Richard Branson once said, “Hiring the right people takes time, the right questions and a healthy dose of curiosity”. Agreed. But it also requires an investment; an investment of resources and of money. And if you, as the hirer, get it wrong it can lead to a protracted, painful and expensive experience for you, your company and the employee.
From my perspective, having hired employees in many and varied roles, it becomes very much a personal contract between me and the employee. Yes, of course, we need to complete all the paperwork and do the background checks but, in the end, it comes down to trust. Do I trust the candidate and does the candidate trust me? Can I believe everything they claim on their resume and do they trust that all the wonderful things I have presented about working for my organization are equally true?
You were an astronaut before you were a brain surgeon? Really?
There have been many high profile examples of people telling untruths on their resume. I’m guessing that these ‘errors’ were not particularly malicious in their original intent. Perhaps created when the individual was just starting out to help them boost their career or secure that first important role. Not that I’m justifying lying on your resume but it’s not the worst crime you could commit. And usually, once the individual reaches the dizzy heights of a C-level role or even public office, chances are, if you don’t put things right, it will come back to haunt you – just ask Scott Thompson, former CEO of Yahoo. However, the opportunity to massage your resume is tempting when that next big opportunity presents itself. And for the hirer, the possibility that the candidate you liked the most is falsifying their resume is no small threat and simply makes the whole hiring process more complex and stressful.
You charge how much to help hire someone?
In addition to the inherent mistrust of individual resume’s there’s also the thorny issue of how much recruitment companies charge to help you hire or to hire for you. Hiring is something most managers do only periodically and senior leaders even less regularly, and it’s not an easy set of skills to master. So mistakes are often made.
It’s very useful to have an experienced recruiter on your side to help you make the right decision. But, from my perspective, 10 to 20% of the first-year salary, which is about the average cost across a variety of roles that recruiters charge, is a big expense. This is especially true when you’re talking about recruiting staff which, with the best will in the world, is more art than science. Getting it wrong can be a costly error. So we pay the recruiters fees in the hope that they will help us get it right.
How can Blockchain help?
If you listen to the evangelists, blockchain has the potential to solve every problem from global warming to curing a common cold. So, is there an online recruitment technology coming that can enable employers to trust the resumes of candidates more fully and at the same time reduce the cost of having a consultant help with the hiring process? In a word: yes!
In essence, the Blockchain is a secure transaction ledger that is shared by all parties in a distributed network of computers. It records and stores every transaction and all data that transits the network, essentially eliminating the need for “trusted” third parties and giving control of personal data back to the individual. Data residing on or managed by a blockchain is immutable; it cannot be tampered with or deleted. And its provenance can be guaranteed.
The technologies that make the blockchain work include cryptography, consensus algorithms (clever mathematics), game theory, smart software and a distributed network of computers called nodes. Altogether these technologies make blockchains, such as the Bitcoin blockchain, highly secure, as demonstrated by the fact that, since its inception in early 2009, the core Bitcoin network has yet to be compromised.
For recruiters, this means that candidate resume information, once on the blockchain for hiring, can be taken as truthful. And each resume can be managed by the candidate, who can make it available to employers and recruiters as required and for the period of time that it is required, say for the duration of the application process. In this way, no manual verification of candidate information is required and brings trust into the recruitment equation. Voila!
There is, of course, a glaring problem with this proposition. You may accept that resumes on the blockchain are immutable and therefore can be trusted without further verification, but how can you be sure that the information placed was accurate and true when it was uploaded to the blockchain in the first place? Worse still, if it wasn’t, that non-existent degree cannot be removed since it’s now recorded on an immutable ledger!
The technology is only 20% of the solution
The implementation of any new technology, especially one that requires some recalibration of our thinking about basic but critical business functions such as storing information or executing transactions, as the blockchain does, requires that new processes and procedures be developed to ensure the technology fulfills its promise and integrates with legacy systems.
Blockchain for recruitment means developing an eco-system of data verifiers including schools, colleges, employers, certification authorities and so on, each of whom can be notified when any candidate data is posted to the blockchain in order for them to verify that data. If I upload data that states I have a master’s degree from Henley Management School in the UK, the student database at Henley can be searched for a match and the data verified and accepted on to the blockchain, or rejected if not verified. All of this can be achieved through the use of API’s and initiated by the candidate through a mobile or Web application.
But hold on, you might ask, why would Henley or any other college or employer go to the trouble of implementing a system to verify data uploads from a candidate? Good question.
There are at least two very different reasons why institutions might do this.
First, it’s in everyone’s interest that accurate candidate information is posted to the blockchain. For employers, they will want an accurate record of employment history to be made available when requested; for schools and colleges they will not want anyone claiming qualifications they don’t have and for the candidate, posting inaccurate information to the blockchain is very likely to backfire in a big way – especially since it will be stored forever!
Second, as with blockchain applications in other fields, companies launching blockchain based recruitment applications are generally building crypto tokens into their solutions. The subject of ‘crypto tokens’, or simply‘tokens’, is deserving of a separate post itself but essentially a token is a digital form of currency, specific and integral to a particular blockchain application. Tokens can be designed with specific features such as whether they can be traded on secondary exchanges, or what they can or cannot be exchanged for. Within a recruitment eco-system, tokens could, for instance, be earned by candidates for providing recruiters and employers with access to their resume information. Candidates may be charged in tokens for uploading their data and having it verified in the first place. Tokens could be paid to data verifiers, including academic institutions and employers, for verifying candidate information (or showing it to be false) and so they can potentially realize a financial return for their participation.
Tokens may also be traded on secondary exchanges and even converted to fiat currency. In other words, a monetary system can be developed within the eco-system that increases in value through network effects and drives the required behavior from all of the participants. The desired result is that it is not in anyone’s interest to cheat, either because they will suffer a monetary loss or they will be found out and excluded from the system.
Of course, there is far more to the development and application of blockchain in recruitment but this does seem to be one use-case where blockchain can solve a real-world business problem and provide tangible benefits to all parties. If we fully utilize its capabilities then blockchain will change HR and other business forever!
For more information on how blockchain technology in the selection and recruitment process can save time and money, contact Welford Management. Welford is an expert blockchain consultancy group for startups, growth companies, and large enterprises. Whether you are looking for business strategy and planning, sales and marketing, security & compliance or finance and funding strategy, Welford can help. We offer workshops to both senior leaders and management teams on how to develop and implement blockchain for recruitment and other use cases.