By Mark Gamache
Blockchain, blockchain, blockchain! Wherever you turn, someone seems to be talking about blockchain technology and how it’s poised to change the finance industry (among others)! So, what is it, exactly?
Blockchain technology first made a splash in the financial sector with the development of Bitcoin, a virtual currency, in 2009. At its core, it’s a way of tracking transactions without a central authority.
Let’s say you owe me $5 and you want to send it to me. With blockchain, the verification process is tracked and distributed in real time across a decentralized network. When you send the money, a program accesses a ledger (distributed across many computers), confirms that the $5 exists and that you have assigned it to me by noting my ownership. Each previous transaction is available for review and, because since the ledger isn’t stored in a single place, it’s impossible to forge an entry or counterfeit a transaction.
More than a financial tool…eventually
Slowly but surely, applications are being studied that will spread the technology beyond the banking system and into the business world, and that includes Human Resources (HR).
If you think of the hiring process, my guess is that applications, interviews and salary negotiations come to mind. Yet a significant part of the hiring process—at least in thorough companies—is verifying the information that a candidate provides. Mostly, this is done by checking references and, maybe, educational credentials; blockchain may provide another option.
A resume verification system could have employers develop sophisticated employee profiles—essentially an HR ledger—that could verify performance, work history and a host of other data that would be helpful in determining whether or not a candidate was a good fit for the company.
Such a system could cut out a significant portion of the time it takes to find, meet and assess a candidate for an open position, which is a boon for a company’s bottom line.
Additionally, such a system would be "always on” which would mean that you would be making your assessment of a potential candidate based on the skills they actually have, not just the skills they’ve chosen to add to their own resume. Such a system could ultimately impact the interview process, eliminating the need for the stage(s) of interviews dedicated to skill checks. Instead, interviewers would be able to focus on critical factors of success, such as cultural fit, goals and aspirations, and the intangibles that contribute to your success.
Hunting good will
The weakness in the distributed resume lies in lower-level employees who don’t necessarily have a job history that may demonstrate their value to an organization. However, blockchain could be used to provide verifiable information on a candidate’s educational history and qualifications that would reduce the risk of fraud while eliminating the need for applicants to provide official transcripts.
Such a drastic transformation of the way we recruit and hire would require significant changes in the way we run that function. Legal and regulatory advancements would be needed to protect employees’ privacy while still making the service useful for business.
Beyond the benefits to HR, blockchain is poised to transform the way business is done in a number of areas. Any area dedicated to transactional administration—e.g., accounting, supply chain management, legal—could face significant disruption as the technology spreads. For instance, smart contracts—self-executing programs that track the terms of agreements–could eventually eliminate the need for legal involvement when vendors fail to deliver on their obligations.
Such shifts would necessitate a massive change in the structure of a business, as well as its staffing requirements. Functions within a company that were dedicated to verification, administrative documentation and coordination of those functions, would be unnecessary. This would necessarily transform the structure of many businesses, which the HR function would naturally lead. Blockchain has the potential to reduce transactional costs not only in financial terms, but in terms of productivity as well.
Preparing for tomorrow
Blockchain’s applications for HR are currently in the theoretical stage, but it’s important for professionals in the industry to imagine how it could affect various functions such as hiring. As with most technological innovations, we can’t know for certain how the rollout will affect our various businesses. What is important is gaining a solid understanding of emerging technology and staying up to speed on the ramifications for business to ensure that when change comes, you’re ready to embrace it.
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