This article is a part of the All Things Talent Magazine (May 2018 Edition) – An Initiative By iimjobs.com | hirist.com
“If blockchain technology is widely adopted it will change how one can identify talent, track work history, verify backgrounds, engage and pay workers around the world.”
– Britt Montemayor
A new technology ‘seems to be’ bubbling up every day. Spotlight on these seems to be well deserved because it really takes decades to develop the concepts that lead to a new technology. Much of what is called AI has been developed from 1950’s concepts. Innovation takes time and often the more disruptive the technology, the longer it takes. With technology in general, the concept is created long before the actual development and application of the technology. Once a new technology is developed, it explodes in applications that rain in from every direction. Credit should be given to the young generations/millennials that trust technology more and are quick to try (and throw out) new things.
It seems that suddenly, everyone is talking about blockchain technology, the backbone of the first cryptocurrency, Bitcoin. The first illustration of a blockchain concept was in 1991, it took 17 years (in 2008) to get to what we call blockchain technology today. Since 2008, blockchain has become a very disruptive technology, making it possible for a new currency to be created that doesn’t involve banks or governments, which is a shock to the financial sector. Even though the talk of blockchain is very much in the air, rapid application and adoption are likely a few years away. How does this relate to the Talent Acquisition industry? If blockchain technology is widely adopted it will change how one can identify talent, track work history, verify backgrounds, engage and pay workers around the world.
“Everything will be tokenized and connected by a blockchain one day” – Fred Ehrsam
Blockchain Basics
Blockchain technology is often referred to as a distributed ledger or public ledger. Think of it as public spreadsheet only that it isn’t housed on a single server in the cloud, instead it’s housed on multiple servers at the same time and it’s heavily encrypted. It’s live, it can be built on from multiple sources, but every transaction must be verified by multiple sources to ensure that there are no false transactions (no mistakes or fraud). Once that data has been verified/ accepted, it cannot be changed. It is data that is anonymous in the transaction and can’t be falsified, which has some exciting possibilities when one thinks about compliance, HR, and talent acquisition.
Talent acquisition is challenged by identity, personal information security, data security, trust, and the decentralization of work. Additionally, one must comply with complex government regulations that change with the crossing of every border. Altogether the complexities of talent acquisition give everyone from lawyers to recruiters a headache. The development of blockchain technology is likely to relieve many of the talent acquisition headaches.
“In talent acquisition, smart contracts can be used in creating employment agreements, contract engagements and onboarding. Events like offer acceptance and issuing of paychecks will only be executed when certain conditions are met and parties verified.”
Every aspect of employment involves a transaction. Transactions take time to process, cost money, are vulnerable to hacking, have limited participation, require special skills, and can be error-prone. Another innovation of blockchain technology is smart contracts. In talent acquisition, smart contracts can be used in creating employment agreements, contract engagements, onboarding and access to buildings and secured data. It’s a process where little computer programs are built directly into the blockchain; events like offer acceptance and issuing of paychecks will only be executed when certain conditions are met and parties verified.
Even though the use of blockchain makes it possible for transactions to be anonymous due to encryption, the identity of the person behind the transaction is verified. A blockchain benefit to talent acquisition will be a verified unalterable identity. In talent acquisition, one depends on people being who they say they are and that they have accomplished what they say they have. To complete this, one also tends to work with background check companies that work with state & federal governments, educational institutions and previous employers. The process is long and can be subjective, and often contains errors or even loss of data.
Imagine a new way of hiring people where candidates have verified identities, education, and work history. Background checks would be eliminated, and onboarding would be faster. Quality of candidates would increase with verified education and experience. Verified work history can be added to a verified digital resume; dates can no longer be altered, titles and companies cannot be faked, education completion will be verified as well. Not everyone would be eager to sign up, but those who see value in reputation, and want less friction when finding employment will jump at the opportunity. Companies that embrace and promote the technology will be more efficient in hiring and placing talent.
Talent acquisition and human resources rely on mountains of data that is both personally identifiable and financially vulnerable. Currently, the data that is used to hire an employee is housed, along with all the data that it takes to pay the employee. Imagine if all one needed was the private digital key an employee is provided with to access their verified identity but none of the actual data. The employee keeps their data and reduces their and our exposure. Blockchain technology provides new ways to think about designing more secure data, having faster and more secure payment gateways, and a set of protocols, with distributed networks that create a new type of structure for information sharing.
Blockchain technology is not something that can be used in mainstream talent acquisition today. The approach must be careful, and technology companies need to do more prototyping and find where it can break in a safe environment. Ideally, with blockchain technology, businesses will be able to operate faster, more efficiently and more securely. This is a technology we need to watch because if they’re not asking already, our clients will be asking us if our systems support a secure blockchain technology and that question needs to answer intelligently.
“Blockchain technology provides new ways to think about designing more secure data, having faster and more secure payment gateways, and a set of protocols, with distributed networks that create a new type of structure for information sharing.”
In the meantime, I will imagine the day when a chip in my hand will unlock the office door, unlock my computer when my hand touches the mouse, lock again when I step away. A handshake using my verified identity will execute a contract or payment. You’ll want to hire me because my background information is continuously up to date, my resume is verified, and you don’t need my bank information to pay me.
