What You Need To Know About Blockchain-based Solutions and HR
Since its founding in 1868, the Massachusetts Institute of Technology has issued paper certificates to the graduates of its highly regarded programs. Beginning last year, however, MIT graduates were given the option of receiving their diplomas in a digital, tamper-proof form via an app that’s based on blockchain technology.
The intent is to give students quick access to a secure version of their diploma that they can easily share with other schools, family members and employers, according to MIT.
Blockchain is the technology that enables the cryptocurrency Bitcoin. It is, essentially, a secure database called a “distributed ledger” in which each transaction (or “block”) is replicated across thousands of computers. No single block can be altered unless all the computers (or “nodes”) are in agreement, thus creating a highly secure and (theoretically) tamper-proof medium. This security is vital for Bitcoin and other blockchain-based cryptocurrencies, and its proponents say it potentially gives blockchain a great deal of utility for the HR space as well.
“Blockchain is a great opportunity for HR professionals,” says Monique Black, head of talent and HR services at investment firm Maco.la, describing blockchain as “a tamper-proof system of record.” “Blockchain can be instrumental in making HR processes more effective, whether it’s identifying job candidates or validating credentials.”
Nevertheless, the technology has not been widely adopted in the mainstream yet, although a growing number of companies and investors are actively pursuing blockchain-based solutions.
Blockchain-based Solutions and HR
Startup companies such as Vertalo, Job.com, Jobeum and Caerus Connections are either building or have introduced new blockchain-based HR products and services. ChronoBank, for example, an Australia-based cryptocurrency firm, uses blockchain technology to help clients find freelance workers and pay them in Bitcoin-based “Labor Hour” tokens.
Other, more-established vendors in the HR space, including background-screening firm InfoMart, are also investing in blockchain. InfoMart is currently working with half a dozen blockchain experts to explore building new products for background screening and identification and hopes to be in beta-testing with clients later this year, says CEO Marco Piovesan.
“We think blockchain is definitely advantageous to jobseekers and consumers in making sure their data is secure,” he says.
Caerus Connections operates a blockchain-based recruitment and employment platform in which employers and jobseekers purchase subscriptions via cryptocurrency. Jobseekers complete a 50-question assessment designed to analyze their “key workplace motivators,” which is then stored on the blockchain. Founder Morgan Browning says he was inspired to start the company after repeatedly running up against a lack of “solid, verified information about people” during his work at assessment firm Emergenetics International, where he serves as president.
Thanks to the help of so-called “resume polishers” and loosely regulated diploma mills, he says, it’s relatively easy for job candidates to overstate or even invent qualifications for themselves to increase the likelihood they’ll be hired.
“Lots of times, the person a company thought they were hiring isn’t the person who actually reports to work,” says Browning.
An end-to-end blockchain-based recruitment platform could solve many of the recruitment problems that plague employers and jobseekers alike, he says.
“Recruiters are tired of dealing with the inefficiencies caused by inaccurate data, and jobseekers are tired of being treated like pieces of meat,” says Browning.
Blockchain-based Recruitment Pitfalls
One potential sticking point for blockchain, particularly for companies that recruit in the European Union, is the EU’s new General Data Protection Regulation, a robust data-protection law scheduled to go into effect on May 25.