Exploring the issues that arise from a lack of trust and transparency when screening potential employees, this article by Gaurang Torvekar, Co-Founder and CEO at Indorse, discusses the potential groundbreaking solutions that blockchain can bring to the spaceÂ
In the coming years, a wave of technological innovations will disrupt and change the current HR landscape. While big data and artificial intelligence will likely shake things up, blockchain technology has the potential to deliver the biggest impact by revolutionizing the way data is shared, used, and ultimately, trusted.
Blockchain was created to keep track of Bitcoin transactions between strangers over the Internet. It was soon realized that this technology was a revolutionary new way for creating trust between large groups of anonymous users without the use of intermediaries. Blockchain solutions are currently being developed across all major industries, and HR is no exception – firms that are proactive in understanding the implications of this ground breaking technology will be well positioned to benefit from it in the future. Firms that are slow to adopt it may find themselves left behind.
“The technology most likely to change the next decade of business is not the social web, big data, the cloud, robotics or even artificial intelligence. It’s the blockchain technology behind digital currencies like bitcoinâ€
— Don Tapscott, Author of Blockchain Revolution Â
Simply put, a blockchain is a new kind of distributed ledger that is shared among a network of computers. To make changes to the information contained in the ledger, the users of the network must first agree that the changes are valid. The process of requiring consensus to make updates ensures that no single person or entity has complete control over the contents within the ledger. The end result is a shared record that thousands of people can access simultaneously and trust implicitly.
Blockchain technology will transform the HR landscape because it can be used to solve a fundamental problem that organizations face when screening and hiring new employees.
**Imagine a world where you can look at an employee’s resume with near certainty that everything on it is factual. That is what blockchain technology aims to deliver to the hiring process**.
A survey conducted by CareerBuilderOpens a new window among 2,188 hiring managers found that 58% had caught prospective employees lying on their resume. The inability to trust the basic information presented on resumes and cover letters adds a massive strain to the entire hiring process. The majority of the managers in the survey reported the need to have resumes vetted by multiple people. The problem remains that no matter how much time you spend trying to weed out false information, there’s no way to know with certainty… before blockchain.
With blockchain technology, there are methods already developed that will let hiring managers know with absolute certainty that every item on prospective employees resume is valid. Let’s take a college degree as an example. Currently, the assertion that a prospect graduated from Harvard is nothing more than words on a page. In the coming years, it will be common practice for candidates to present digital diplomas from their University that are complete with a digital signature from the Institution. Just as the Bitcoin blockchain makes it impossible to spend Bitcoins that you don’t have, blockchain technology will make it impossible to present a valid digital diploma from Harvard that you didn’t earn.
Validation of credentials via the blockchain isn’t just limited to certificates. The same processes can be applied to employment history and even individual skills. HR firms that utilize blockchain technology will have access to entire employee profiles that have been validated by consensus and thus can be trusted.
Blockchain technology can remove an entire layer of the hiring process that only exists due to the limitations of the current tools available to HR firms. When employers do not have to waste time and effort determining the validity of a prospect’s credentials, they can spend time on more important aspects of the hiring process. They can spend more effort evaluating a person’s fit within their corporate culture and on assessing how a candidate’s aspirations align with the company’s goals.
**Blockchain can also replace current intermediaries in the HR landscape like headhunters. Organizations hire recruiters because they don’t have the internal resources to vet employees themselves**. With blockchain based recruiting, firms don’t need to vet employees – they search trusted data sources to find exactly what they are looking for. When firms have access to thousands of potential candidate profiles whose contents have been validated on the blockchain, a search for a highly specific skill begins to look more like searching Google for the nearest pizzeria. Once again, an existing layer of the current hiring process is removed completely. Hiring managers no longer have to spend time and money just to find a pool of candidates that have a specific skill – the process starts by finding the right employee among a pool of prospects that all verifiably have the skill that is needed.
Blockchain technology will bring on the next major wave of HR innovation. When firms can trust the information that candidates present them with, they can significantly reduce their hiring costs by removing intermediaries and spending time on the things that matter – quality of the candidate rather than the veracity of the claims on their resume.