hire shops by requiring job candidates to undergo interviews, drug tests and background checks. But in the last few weeks, Garcia says, she has received hundreds of pure open-hire requests for employees by “restoration companies” helping Texans clean up from the recent Arctic storms.

“Open hiring is not as scary as some might think,” Garcia says. “The worst thing might be, they show up incapable of working and you send them home.”

Approximately 77 million Americans, or 1 in 3 adults, have a criminal record, according to the National Conference of State Legislatures. These are a lot of potential workers who often have difficulty finding stable employment.

Related: White-Collar, Blue-Collar: The Job Market’s Highest and Lowest Paying Occupations

While some employers attracted to open hiring may be motivated mainly by social activism, the model can be a beneficial solution for businesses that need entry-level or manual laborers en masse and in a hurry. These benefits include:

  • Better retention. Giving people a chance who were previously shut out of the job market means they’re likely to be more engaged, appreciative and loyal employees.
  • More diversity. Open hiring leads to employing in large numbers people who’ve often been left out of the job market. This can create a more diverse workforce, resulting in fewer discrimination charges against the organization.
  • Brand enhancement. Consumers will probably view organizations that adopt an open-hire policy as contributing to the betterment of their community.

The trend toward more inclusive hiring will get something of a boost in December, when the federal Fair Chance Act goes into effect. Enacted in 2019 as part of the National Defense Authorization Act, the Fair Chance Act “bans the box” by barring federal agencies and contractors from asking applicants about their criminal histories until after a job offer is extended. The idea is to give the previously incarcerated a fairer shot at being hired without undue discrimination.

LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.