While the media has been full of talk of social webs, big data, the cloud, robotics, and artificial intelligence, it now seems that the technology most likely to transform the next decade of business is blockchain
The application of blockchain technology goes beyond just financial services, due to its ability to reduce transaction costs
Blockchain can help transform the talent and recruiting market in a variety of ways including verifying candidate credentials, standardizing global payroll, and reducing bias in the recruitment process
While the media has been full of talk of social webs, big data, the cloud, robotics, and artificial intelligence, it now seems that the technology most likely to transform the next decade of business is blockchain.
Blockchain, the technology behind cryptocurrencies like Bitcoin, is complex, but the idea is simple. At it’s most basic, blockchain is an immense global distributed ledger that runs on millions of devices and is open to anyone. Information and objects of value such as money, titles, deeds, music, art, intellectual property, can be moved and stored securely and privately. On the blockchain, trust and credibility are established between strangers through mass collaboration and clever code, as opposed to intermediaries such as banks, governments or tech companies.
So far, much of the hype around blockchains has concentrated on its potential to disrupt the financial services industry, by dropping the cost and complexity of financial transactions, improving transparency and regulation. However, the application of blockchain technology goes beyond just financial services, due to its ability to reduce transaction costs. For example, in the music industry where intermediaries capture almost all value and artists are the last to be paid, blockchain technology allows for the development of intelligent songs with smart contracts built in. This means artists can sell directly through consumers without going through a label or technology company, and royalties and licensing agreements would execute automatically and instantly, paying the artist first.
The Impact of Blockchain on the Contingent Talent Market
Countless studies have shown that hundreds of hours per year are wasted in firms with moderate hiring volumes in verifying credentials of candidates. In the gig economy, it’s even more difficult to verify worker claims, since workers may have many different assignments and may develop a variety of skills that are hard to document and verify. As the contingent workforce expands, the task of verifying credentials and experiences is only going to become more difficult. However, blockchain technology can help.
A blockchain is an encrypted digital ledger of records organized into groups called blocks and distributed over a network. The blocks are located on servers called nodes linked together (“chain”), thus decentralizing and sharing information across a network. When a new transaction occurs, the blockchain is authenticated across this network, before the transaction can be included in the next block on the chain. The agreement of each node is required to add the block into the chain, and only certain entities have a digital ID and can add specific types of information (for example, college grades and degrees). Each node has the same information and all nodes must agree. Trust is created because a copy of the chain showing every transaction is held by the entire network, so if someone tries to cheat the system, they can be identified. Additionally, 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. As such, a personal ID from a blockchain is completely secure and can be used in various ways from signing documents to verifying experience or employment.
Some of the potential benefits of blockchain in recruiting and HR are:
Other HR Applications of Blockchain
There are other HR applications of blockchain as well. Experts believe blockchain could have advantages for payroll, particularly for international payments. Global payroll is often costly and delayed since there are many intermediary banks and third parties involved in the process. Blockchain provides the ability to simplify and standardize payments by eliminating the middle man.
Blockchain could also be used for employee health information, learning records, or other information kept in HR databases, since it offers a higher level of security.
Blockchain can allow for a more private and potentially less bias-prone recruitment process. Current social networking or job-seeking sites give the candidate relatively little control over who sees his or her information; a candidate’s name, photo, employment and educational background are all available. A platform using blockchain would give candidates more control over who sees their details and which details are visible. This could make the process less biased, since a candidate can choose not to share details that reveal their race, gender or age. In industries that are more highly regulated and credentialed, such as healthcare, finance, and high technology, blockchain-enabled recruiting could be transformative.