When Dan Meyer and Richard Palmer, two consumer products veterans, started Nehemiah Manufacturing Company a decade ago, their idea was to create more opportunities in a struggling part of Cincinnati. Increasingly, that meant hiring people who had a particularly hard time finding jobs: those with criminal backgrounds.

Their Christian beliefs were a motivator; the pair named the company Nehemiah after an Old Testament prophet who helped rebuild Jerusalem. A family member’s struggles with substance abuse has also shaped Mr. Meyer’s willingness to offer workers more than one chance.

In their previous lives, Mr. Meyer had sold a business he founded to a private-equity company; part of Mr. Palmer’s work had focused on economic development. Both wanted to bring manufacturing jobs, which had moved to the suburbs, back to the city and partner with social-service agencies as a way to allow people a chance to work their way out of poverty.

Like many business owners with similar lofty aspirations, they quickly learned that offering a job to people trying to turn their lives around is just half the battle.

Privately held Nehemiah started hiring workers with a criminal record in 2011, about a year and a half after launch, at the request of a local nonprofit. The experiment got off to a rocky start. Many workers continued to struggle with substance abuse or mental illness and some were homeless. Some would take a break and never come back; others showed up one day, only to disappear the next.

“We didn’t understand all of the challenges,” says Dan Meyer, Nehemiah’s chief executive and veteran of Procter & Gamble Co. and Bristol-Myers Squibb.

At a loss, the company enlisted the support of a social-service worker to help employees with anything from finding housing to staying clean.

“They were thinking that providing jobs would fix things,” said Dana Merida, who initially provided social services for Nehemiah employees a few hours a week and now heads the company’s three-person social-service team. “If you are homeless, couch surfing, how productive can you be?” she said.

But Nehemiah learned from its early difficulties and has become more deliberate about identifying candidates who are likely to be good, reliable employees and has developed a more formal system for providing them with support.

Nehemiah’s hiring process typically includes a session with a member of the social-service team who scrutinizes applicants’ histories and current support systems. 

Only half of applicants make it through that initial screening, according to the company. Those that do are taken on as temporary workers and assigned a job coach who helps them understand employer expectations. They typically spend a week or more in a job-readiness program that includes classes on how to create a résumé, interview for a job and manage in the workplace. After a probation period of three to six months or so, about 60% of the temp workers are elevated to full-time employees.

Today, the company’s perks include a social-service team and an attorney. “We are investing in our employees in order to retain them,” says Richard Palmer, president of the firm. “It’s no different than tech companies bringing in lunch and a foosball table.”

Currently, Nehemiah’s annual turnover stands at roughly 15%, well below the 38.5% average for their industry, as reported by Mercer’s 2019 U.S. Turnover Survey. The company, whose brands include Boogie Wipes, Saline Soothers and other consumer products, says it had operating income of $5.7 million on sales of $59.4 million in 2018.

And their unorthodox hiring strategy has produced an unexpected but powerful business benefit. “We found that the population we were hiring who had criminal backgrounds were our most loyal people,” said Mr. Palmer. “When we were looking for people to work overtime, come in on Saturday or go that extra mile, it was the second-chance population that was saying, ‘I’m in.’”

Nehemiah’s thorough, patient approach to hiring allows it to spot candidates with potential that other employers might overlook. When Rayshun Holt came to Nehemiah roughly two years ago, Ms. Merida said he immediately stood out as someone the company wanted.

Having a steady job has helped Gina rebuild her relationship with her children, who were raised by her sister and grandmother. Her oldest daughter is now helping her study to obtain her GED. “It’s good for the kids to say they are proud of me,” she said.

“There’s a misconception that Nehemiah will hire anybody,” said Mr. Palmer. “No, we won’t. If we bring on somebody who is not ready to work, it will impact our operations.”

One job candidate had been drug-free for 25 days when he showed up at Nehemiah for an interview in the fall. “It was commendable; he had made changes,” said Basette Smith, the social-service team member assigned to the case. But Mr. Smith wasn’t ready to make him an offer. “I wanted a more stable history of treatments,” he said. “It’s not a ‘yes’ right now. It’s not a ‘no.’”

In the months since, the social-service team found the job applicant had showed up for just one drug-treatment session and didn’t get back in touch with the team, as requested. The door isn’t closed, but “it doesn’t bode well,” said Mr. Smith.

New hires must not only be job ready, Mr. Smith added, but also be prepared “for what life looks like as a working adult,” which includes everything from having a bank account to deposit paychecks to a support system and treatment plan.

Roughly 70% of Nehemiah’s employees have dealt with drug addiction or committed drug-related crimes. About a dozen have been fired after relapsing, said Michael Taylor, Nehemiah’s operations manager who has struggled with drug and alcohol addiction and was jailed for burglary.

At a previous job, Mr. Taylor was escorted off the premises by armed guards after the company determined he had lied about his past. “I wanted to make a change,” he said. On his first day, Mr. Meyer shook his hand.

The biggest challenge for Nehemiah employees, Mr. Taylor said, “is having them see value in themselves, the confidence that they can succeed. We did bad things, but we were never bad people.” He said employees support each other. “We tell our stories; we show our scars,” he said. “I will tell my story a million times if it helps one person.”

Excerpts from The Wall Street Journal article "The Company Of Second Chances" written by Ruth Simon with photographs by Andrew Spear published on January 25, 2020.