Reference no: EM133015036

Overcrowding, skyrocketing costs, and high recidivism rates cripple the American penal system. But even with the nation's penitentiaries in such a state, at least one entrepreneur found a way to transform prisoners into productive members of society, both behind bars and on the outside. James Hooker is the founder and CEO of Televerde, a company that seeks businesses willing to buy complex, multimillion-dollar software from tech giants like Cisco, NetApp, and Hitachi. At the heart of Televerde's operation are 250 incarcerated women who work at four different call centers within the Arizona State Penitentiary in Perryville.

Purchased by Hooker in 1995, Televerde grew from a six-person call center running out of a trailer into a profitable operation taking in $12.1 million annually. Detractors claim that Hooker's unconventional staff is robbing law-abiding citizens of work in this already rough job market. But Hooker is quick to point out that the facts read differently. Televerde employees make the federal minimum wage of $7.25, with one-third of each prisoner's salary going back into the system for room and board. Also, the recidivism rate of Televerde alumni is amazingly low. Over the last 14 years only 11% of released Televerde employees have gone back to jail. This is remarkably better than the national average of 40% of female felons returning to custody within just three years. Alumni from the Perryville prison also come out with a heap of savings, averaging $15,000 per prisoner.

Hooker hires back approximately 25% of his former inmate staff after their release. Many obtain their high school diploma, a requirement for employment at Televerde, while incarcerated, with one former prisoner even going on to obtain her MBA at Arizona State University. Besides its contributions to the lives of its employees and the Perryville prison in general, Televerde simply runs a better operation than its competitors. In a study conducted comparing Televerde with a rival company, Televerde delivered five times as many high-quality leads than its competitor. Hooker attributes this to his staff, whom he claims are "50 times more motivated than someone on the outside."

Questions:

-Could the Televerde system work in other states?

-What is a key strength of the Televerde system?