Why Blockchain May Change the Talent Market

Do you ever wonder how many hours are spent in verifying the credentials of candidates – many of whom have already been employed and have previously been vetted? While no one has an accurate figure, hundreds – even thousands – of hours per year are wasted in firms with even moderate hiring volume. Wouldn’t it be wonderful if there were a way to eliminate the need for constant re-verification? Wouldn’t it be nice to quickly know with certainty that the skills, qualifications, and experience the candidate lists are what they actually have?
As we move into the Gig Economy, new issues arise making it even harder to verify worker claims. Workers may have many different assignments and may develop a variety of skills and experiences that are hard to document and verify. They may have also taken self-learning or online programmes and through those have gained new skills and abilities. As the Contingent Workforce expands, the task of verifying credentials and experience will become more difficult
Paul Xuereb, Senior IT Manager AustralianSuper has said, “It would be great if we had a trusted service that we could check to validate that a candidate has the right skills, on the right systems and at the right organisations. This would greatly improve the process of screening candidates and reduce the amount of time spent by recruiters and hiring managers.”
Blockchain may come to the rescue – at least some leading edge thinkers are placing bets on its importance to the future of HR and many other disciplines.
Chronobank, an Australian startup, states that its purpose is to develop a “blockchain project aimed at disrupting the HR/recruitment/finance industry, similar to the way Uber revolutionised the taxi business.” They are exploring ways to use Smart Contracts (see below) for freelance workers.

What is Blockchain?

The blockchain is best known as the platform for buying and selling Bitcoins. It was developed for that purpose and has a short history of securing financial transactions. But it is also being used in other areas ranging from the law to HR. It is one of the ways being explored to verify credentials such as education, previous employment, skills, and other data frequently required by employers. Blockchain could eliminate resume fraud and increase the integrity of the recruiting process because it is inherently secure.
A blockchain is an encrypted digital ledger of records that are organised into groups of data called blocks and distributed over a network. The blocks are located on servers called nodes linked together, hence the term “chain.” In effect, Blockchain is a way of decentralising and sharing information across a network.
Whenever a new transaction occurs, the blockchain is authenticated across this network, before the transaction can be included in the next block on the chain. So, the agreement of each node is required to add the block into the chain. Only certain entities such as a specific person or corporation, have a digital ID and can add specific types of information (your grades and degree, for example). Each node on the network has the same information, and all nodes must agree.
The blockchain creates trust because a copy of the chain showing every transaction is held by the entire network. If someone tries to cheat the system, they can be identified. The data in a block cannot be changed or deleted only added to and if anyone were to attempt to make a false entry, the other nodes would not allow it and the false data would be rejected.
A personal ID from a blockchain is totally secure and can be used in lots of ways from signing legal documents to verifying employment or experience.

Benefits of Blockchain in Recruiting and HR

• It could eliminate the need for background checks, reference checks, educational and experience verification and so on.
• It would protect employee data from falsification and random change without the approval of everyone in the chain.
• Individuals would have control over their own data.
• It’s transparent and immutable. Data cannot be erased, only added. Anyone with the right key can access the data.
• It reduces wasted time and effort that add little to no value.
• Onboarding could be streamlined, especially for high volume, high turnover positions

It’s Already Happening

There are groups now exploring ways to verify resume and other data using Blockchain. In 2016 Recruit Technologies and Ascribe announced an alliance to create a blockchain system to make resume authentication automated. Ascribe specialises in protecting copyright data. I would imagine that ATS vendors and others will soon be joining this revolution.

An Additional Benefit: Smart Contracts

A smart contract is a computer programme that directly controls the transfer of digital currencies or assets between parties under certain conditions. A smart contract is very similar to a traditional contract with conditions, penalties and so on. A Smart Contract could, for example, time stamp a start date and trigger payments and then end payments on a certain date automatically according to whatever rules were agreed to. This could simplify and automate what is often a routine and repetitive processes, eliminate the need for lawyers, lower costs and increase speed.

Summary

Blockchain is a bit mysterious and hard to understand, but every day we are getting more familiar with it and will soon be using it for legal services, to secure everything from a home purchase to transferring money to your medical records. And it will creep into other areas as well including HR and recruitment. You can look forward to a time when background screening reference checks and verification of resume data are obsolete.
Cover image: Shutterstock

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