Although the very mention of blockchain is often met with a sense of intrigue and mystery within HR departments around the world, there’s little doubt that the technology has the potential to make a big difference throughout the industry and beyond–particularly when it comes to optimizing the recruitment process.
Blockchain technology first emerged in 2009 along with the launch of Bitcoin, the cryptocurrency that became the world’s favorite form of digital finance.
“Blockchain is a distributed and secure database,” surmises Phil Aldridge, chief technology officer at Peoplewave. “It records and stores every transaction that occurs in the network, and each new transaction is added only after being verified by the network. This creates a “historical ledger” of authenticated and trustworthy data.”
Furthermore, Precedence Research data suggests that the blockchain IoT market size alone is set to grow to almost $2 billion by the end of the decade–with a sprawling volume of use cases likely to emerge as a result.
While blockchain appears to be a natural fit for a broad range of sectors, particularly that of finance, cybersecurity, and logistics, the potential application of the technology in HR roles can’t be underestimated. Let’s take a deeper look at how blockchain and recruitment may forge the perfect partnership as the age of Web 3.0 dawns upon the industry:
Pairing Blockchain with Recruitment
The reason that blockchain has the potential to build a successful relationship with the world of recruitment is that it acts as a public distributed digital ledger, or record of transactions that can be programmed to securely keep a record of just about anything that holds value. Fundamentally, blockchain is the world’s most secure track of records.
Furthermore, blockchains are immutable, which means that data stored is impossible to hack, steal, or modify on the chain.
When data such as an individual’s employment history, school record, or any other relevant information is stored securely on the blockchain, for instance, it could be a significant step for the world of recruitment.
Crucially, studies have shown that millennials typically change their employer once every 2.8 years. These ‘wrong’ hires cost businesses an average of almost $14,900, but blockchain-based hiring can help to ease this process through instilling greater transparency.
Not only can blockchain help to verify the best candidates, it can also eliminate factors like misrepresentation. It also has the potential to automate the onboarding process, saving businesses time and money.
True Candidate Transparency
Let’s take a closer look at the topic of employer/employee transparency. Blockchain empowers all parties to gain secure access to authenticated records, whereby applications can be viewed in real-time with consent-based verification of education levels, accolades, and employment history.
These validated credentials could either be recorded directly onto the blockchain, or they could be represented by non-fungible tokens, which would be awarded to individuals on completion of an educational course or training.
There can be a wide range of details recorded and stored via the use of blockchains, including:
- Educational history
- Employment history
- Criminal background checks
- Relevant licenses and certifications
- Driver records
The process of enabling recruiters to gain the necessary permissions to access a candidate’s credentials can take just a matter of seconds, helping to streamline the vetting process when looking for new talent.
Blockchain can enable companies to automate their onboarding process. This can help to eliminate repetitive tasks geared towards preparing new recruits and instead focus on other manual processes.
Thanks to blockchain applications, businesses can save time whilst also ensuring the safety of their new recruits. Powered by artificial intelligence, this automation can instantly perform the necessary safety background checks and explore an employee’s credentials to analyze their competencies and skill gaps.
Subsequently, the AI can generate fully customized VR training programs that automatically update themselves based on each employee’s progress. When the AI is satisfied that a competency has been achieved, the program will create a new blockchain record on the employee’s chain, so that the HR department is aware of their progress.
With the greater level of sensitive data that recruiters must work through, factors like GDPR compliance can be a recurring issue. However, blockchain isolates the dangers of misplaced information and delivers far greater levels of data security.
Today’s processes within recruitment risks making personal data susceptible to hackers and data-tampering. Blockchain has the ability to enhance data safety by storing it in a decentralized manner–breaking all the information down and distributing it across a wide network of interconnected computers. Each computer will house a complete copy of the data, making the matter of losing it virtually impossible.
Due to the decentralized nature of blockchain technology, the data it stores is fully immutable, because changes must be verified across the entire network. For any legitimate transaction, multiple confirmations must be provided and the same goes for underhanded attempts to access data.
Comprehensive Payroll Management
The rise of remote work has presented new challenges in managing payroll, but blockchain can also revolutionize this area of HR and recruitment.
Because blockchain works closely with cryptocurrency, it can be an excellent asset for paying employees who work in different areas of the world in a quick and efficient manner. It’s even possible for companies to create their own cryptocurrency to pay employees, which can later be converted into domestic money.
Furthermore, blockchain-based smart contracts have the potential to change how workers are rewarded for special tasks. Rather than performance-based bonuses which need to be cleared by a payments and accounting team, employees can have certain bonuses written into a smart contract–whether they involve making a certain number of sales per month or learning new competencies–and once they’ve achieved their goals, an instant payment can be made into their account. This can help to leverage a truly rewarding employee experience.
Although we’re still very much in the early stages of seeing blockchain realize its potential, the prospective use cases are still clear for all to see. When it comes to recruitment, the automation and efficiency that blockchain can bring mustn’t be ignored. The companies that move fastest in accommodating the technology are likely to lead the way in employee retention rates and data security.