Digital City of Manhattan
You have probably heard a lot about blockchain in the past few years. It is best known as the technology behind bitcoin and other cryptocurrencies, but it has lots of other potential uses—including the potential to revolutionize the HR industry. In particular, blockchain will transform the way companies hire temporary workers; in the near future, hiring reliable temps will be faster, easier and more efficient than ever.
So what is blockchain? It’s a system where information is stored in batches, or blocks. These blocks are linked together in chronological order in a “chain.” Information contained in a block cannot be changed or deleted; rather, changes are stored in a new block. Copies of the blockchain are spread across a network of computers, which must also verify the information in each new block before it is added to the chain. This makes data stored in a blockchain extremely hard to tamper with. Blockchains can be public, private or a hybrid of both.
All of this means that information stored on blockchain is secure, transparent and trusted—so how can it help make more efficient and effective workplaces?
1. Hire reliable temporary workers fast
Trusted job history
Temporary workers are the lifeblood of many modern-day companies, but sourcing reliable, efficient temps can often take as long as hiring full-time employees. If candidates are able to put their credentials on the blockchain, this could provide an easier way for staffing agencies to find and verify qualified temporary workers quickly and efficiently.
Universities would upload degrees and certifications, and employers would upload job titles and dates. Other information such as a police background check could be added to the chain as well. Candidates would then be able to make these records available to staffing agencies. Because all of this information is verified at the source, recruiters wouldn’t need to spend time and resources calling previous managers to confirm the information. However, it’s important to note that this system would need to be on an opt-in basis. Any candidates uncomfortable with putting their information on the blockchain would need to be protected.
Some startups are already working on developing tools for hiring agencies to make use of the blockchain. Recruit Technologies and Ascribe have teamed up to develop a blockchain resume authentication service for job hunters that would digitally verify official certificates and resumes. At the same time, it’s worth noting that it’s unlikely all employers and universities will adopt blockchain technology at once. HR professionals will still need to do their due diligence in verifying the histories of job candidates, making use of blockchain verification one part of a more thorough background check. In this sense, the blockchain will provide support to more traditional forms of background checking and will be a powerful new tool in the HR professionals’ arsenal.
A digital ID
When we use the internet, we leave a lot of information behind. Downloading and using a language app, wearing a smartwatch to track your exercise, or streaming your favorite show all leave a digital footprint. Today, many “everyday” items—including your car, your smart home hub and your fridge—may also be connected to the internet.
This data can map our likes and dislikes, habits, skills and interests. Pulling this information onto blockchain could create a “digital dossier” of a candidate’s hiring potential by creating a more rounded picture of them than would be revealed by a cover letter or interview. For example, the data from a language app could tell more about a candidate’s language proficiency than a standardized test. Again, this wouldn’t replace the deep due diligence done by human HR professionals, but it could certainly enhance it.
2. Easier and more effective salary payments
If you have an international staff, you know that overseas payroll payments are expensive and inefficient. International bank transfers can take a long time to process, incur heavy bank charges, and experience currency exchange volatility, all of which cause a headache for both the employer and employee.
But payment transfers through blockchain could simplify international payroll. By partnering with banks and payment services around the world, Bitwage transfers money into bitcoin, which can then be paid out in local currencies. Payments are fast and have very low transaction fees, roughly 1% compared to an average of 8% for bank transfers. Moreover, as the payment is transferred via bitcoin, the payment can be tracked so you know staff received their wages.
A similar pilot project is having a positive impact for migrant workers in Thailand. Everex, an Asian blockchain startup, helped 100 employees from Myanmar transfer money home instantly, without transaction fees, which are usually around 7% total.
Gender pay gap
A Pew Research Center study of average hourly earnings of both full- and part-time employees in the USA found that women earned 18% less than men in 2017. In the same year, the global average pay for women was $12,000 compared with $21,000 for men.
Blockchain could address this huge pay gap by making salaries and work performance more transparent. As workplaces introduce more connected devices—such as door and lighting sensors, telepresence technology and wearables—more data will be available that can track employee performance. Employers will be able to track the number of hours worked, meetings scheduled and attended, and projects progressed. This would make it easier to align pay with performance.
Additionally, salaries and bonuses will be more transparent if they are put on an open blockchain, which could make differences in pay open to scrutiny.
3. Help employers outsource tasks
New startups are showcasing the possibilities of bitcoin for outsourcing work. For example, Earn.com lets people earn cryptocurrency by replying to emails and completing tasks. After creating a profile on the platform, users join lists matched to their skill sets and interests (there is a list for Python programmers, for example). Based on this information, they start receiving targeted paid “microtasks,” such as completing surveys from recruiters, startups and researchers who can set the number of participants they need and how much money they are willing to spend.
Taking the idea one step further, workplaces could use the power of blockchain to track work outsourced to independent or freelance staff, having a verified and tracked record of completed tasks. This would increase the transparency and trust between both employers and employees.
Most of these startups are still in the early stages of building and scaling their product, and it’s still early days for blockchain overall. However, I’m excited to try these new technologies for my own businesses when they become widely available. It might not happen overnight, but blockchain has the potential to completely transform the HR & staffing industry. The companies that will be most successful in the next 5, 10 or 20 years will be the ones who not only adapt to but also embrace and welcome that change.