By Sricharan C, Head of HR at WazirX.
When we think of Blockchain Technology, we associate it with cryptocurrencies; we associate it with finance and mediums of exchange. That could not be farther from reality! Leading players across industries are all looking to leverage this technology. Blockchain has so far revolutionized the world of finance and is well on its way to revolutionizing several other sectors, including the process of recruitment!
So what is Blockchain?
As defined by the authors of Blockchain Revolution, Don and Alex Tapscott, Blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
As of today, data is typically stored in the cloud – which businesses, as well as individuals use. The data stored in the cloud is typically centralized – hence vulnerable and can be easily tampered with. Data while being stored is not usually encrypted either – leaving it susceptible to hackers and scammers.
On the contrary, blockchain relies on a distributed ledger – a chain of records is stored on a large network of independent computers – across multiple locations – making it completely transparent and decentralized. This not only makes blockchain secure but is completely fraud-proof. The decentralized nature of blockchain makes it impossible to make a fraudulent entry since it would be immediately rejected!
What does this mean for the world of recruitment?
Verified Candidate Profiles:
Apart from profile mining, assessments and salary negotiations, a significant amount of time in the recruitment process is invested in verifying candidates. This is usually done by employing third parties who conduct detailed background checks on candidates – starting from getting in touch with academic institutes to verify credentials to reaching out to all previous employers to verify work experience. With the workforce becoming increasingly global, this process has become expensive and time-consuming.
According to a study conducted by CareerBuilder, almost 75% of recruiters have noticed lies on the resumes that they have received. This number fails to take into account the number of lies that go undetected.
Blockchain easily solves this by creating blockchain-backed cryptographic profiles. The information on these profiles can include academic credentials, employment records, criminal background checks and professional licenses and certifications.
Any information entered into the blockchain must be verified at the source. What does this mean? It means that the concerned educational institutions or employers would have to verify the information as it is being entered into the blockchain. At MIT, while the institute offers a digital version of their diplomas, students also download an app called “Blockcerts Wallet” that allows students to get a verifiable, tamper-proof version of their diploma that they can share with employers, schools, family, and friends.
A blockchain-backed profile also gives candidates more control over their information since it cannot be tampered with. Besides, information on these blockchain-backed profiles can be updated as candidates progress through their careers. Any certifications or professional courses they take can also be updated on their profile in real-time.
Well-built blockchain solutions for recruitment can make the long and tedious process of screening applications and candidatures simpler by filtering in only verified candidates and automatically screening candidates with relevant credentials and skill sets to a particular job. Blockchain has the ability to completely revolutionize and streamline recruitment while making the process much more efficient and economical.
Candidate Behavioral Profiles:
Organizations today spend between 200 – 500 USD per candidate while putting them through assessment centers that assess their technical prowess and behavioral characteristics. A blockchain-backed cryptographic profile has the potential to incorporate aspects like personality profiles and cognitive abilities obtained from online assessment tests. This would enable organizations to assess candidates better while taking into account their behavioral characteristics to ensure their cultural fit.
Reduction and streamlining of Onboarding processes:
When a candidate is hired, a very long time is spent on processes that include but are not limited to entering candidate information into systems, generating contracts, employee identification and login credentials. These processes are often long and cumbersome since they include coordination between several departments.
Enter Smart Contracts! Smart contracts are programs stored on a blockchain that run when predetermined conditions are met. These contracts can automate the execution of an agreement so that all concerned parties can be certain of the outcome without any dependencies or loss of time. In addition, they can automate a workflow and trigger the next action when conditions are met.
Smart contracts can potentially automate a lot of these onboarding processes and reduce dependencies on back office functions.
This has significant implications for the gig economy that is on the rise! With a global workforce – a majority of it working on time-bound contracts, smart contracts can make the process of hiring, contracting and managing the workforce faster while reducing the dependencies on the backend and administrative tasks significantly.
While the implications of blockchain technology on recruitment will be significant, most of these solutions are in conceptual and nascent stages. However, blockchain technology and its adoption is picking up pace quickly. Blockchain gives an entity complete control over its virtual identity. It is pushing us into an era of decentralization, transparency and truth.