The next issue of Intelligent Sourcing will cover blockchain and examine some of the unexpected uses to which the technology can be put. Here guest poster Alex Waters of Elm Labs considers the impact on recruitment
The cost of poor hiring decisions can decimate the bottom line and wreck a company’s culture. Zappos CEO Tony Hsieh once observed that poor hires cost his company “well over $100 million.” And with data from HR consultant Jörgen Sundberg, who concluded that the cost to onboard a new mid-level manager is approximately $240,000, it’s clear the stakes for making good hiring decisions are huge.
Services like FakeResume and CareerExcuse are part of an industry that’s making things worse for employers. These sites are in business to help desperate customers fill the gaps in their employment histories with fake or exaggerated entries.
Sorting the resume wheat from the chaff becomes increasingly difficult when companies are making bulk hiring decisions across borders, such as in outsourcing deals. Barriers in time zones, business customs, language/dialect, and more can make the process of validating employment histories, degrees, certifications, and skills daunting, often compounded when time is of the essence in setting up a new offshore resource.
Blockchain technology offers a compelling means of addressing this problem. A blockchain can be thought of as a time-stamped, append-only public ledger that is duplicated to multiple, distributed locations, none of which are owned by a single entity. Entries are bound to each other using cryptography via a consenting protocol, and that leads to the ledger being secure and tamper resistant.
Industrial applications of blockchain technology are touching almost every market, gaining ground as a means to help industries create and curate reliable, tamper-resistant, fast, and efficient means to track assets, attest to chain of custody, and make reliable information available to everyone who needs it and protect it from those who don’t.
Similarly, a blockchain can help solve the hiring problem. Today, verification processes are fragmented. Each verification—education, address, skills, employment history—absorbs time and resources, and each can be essential to a successful hire. Up until this point, these verifications are viewed as a one of those time, money, and labor-intensive processes that companies cannot avoid, falling into that unfortunate category of a simple cost of doing business.
Companies like Springrole are stepping into the market by offering a platform designed for and targeted to the ecosystem of international corporations hiring technical and management talent offshore, in countries like India for global in-house centers, as an example. They’re using a public blockchain paired with an ERC-20 token to create a value-based incentive for the attestation of professional credentials and the endorsement of specific skills. At the same time, they’re shifting the ownership of career data into the hands of the individual professionals who possess those skills. It’s a focused application of blockchain tech in HR—helping to bridge boundaries among countries by lowering hiring challenges.
Blockchains can be largely tamper proof. This means that any data entered onto a blockchain may not be altered or removed, even by the person who put it there. Any data that is attested on a well-architected, HR-focused blockchain can be trusted as accurate. This will aid in weeding out fake job profiles, or even negate the possibility of them altogether.
If digital certificates attesting to educational qualification, employment, skill proficiency, or any critical information are issued or stored on a blockchain: companies may not need to spend additional time or money on verification. Therefore, a previously tedious process is reduced to opening an app to see if the data is verified. This has the potential to disrupt the hiring industry and save millions of dollars and thousands of staff hours annually.
Looking beyond the hype, blockchain technology clearly has the potential to disrupt a wide swath of industries, just as innovations like cloud computing have done before. Employment verification is one such industry where we can see the direct applications of blockchain innovation.
Alex Waters is Head of Technical Research at Elm Labs. He specializes in system design and software architecture focused on practical applications of blockchain. An early member of the Bitcoin ecosystem, he has worked full-time on blockchain since 2010, including co-founding Coin.co and Coin Apex, one of the first blockchain research labs. He also has held roles at BitInstant and itBit. A widely published writer on blockchain, he has collaborated with many organizations, including the NY Federal Reserve, NYS Bar Association, The Council on Foreign Relations, NYU, The King’s College and Columbia University.