Amid the fever pitch of the cryptocurrency craze, you’d be forgiven for thinking blockchain was nothing more than a token-making machine. The fact is, cryptocurrency is only half the story. Indeed, no one’s certain that Bitcoin or Ethereum will last — but no matter what happens with crypto, blockchain is here to stay.
At its core, blockchain is a self-sustaining public ledger. It operates by automatically executing “smart contracts” whenever the proper conditions are met, and it records those transactions for all to see. Because blockchain transactions cannot be edited once they’ve been recorded, the ledger is virtually immune to fraud.
As you may have concluded by now, blockchain’s ledger properties are what make it so valuable outside the realm of cryptocurrency. A wide variety of industries have begun to adopt blockchain technologies, including energy, logistics, and even recruiting.
While recruitment applications of blockchain are still in their infancy, a lot of exciting new possibilities are opening up. Here are three ways that blockchain is poised to change the industry forever:
1. Credential Verification
Everyone knows it’s wrong to lie on a resume — but that doesn’t stop people from doing it. In fact, lying is so pervasive in the hiring process that 75 percent of HR managers have caught a lie on a candidate’s resume, according to CareerBuilder.
The implementation of a blockchain-based record of candidate qualifications and credentials could make it nearly impossible for unscrupulous job seekers to falsify their resumes. The idea is simple: It would be easy to create a blockchain ledger that records academic credentials, professional certifications, and other qualifications. Academic institutions and certifying bodies would publish information to the ledger whenever a person completes a course/program, and employers could then check a candidate’s resume against the ledger.
Over at 42 Hire, John Dennehy envisions the candidate credential blockchain working like so:
A university could publish encrypted academic credentials to a blockchain. A candidate could have a wallet allowing them access to their credentials. When a company requests access to their credentials, the candidate could provide access directly to the company. This would significantly speed up the whole process and greatly reduce admin costs for the university.
The same sort of system could be applied to other any other credentials awarded by official institutions, be it an occupational license, security clearance, etc.
2. Reference Checks/Work History Verification
Unscrupulous folks don’t just lie about their qualifications. Many will falsify their employment histories as well.
Most recruiters and hiring managers currently rely on reference checks to ensure they get the full, accurate picture of a candidate’s career to date. We all know how inefficient that process can be. A few rounds of phone tag are inevitable. Some references won’t say much beyond “yes.” Sometimes, the candidate’s supervisor has moved on and there is no one left at the company who can speak confidently on the candidate’s performance as an employee.
As blockchain can confirm candidates’ credentials, so too can it streamline reference checks and work history verification. Imagine that in addition to certifications and academic achievements, the previously proposed blockchain also recorded information about each of a candidate’s roles: their title, tenure, supervisor, responsibilities, major achievements, and more. This “record of achievement,” as Job.com’s Arran Stewart calls it, would be verified by each employer to prevent candidates from publishing inaccurate information. Once verified, the job could not be altered — preventing the candidate from going back later and massaging the truth.
“This record of achievement would update throughout the candidate’s professional career and provide a complete data set of information, the veracity of which all future employers can confidently trust,” Stewart writes. “This record of achievement could confirm that the resume on file is accurate while giving a more in-depth overview of the candidate’s general work habits, including attendance, tardiness, performance, and achievements. References would be listed on the record as verified or removed altogether, eliminating the possibility of calling up a professional reference who turns out to be just a relative.”
3. Decentralized Recruiting
Perhaps the most radical change of all is the way blockchain can decentralize recruiting, utterly transforming the traditional recruitment process.
In your average recruiting process, an employer contracts with a single recruiter or recruiting firm, who then takes on everything from sourcing to submitting candidates. This process works well enough, but some companies are making it even more efficient by bringing blockchain into the equation.
Take, for example, the project that HireMatch has embarked on. Using its own cryptocurrency, called “HIRE,” HireMatch is building a crowdsourced recruitment marketplace. Marketplace participants can earn tokens for every action they take, from posting jobs and submitting candidates to referring friends and, of course, making placements. Because users can earn money for a variety of activities, they are motivated to contribute to a number of different open roles. Employers get access to a wider range of recruiters and a bigger pool of talent. Meanwhile, recruiters can mitigate the risks that used to come with recruiting: Even if their candidate does not get the job, they still make money.
No doubt these three blockchain applications are only scratching the surface. Indeed, some writers are even predicting that blockchain will lead to the abolition of organizational hierarchy and a new era of project-based work arrangements. This is an extreme view, but it’s not altogether implausible.
Blockchain, it turns out, is more than a ledger: It may very well be the scaffolding on which the next generation of recruiting and employment practices are built.
Matthew Kosinski is managing editor of Recruiter.com