Blockchain for Human Resources and Recruitment

In the hiring and recruiting market, the biggest news of the last few months month has been the launch of Google Jobs into the US market. Following the Facebook jobs push, and the purchase of LinkedIn by Microsoft, what is left for the everyone else when there are competitors like these in the space? After 20 years of the internet the job of hiring talent or finding your next job is far from seamless, and in many ways the talent acquisition disruptions are still ahead of us.

It is very clear these days that the career paths have evolved. The instances of a job for life where a candidate would start in the mail room and work their way up to retire as the CEO are statistically zero. In the previous decade, a suitable candidate would have had a degree, and 3 or 4 previous employers, and this also is changing. Career ladders are becoming career webs and with the event of globalisation and ease of travel, these days a lot of those previous experiences are in foreign countries and in foreign languages, meaning it is requires official documents to be translated. Here lies another potential trap for recruiters as a mis-translation could change the meaning and context of the whole document.

As Paul Xuereb, Senior IT Manager AustralianSuper states: “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”

Even something as simple as having access to a current resume is complicated should a recruiter inadvertently send their customer an out of date resume. All of, which leads to its own problems and questions about trust, accountability and even ethics should an act of good faith ends up resulting in an employer looking at a candidate who is ‘not as advertised’

In summary:

  • It is important to be able to correctly and reliably identify jobseekers as well as for consumers to have control over their private information.
  • Difficult to validate credentials of the candidate, as resume fraud is very easy to achieve (there was a high profile case in Australia a few years ago when an executive at Myer lied about his background and credentials). With the movement of labour across borders, it’s even more difficult
  • Judging past performance is difficult as the resume and job history is controlled by job applicant
  • In highly skilled roles like IT an application could easily list skills and experience in over 20 technologies, which can’t all be validated in an interview or test
  • Labour onboarding and management: It does seem feasible to write smart contracts that automate some administration around high volume, low value jobs, particularly temp or contract roles. This could be labour agreements, payment, reporting obligations, tax payments, and so on

Enter the Blockchain which is a developing platform which is described by many as the Web 3.0 or the next generation of Internet.

The premise behind Blockchain is that a copy of a transactional ledger is shared between every node on a peer to peer network. This ledger is kept in sync through a consensus algorithm and updates are shared as each new block is processed and appended to the previous block. This is all encrypted for additional security.

If one node were to attempt to make false entries, it would be voted out by the other nodes and the fake data would be rejected.

“In an age when trust is both elusive and held at a high premium, blockchain’s appeal is soaring since it presents a way to confirm, validate and authenticate both values and events.”

What the blockchain is not, is a vast database of raw data open to all. Each blockchain protocol has a handling fee for processing each entry onto the blockchain. The more data that is included in the transaction the more expensive the handling fee. This means copying hours of video for example would be cost prohibitive and it is not needed.

Each entity, be it a person, a corporation, a product or part can be given a digital ID or passport and it is the relationship of these ID’s that is tracked on the Blockchain. The more that Blockchain is accepted and implemented, the richer the data for one digital ID will be. A university will have a digital ID which is accepted as genuine by the network.

“Getting a fake transcript is only a click away this is the reason why Universities are working towards an ‘Educational Passport’. This passport stores your student records on the blockchain, verified by your alma mater and accessible for potential employers in job interviews and other universities.” Gideon Aschwanden, Lecturer University of Melbourne

Qualifications and grades could be timestamped and recorded for each digital ID of every student. As the student enters the workforce and each employer validates the start date and end date. The footprint that digital ID will have will of course be unique and impossible to replicate making it much easier to verify.

So the golden bullet is here, when can we start to use this Blockchain? Well that is a trickier question. Currently the blockchain is going through the same market forces as video formats (Betamax and VHS). There are many different flavours of blockchain now, the biggest and well known is Bitcoin. What the shady currency that gangsters use to buy and sell illegal stuff? Well yes, that was the early perception and it has grown to hold nearly $40billion of value where banks and other legitimate institutions are developing their own bitcoin solutions. However, Bitcoin is very limited in what it can do — namely transfer bitcoins. Ethereum is another popular blockchain which differs in that it can attach a payload of code called a smart contract to each transaction which make it a lot more flexible and usable for real world transactions. Both Bitcoin and Ethereum are Public/permission-less blockchains meaning that anyone can read and send new data to the chain. This concept is a little bit of a step too far for current corporation thinking which sees more value in the traditional ring-fencing of data. As such there are versions of the blockchain which are called Private/Permissioned blockchains with versions like HyperLedger or Ripple. However, the scope of these are very limited to corporations and consortium.

There are some kinks to iron out, however it does seem like the current blockchain state is very like that of the internet back in the early 1990’s Where some forward thinkers were excited about possibilities of linking up computers on a network and sharing information and back then it was a very slow and text based. Even those proponents and visionaries might not have been able to see the world we live in today where the levels of connectivity and access together with the processing power of the smartphone have revolutionised our world. The next leap forward is coming finally the process of validating and authenticating the candidate sitting in front of you is going to become a whole lot easier.

What does this mean for those in HR and recruitment?

  • A new disruptive technology is emerging and it has reached a point of maturity that it will continue to develop into a full blown fabric for society much like the internet today
  • Individuals will have full control over their own data, to prevent misrepresentation
  • Recruiters and HR departments will have access to a candidate’s education, employment and training record that is accurate and hard if not impossible to falsify
  • Smart Contracts will be able to streamline a lot of the onboarding process, especially for high volume, high turn-over positions

The next steps would be to get familiar with this new technology to help steer the transition to the new world. What are your biggest pain points? How would you like the future of HR and Recruitment to look? How will Blockchain help your company?

Thanks to Paul Xuereb, Gideon Aschwanden, Rohan Chandler and Andy Baker for your input.

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