Is blockchain – the technology behind cryptocurrencies – is a big tech trend to watch in the HR sector?
Blockchain strategy advisor Simon Read explains what it is and what HR leaders need to know.
Video killed the radio star – will blockchain have the same impact on the likes of Linkedin? Some think so.
It might seem like an outlandish statement today, but blockchain technology is, in theory, perfectly capable of making resumes and career networking sites like LinkedIn obsolete.
Instead of applicants writing a CV, blockchain transactions could simply store all their employment history.
Will that really happen though? To understand that fully, we need to take a step back and understand a bit more about blockchain and its potential opportunity in the HR and recruitment sector.
Here comes the technical bit.
Blockchain is a way of capturing, storing and exchanging information digitally and securely. It’s a chain of digital records – called ‘blocks’ – linked permanently using a scrambled language process known as cryptography.
Blockchains are a form of shared database, like a public record, or restricted access-only record in some cases.
If I were to transfer something to you, we’d both make a note in our ledgers, and everybody else involved in the blockchain makes a note in theirs. There’s a network of transactions recorded known as an ‘irrefutable ledger’. Once the information is recorded onto a blockchain, it’s permanent and tamperproof.
Most of us associate the use of Bitcoin with blockchain, but blockchain as a system can be applied in a wide range of applications beyond trading cryptocurrencies. We’re starting to see it used for recording property deeds, health records, and qualifications.
In HR, blockchain can be used to validate information more quickly and accurately.
For example, I recently completed a blockchain strategy program with the University of Oxford. As well as giving me a paper copy of my certificate, they emailed me a PDF of the certificate and recorded that electronic certificate on a blockchain.
If I wanted a future client or employer to check my credentials, I could send them the blockchain link.
I can see blockchain technology being used to capture and store qualifications in a way that allows prospective employers or recruitment agencies to check things quickly, and accurately. It could also be used to store people’s references and employment history.
There are, in fact, a few examples of organizations with existing HR services using blockchain already.
For example, HireMatch connects job seekers and job finders using blockchain and its own cryptocurrency called ‘HIRE’. It’s a decentralized employment marketplace that doesn’t rely on traditional recruiters or head-hunters, reducing the cost to acquire new employees.
APPII offers employee background checks and CV verification underpinned by blockchain technology. Individuals can create a personalized profile to showcase their verified achievements, qualifications, experience and aspirations, so potential employers don’t have to verify the information.
Finally, Ouna is an online assessment tool that optimally matches the talents and characteristics of an applicant to the best fitting position, while maintaining full anonymity.
The main benefit for the HR sector is the cost savings.
Reference checking is an integral part of the recruitment process. It’s often outsourced and can cost around £200-£300 per check. If you could go straight into a blockchain record for a prospective employer and check their references online, that would represent an enormous cost and time saving.
Blockchain also reduces the risk of human error, and creates a secure, permanent record that cannot be disputed.
In addition, blockchain offers a more efficient, streamlined way of securing and checking People data and could act as a permanent record for employment disputes and employee interactions.
Blockchain is safe and secure as it resists data modification. Using cryptography, it’s mathematically secured, similarly to how your credit card details are secured via an online payment.
It’s very early stages for blockchain being used for HR applications; but it’ll mature slowly.
The barrier to adoption will be the fear of the technology. Trust takes time and will only come as people start to use the technology, become comfortable with it, and share their experiences using it with others.
If HR and People leaders start preparing their organizations for blockchain, the first part of the process is to make employers and senior management aware of blockchain and what it can do.
For example, I talk to senior executives within companies that aren’t aware of blockchain. They know it’s something important because they’ve been told it is, but they don’t necessarily understand how it relates to them and their organization.
So, there’s an education piece that needs to happen before the widespread use of blockchain within HR will happen.
Take the time to learn about blockchain, then you’ll have a clearer understanding of its capabilities and perhaps have a stab at trying something small so you can get to grips with it.
For example. perhaps buying a fraction of a cryptocurrency just to understand how a blockchain transaction works would be a great way to dip your toe in.
Blockchain might seem daunting to some, because it’s the unknown. Learn about it now, though, and it could be a handy skill for HR and People leaders in the future.
About Simon Read
Simon Read is a founder of Kwiktrust. He is a blockchain strategy advisor, involved in blockchain projects in due diligence, digital media and entertainment. He is also a mentor for We in Social Tech – a growth accelerator program created to support 60 ambitious women-led social tech businesses over two years. Connect with Simon on LinkedIn.