With companies such as IBM, Samsung, Visa, Walmart and Barclays using blockchain across a multitude of applications including tracking supply chains, developing ‘smart’ legal contracts and expediting the clearing process for financial transactions, the capabilities of this much-discussed technology are significant.
If you’re new to the concept, blockchain technology enables a record of transactions to be stored and verified across a network and validated in real-time. Transactions can be financial in nature or purely information-based, and because the network records each transaction (the ‘block’) and maintains a permanent and unalterable historical record of transactions (the ‘chain’), there is limited scope for fraud. Imagine a room full of people and one person lends money to another, with everyone in the room agreeing upon and writing down the exact details of the transaction and keeping the record with them, and you start to get the idea.
It is for this reason that immediate applications became apparent in the financial world, with the ability for computer networks to replace banks in maintaining financial records. Logic follows that if a computer network is able to record the transactions usually carried out by a bank, why not integrate how we represent currency itself and remove the possibility of fraud which is so rife in our current system. It was this line of thinking that created Bitcoin with blockchain as the enabling technology.
With the ability to maintain an accurate record of validated information, providing a shared and immediately available ‘one version of the truth’, blockchain certainly has the potential to transform the way we do business.
SO WHAT ARE THE IMPLICATIONS OF HR?
Let’s start with recruitment. If you’ve ever used an online job board, CV database or professional networking site such as LinkedIn, you’ll appreciate how the ability to find people with the right skills and experience can help you identify potential candidates for positions you need to recruit.
One element which can cause confusion is the vast number of ways in which people describe their skills and experience. If you’ve ever tried to recruit a project manager, for example, you’ll have found that this catch-all term is used to describe the various management of projects ranging from building a nuclear power station to arranging the office Christmas party.
One way in which blockchain technology can simplify the work of identifying potential candidates is to provide a database of people with experience and skills codified to accurately record their abilities…
Human recruiters are naturally limited in time and resources (and often patience) in having to combine endless strings of keywords and search terms to find people on professional networking sites or job boards which often contain inaccurate or outdated details. Artificial Intelligence, however, would be able to comb through a live and accurate blockchain-enabled database of potential candidates and identify those best suited to the role. Added to this would be the ability to identify the right people, irrespective of age, gender or nationality.
To achieve this, the required compliance from the various elements of the proposed network (educational establishments, businesses, unions, individuals and so on) would be substantial. The attractiveness of blockchain, however, is the simplicity of the technology behind it and thankfully, we already have a proof of concept (of sorts) for the viability of mass data sharing on the internet.
While blockchain technology won’t replace recruiters anytime soon, the ability to effectively automate the process of identifying pre-qualified candidates would vastly increase their capacity and reduce time to hire.
After finding a suitably qualified person to recruit, HR has to confirm that the individual is who they say they are, holds the qualification they state and has, in fact, held the roles they have included in their CV. You only have to run an internet search for the words “CEO”, “CV” and “scandal” to appreciate the implications of an ineffective reference check.
Indeed, some universities have already started to look at using blockchain as a means to verifying the educational qualification level of their alumni as an accessible record. With institutions being able to verify education in this way, we can start to gain an idea as to the implications blockchain can have.
Using blockchain to record employment history and qualifications, acting as a digital CV, would require a significant leap forward in acceptance both of individuals but also employers. Despite this, it is not inconceivable that blockchain could remove the requirement for manual background checks altogether.
Progressing with this example, blockchain could also be used to record and track skills and abilities within the current workforce of a business. Companies have been doing this already, albeit in a more rudimentary way through performance appraisals and maintaining records of company-approved training courses.
A more rigorous approach using blockchain technology has the potential to turn workforce planning from a laborious annual exercise to instantly accessible and live business information. This will allow companies to understand exactly how many staff they need to recruit and where, who the right person is for that internal promotion, and if staff allocated to that important project have the correct competencies.
In the HR world, this could also impact compensation and benefits. Blockchain has the potential to provide a more robust approach to pay scales with defined salary increases for key skills or capabilities that are held at a premium in the market, or for allocating performance-based bonus awards in a more measurable way.
The use of blockchain technology to provide information on skills and abilities of a workforce would also have implications reaching beyond internal capability management…
As an example, it is standard practice in the Engineering industry for service companies to have the qualifications, certifications and skills of staff assigned to a certain projects or scope of work tied in as contractual obligations. Taking the capabilities and functionality of blockchain technology to a rather progressive yet not inconceivable application could allow more rigour and certainty in such contracts and allow companies to better understand the return on investment for staff with particular skills.
Of course, all of the mentioned applications are based on speculation and theory and as with any technology, blockchain must overcome a number of obstacles including a significant shift in attitude in the way people work. After all, we can explore the potential of new technology and a move towards a more digital world but despite the existence of such online CV platforms as LinkedIn, most companies would never hire someone without seeing an ‘offline’ CV. Hiring companies often still have a higher level of trust of the skills listed in a word document shared at the author’s discretion than those published online and open to the scrutiny of peers.
Regardless of the rate of progress, blockchain will certainly have an unavoidable impact on the way we do business and HR professionals should take note.
As leaders of transformational change, 6 Group works with clients to discover and define innovative ways to improve their businesses and support their evolvement into market leaders. Across 2017 we’ve conducted a number of transformation projects, an example of which is available here.
To find out about how we can help you achieve your evolution, get in touch.