Blockchain is here. Is HR ready?

As a recruiter, wouldn’t you like to receive 100% accurate and verifiable resumes and conduct instantaneous background checks? That technology is here. And it is called blockchain.

Blockchain technology is a secure decentralized network of computers that verifies and automates the flow of information. It now can be trustworthy and eliminates intermediaries. It is best known for use by crypto currencies such as Bitcoin. Mainstream banking is taking a significant interest in Blockchain technology to replace its aging infrastructure, gain efficiencies, compete with “fintech” startups, and create new business models.[i] As well, companies such as Microsoft, Amazon, and IBM have made huge investments in the technology as part of their “cloud” business services.^[ii]

Blockchain will begin this year to disrupt Human Resources in the areas of recruiting, performance histories, employee background checks, I-9 verifications, and even payroll. Some technologists are predicting that it will replace the need for resumes as we think of them today and background checks. The careers of employees at other companies and their academic histories, graduation dates, degrees, and GPA may be pulled up from blockchain transactions.^[iii]

Companies including London-based startup Appii Ltd., as reported in The Wall Street Journal, see blockchain as the future of the résumé. Appii is working with employers and universities to develop a product that first verifies the claims individuals make about their history, then issues them digital résumé listings of all their data from multiple locations and institutions. The digital document can be shared with employers and updated as the owner’s career progresses.

According to Dave Zielinski writing for SHRM, some start-up blockchain companies have begun operating in the recruiting space. Last year Recruit Technologies and Ascribe announced a partnership to develop a prototype, blockchain resume authentication service for job hunters. The service would enable the digital verification of official certificates and resumes, previously done on paper. The two partner companies claim the effort of collecting multiple official certificates would be reduced for job hunters, and recruiters could handle confidential official certificates safely and without worry of fraud.^[iv]

Jobeum is using blockchain to create a LinkedIn-like recruiting tool. According to its website, Jobeum is a blockchain-based professional network, a transparent system where users control who sees a specific part of the information in their profile. The profiles become their “digital twins” and earn “JobTokens” for them when other people ask them for certain information or an action (e.g. open a part of their profile, show contact information, confirm their skills).

A handful of educational institutions and technology companies are working on developing trustworthy, quickly verifiable digital diplomas and resumes. The Massachusetts Institute of Technology issues digital diplomas based on blockchain to all its students who graduated in February 2018. The diplomas can be shared on social media or directly with employers.^[v]

“There’s a fair bit of effort required at the moment to determine the credentials that someone puts forward on their [résumé],” says Gary McKay, co-founder of the digital-identity startup when interviewed by The Wall Street Journal. “That friction diminishes the ability for employers to find talent quickly and to have them sitting in a chair or taking on a role as quickly as they need.”^[vi]

A digital diploma could allow organizations to check credentials instantly without having to run background checks. Using a digital signature, for example, students could provide a copy of the diploma to employers, who could then upload the file onto a verification page to get confirmation that the degree is legitimate. The university doesn’t need to be involved.

The Federation of State Medical Boards, which advocates for all of the medical licensing boards in the U.S., has issued sample verifications using the same Blockcerts system as MIT. Officials at the federation say they hope that its work will initiate a conversation at the state-boards level.

Resistance to change

Still, regulatory hurdles could slow wider adoption of blockchain verification. Mike Dugan, chief information officer of the Federation of State Medical Boards, says regulation at the state-level hasn’t caught up with the technology. Only a handful of states have passed legislation to enable broader usage of blockchain technology. For example, in 2017, Arizona added a law to recognize blockchain-based digital signatures.

“Digital signatures have been around a lot longer than blockchain, and…there’s still not a lot of widespread adoption” of those, Mr. Dugan says. “Some of this is skepticism, and [some is] people unwilling to change their processes.”^[vii]

Members of the Blockchain in Transport Alliance, a global freight-industry trade organization focused on commercialization and education, are experimenting with using blockchain technology as a form of driver identification.

The managing director of the alliance, Craig Fuller, as reported in The Wall Street Journal, says digital identity for drivers could help to protect companies from unnecessary litigation because whole work histories and skill sets could be on blockchain, easily accessible to companies when they hire.

“These big enterprise companies just can’t afford to hire a driver that has any amount of risk,” Mr. Fuller says. “[After an accident] you end up in court, and the attorneys suing you can prove you’re making all this money and you’re hiring drivers that are unsafe.”^[viii]

Blockchain use will grow in conventional finance, supply chain, and IT. Is HR ready?

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne. He consults and provides “hands-on” support for innovation, global talent strategies, developing agile leaders and teams, and other strategic initiatives. Visit https://victorhrconsultant.com/ to learn more.

[i] Andrew Meola (Sept. 20, 2017, 4:44PM), “How banks and financial institutions are implementing blockchain technology,” Business Insider. Found at http://www.businessinsider.com/blockchain-technology-banking-finance-2017-9.

[ii] Diva Joshi (Oct. 24, 2017, 1:06 PM), “IBM, Amazon & Microsoft are offering their blockchain technology as a service,” Business Insider. Found at http://www.businessinsider.com/ibm-azure-aws-blockchain-service-2017-10.

[iii] Ashik Ahmed (March 14, 2018, 11:21 AM), “How Blockchain Will change HR Forever,” Forbes. Found at https://www.forbes.com/sites/ashikahmed/2018/03/14/how-blockchain-will-change-hr-forever/#649add8e727c.

[iv] Dave Zielinski (Nov 21, 2017) “Is HR Ready for Blockchain Technology?” MySHRMSociety for Human Resources Management. Found at: https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/is-hr-ready-for-blockchain-technology.aspx.

[v] Henry Williams (March 11, 2018, 10:02 PM ET), “Blockchain May Offer a Resume You Can Trust. Colleges and tech companies are using digital ledger to develop easily verifiable diplomas and employment records,” The Wall Street Journal. Found at https://www.wsj.com/articles/blockchain-may-offer-a-resume-you-can-trust-1520820121.

[vi] Ibid.

[vii] Ibid.

[viii] Henry Williams (March 11, 2018, 10:02 PM ET), “Blockchain May Offer a Resume You Can Trust. Colleges and tech companies are using digital ledger to develop easily verifiable diplomas and employment records,” The Wall Street Journal. Found at https://www.wsj.com/articles/blockchain-may-offer-a-resume-you-can-trust-1520820121.