Blockchain and HR: why is it relevant and what use cases are there?

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Blockchain is a transformative technology that will embed itself into a wide array of business processes across all industries in the coming years. All businesses will benefit from being able to exchange value without the use of costly intermediaries while reducing the size of their back offices by automating payment and accounting processes.

Beyond the general use cases, blockchain will transform the HR landscape by bringing trust to the employee search process.

Blockchain technology is effective at establishing accurate records in a distributed system not controlled by any one entity. To make changes to information contained in a blockchain, the users of the network must first agree that the changes are valid.

The process of requiring consensus to amend records creates a shared database that thousands of people can access simultaneously and trust implicitly.

Currently, when HR firms review resumes presented by prospective employees they have no way of knowing if its contents are valid. There is nothing to prevent candidates from embellishing their accomplishments or completely fabricating their backgrounds. This adds tremendous strain to the hiring process because firms must first expend resources vetting the veracity of all claims being made.

Blockchain will allow firms to review candidate resumes with confidence that all of the information they are being presented with is valid, removing a time consuming and burdensome layer from the current hiring process.

Blockchain will give individuals the ability to create comprehensive and trustworthy profiles listing their education, employment, training and skillsets. HR firms will be able to search these blockchain-based profiles with unprecedented speed and efficiency to find candidates that meet their exact needs.

Instead of storing all of their information on platforms like Facebook and LinkedIn, profiles will be distributed on computers throughout the world in a secure manner such that no one individual or a company will be able to tamper with the data. The individual will be able to own this information and benefit from the network effects of blockchain.

At the same time, the consensus mechanisms native to blockchain technology will greatly hinder the ability of individuals to present fraudulent information.

Let’s take the presentation of one’s educational background for example. Currently, the assertion that someone graduated from a top university is merely an unsubstantiated claim. Once blockchain reaches mainstream adoption, it will be commonplace for institutions to issue digital diplomas, complete with cryptographically secure digital signatures from the institution. If an individual attempts to add the claim of graduating from an institution without a digital diploma, the network will reject it.

When the HR firm reviews the candidate, they do not have to question the information they are being presented with because the network would have rejected false information.

The verification of certificates like diplomas is just the tip of the iceberg. In the same way that an institution can verify that someone graduated, a former employer can attest that someone actually worked there. The days of calling references to confirm employment will be over. Beyond being able to simply validate an employee’s tenure, employers will be able to attest to individual achievements.

When an HR firm looks at a resume, claims of “improving company efficiency by 20%” will be less hollow because the claim can be cryptographically signed off on by the individual’s former employer. The same applies to training courses completed or accreditations earned.    

HR firms will also be able to search blockchain networks for specific skillsets. Individuals will be able to bolster their resumes by having their skills validated on the blockchain. Currently, every claim made on an employee’s resume has to be approached with a degree of skepticism.

On some platforms now, however, skills are validated through consensus before being added to a user’s profile. If someone claims they are a skilled graphic designer, they are required to demonstrate their proficiency by producing a unique design and submitting it to the network.

Other graphic designers then review the submission – if the majority attests to the user’s skill, it is added to the user’s profile.

By the time a prospective employer sees it, the authenticity of the claim has already been vetted.

The net result for HR firms will be a searchable database for prospective employees full of cryptographically validated information. When hiring managers search a site like LinkedIn or Monster.com, they are presented with a sea of unsubstantiated claims and potential misrepresentations – it is their responsibility to separate the true from the false.

When they search a blockchain network, the false has already been weeded out and only the truth remains. Hiring managers will receive a list of candidates that match their criteria without having to waste time questioning their credentials. 

With blockchain-based hiring tools, HR firms will be able to search vast pools of candidates with razor specificity. For example, a search for a financial executive that graduated from a top 5 University with 10+ years experience who lives within a 10-mile radius of London will yield candidates who fit that exact criteria.

Similarly, HR firms can search for highly specific skillsets, such as proficiency in a niche programming language. Intensive and costly recruitment efforts will be replaced with a process that more closely resembles using Google to find the best Italian restaurant within walking distance.

At the time of this writing, the blockchain capabilities described above are not yet available to HR organizations. They are however, on the horizon and firms that are proactive in understanding how they can best leverage this transformational technology will be the early benefactors.

The ones who are slow to adapt may be left behind.

About Gaurang Torvekar

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