Fagin and his group want Oliver Twist to join them because he's small and desperate; this will encourage him to be a better thief and make him suited for jobs that require a small person.

Oliver didn't have an easy life. His time in the workhouse and with the undertaker never provided proper nourishment, mentally or physically. As a result, he is a very small boy. His body is an asset to the thieves because not only can he fit into small spaces and squeeze through crowds, but he can go unnoticed.

Oliver's desperation is another factor that makes Fagin and the others want him. He needs resources and friends; Fagin's group can provide both. Desperate people are more willing to bend the rules and do things that aren't morally correct. They know that Oliver doesn't have much to lose but does have much to gain by working with them. It's clear they can intimidate him, like when he's questioned about being awake an hour before. Oliver is also somewhat naive and doesn't even realize they're thieves at first, which is another mark in his favor for them.