How Blockchain Will Drastically Alter Recruitment
Blockchain is bringing about a tremendous change in the way that businesses work and is increasing the efficiency of businesses. A blockchain is a decentralized database that works based on a node to node agreement.
For a block to get added in the database, a request or transaction needs to be approved by multiple members or peers. As more and more blocks get approved and added by separate nodes, the older blocks become untamperable and a permanent record for all future activities.
Although, blockchain is still taking roots, its effects and change can be felt across multiple domains. As we had mentioned earlier, Blockchain has had particular adoption in the field of marketing, auditability, finance and other fields as well. It has also seen widespread adoption across both small businesses and enterprises.
Some of the possible use cases of blockchain in the field of recruitment are mentioned below:
Faster Recruitment Process
Some of the common questions that plague recruiters are as mentioned below:
- Are the recommendations legit?
- Are the certifications valid?
- Are the listed skill set in the document verifiable?
- Is something unappealing going to pop up when we run a background check?
In order to clarify these doubts, recruiters spend loads of time on verifying certificates and employment records of a candidate who is shortlisted for a position. Access to a person’s academic credentials and certifications could reduce the amount of time recruiters spend verifying records.
Additionally, it could provide a limitless wealth of information. If a company can confirm the authenticity of a candidate’s credentials quickly and easily, they can easily access candidates that are overlooked by companies that normally use traditional ways of shortlisting candidates. Similarly, employment records stamped on a blockchain could reduce the effort spent by recruiters trying to call previous companies to verify employment history. This will speed up the hiring process while also providing access to job candidates who are normally missed in the normal mode of hiring.
Once a credential is posted on a blockchain, it can never be changed. A duplicate credential would, on paper, appear valid and original but it can’t be verified against the blockchain. For students or job applicants, this would mean that their credentials would remain accessible even if the colleges or schools that issues them close down. Similarly, digital credentials would remain valid and accessible even if the company that issued them gets hacked or loses data. This can be especially useful in cases where a company is absorbed by another company in which case employment history can become difficult to find.
Payroll and Employee Benefits
Blockchain can additionally be used to verify records and automate certain aspects of contracts. For example an employee’s wage can be automatically increased when the probationary period gets over. Alternatively, when an employee becomes eligible for health benefits, benefit could be initiated for them. It could also be used to sign non compete policy or non disclosure agreements (NDAs).
In case of salary credits, blockchain can be used to transfer salaries with a lower transaction cost. Currently, expats cost an organization 2.5 times the cost of a regular employee, As workers are temporarily shifted to higher paid countries, a high number of expats exist around the world. Paying salaries for these expats via cryptocurrency is more cost effective as the transactions and conversion costs are lesser for such types of transactions. Expat employees will also find it beneficial to access their salaries much more quickly than waiting for it to transfer from their host country to their residing country. A platform for freelancers and temporary employees that allows usage of cryptocurrency will ensure that the freelancers and temps receive money quickly. Blockchain is also expected to make entry into HRMS software as a part of payroll module.
Call Logs and Employee Feedback:
Employers can also use blockchain to confirm the call logs made by sales reps or other employees within the company and to perform background research on applicants.
Blockchain can also be used to address employee problems and feedback, semi anonymously which can be revealed based on a need to know basis. Employees can put their past performance for feedback and review on a blockchain. These reviews can be used for appraisals, internal reviews and feedbacks.
Employee and Education History maintenance:
Candidates applying for jobs could also take benefit of this technology. Blockchain could be used to records all their transactions including their certifications, course history, degrees, salary, etc. They would have complete control over all the data and could share it with the required parties on an as needed basis.
Current List of companies using blockchain in HR industry
R Block: R_Block runs on a ethereum based platform and is in Beta stage. This platform works on semi anonymity and locks references for an employee till an employer requests for it from the candidate following which the candidate can release the CV and references on his terms. This application is also General Data Protection Regulation (GDPR) compliant. The semi anonymity ensures that employees are not discriminated against based on their names, age, etc. and are selected purely on the basis of skills, experience and personal fit.
Ascribe and Recruit Holdings: These two companies are working hand in hand to create a blockchain based resume authentication database. All paper based certificates and contracts are inserted into the blockchain making it easier for companies to verify an applicant’s credentials.
Chronobank: A new entrant into the field is a company called chronobank that allows quick payment in short term recruitment industry. This application uses time based currency to pay workers. The company also plans to partner with another company called LaborX to facilitate a regular supply of workers through a decentralized labor exchange program. This will allow employers and workers to connect directly and employees will get paid directly based on their experience and skills instead of being based on industry based standards.
However, blockchain is still in its early phase of evolution. Even though internet has developed so much, we still frequently see attacks happening. We also often see social media showing information about a user that we should not even have access to.
Blockchain is in no way still infallible. However, it is time to get the culture ready for using it so that we can absorb the technology quickly and move to a more efficient HR practice.