Blockchain is the newest kid on the block, with it being the rage for a couple of years now. Everyone believes this is the technology that will revolutionize the world and change the way businesses operate from Fintech to the food supply. According to the latest estimates, the blockchain market will grow to $20 billion by 2022. Let’s find out how this technology has the potential to disrupt the recruitment & HR processes.
In this era of Digital Recruitment Platforms, the chances of frauds have increased significantly in the talent sourcing market. According to a study almost 70 % of people lie on resumes to get the job. This is a staggering number and to handle this, companies spend a huge amount of time and money to get criminal background checks and education/employment verification done. This BGV Check is cumbersome for all involved and prone to manipulation risk.
Currently, companies do not have a centralized way of performing these checks in a safe, fast & cheap manner. Most companies go through service providers which take care of all the headache for a very high fee. The average cost of performing these tasks currently stand around 250$ per candidate, which is quite a steep overhead for a small firm.
In simpler terms, blockchain is a method for storing data in a safe & secure method with no single point of failure. This is achieved by saving the information on multiple systems so that in case of failure of one node another node can fulfill the requirement. Data reliability is also maintained as records cannot be forged since it is stored by all the nodes in the chain and before the addition of any data it must be validated and approved by a majority. A blockchain is virtually impossible to tamper with since each block of information references the block before it. Blockchain can be of both varieties Public/Permission-less or Private/Permissioned depending upon the use case.
Assume a scenario where HR/employer can validate one’s educational or work experience and potentially more personal facts with full confidence through data on the blockchain network, thereby making the process quicker and cheaper. This would bring back the trust in the hiring process and candidate’s competency.
There is a growing list of institutions which have started providing certificates/degrees on the blockchain. Along with educational qualifications, companies can also start updating experience certificates on the blockchain. These blocks would be hash encrypted so that only the person and the updating institution would have access, this access can be shared with someone else on-demand. Smart contracts will be used for rolling out the appointment letter, based on the successful completion of all background documentation checks. All this will mean less cost, more efficiency & faster turnaround, which according to an estimate would bring down the average cost for verification from 250$ & 12-man hours to 50$ dollars and a couple of man-hours max.
Every new technology comes with its set of challenges and rules, Blockchain is no exception to this. For verification of any type of document, we need to have all the historical records also present on the blockchain along with the present-day records. Migrating historical data is easier said than done, it is a lot of work. It would be like digitizing old New York Times, where they need to be scanned and OCRed.
There’s going to be a messy transition because there will be people on blockchain and those who are not.
The transition is still possible for college degrees it would be more complex for work profiles i.e. independent consulting, firms which have closed etc. We would have years of a headache to verify such data.
Most experts agree that blockchain is certainly the go forward approach for hiring and managing purposes which will change the industry standards and processes, we just need to iron out the details around the implementation and verify the proper use-case based on pro and cons. This is like the transition phase the world saw in the 90’s when it was moving away from paper to digital. One good thing is that it’s possible for the generation starting now, going forward that history can be documented.
Over and above the benefits outweigh the drawbacks by a huge margin in the long run due to lower cost, more control on efficiency and faster turnaround.Loading Likes...