Speculative cryptocurrencies have duly earned their recent barrage of negative media. It’s not hard to see how the reputation of the record-keeping technology behind Bitcoin, Blockchain technology, has been equally dragged. Beneath the publicity, however, is an underlying, innovative technology that is a means for solving real business challenges. It provides an indisputable layer of trust over public data exchanges, which can govern the consensus over the truth of a record. Blockchain is to the exchange of data, what the internet is to the exchange of information. It’s thereby likely that this new breed of wholly righthand digital assets is going to disrupt an increasing number of industries and their traditional work cycles. How then can it be leveraged within the long-standing people orientated industry that is Human Resources?
Recruitment & Talent Recognition
The ubiquity of online recruiting websites has made applying for a vacancy as easy as a quick upload of a CV or LinkedIn Profile. At the receiving end, this results in a flood of potential candidates that must be sorted through based on the sparse and semi-structured information provided; a costly and tedious process. On top of this, employers are faced with the challenge of verifying things like: skills, qualifications and employment history. What if we could completely trust the information submitted on each application?
A single blockchain that records educational attainment, training certifications, previous employment, individual performance levels and other relevant qualifications and achievements could be the answer. This would result in an automation of the entire short-listing process, with far greater reliability. Employers could use this to recruit talent with less information asymmetry, all the while significantly lowering cost of due diligence. The ultimate result is efficiency in the recruitment process and the minimisation of the risk of a poor fit.
Time for a Validated Virtual CV
There are also less direct benefits of such a system. A move to a “virtual” CV, implemented via blockchain, provides a rich, validated database for analytics. The trustworthy data provided from the blockchain, combined with Machine Learning, could allow innovative HR teams to identify patterns and traits in applicants that are preferred for different positions. Further, it could provide an answer to important questions in recruitment that are harder to see at an interview level: what skills, traits and experiences are most relevant for successful candidates in this position? What questions should I be asking this applicant? Finally, the record could further advance to give an unswerving reflection on an employee’s current and previous workplace performance, highlighting KPI’s, key roles or projects they have undertaken.
Why is this not already in place? While the concept of the “virtual” CV is valid and in many ways already represented in places like LinkedIn, challenges emerge with respect to personal data and GDPR related matters. The concept requires an applicant to agree to release their personal data to an employer, like agreeing to a background check. Who will have access to this data must be considered by the blockchain’s consensus protocol. Further, the “virtual” CV also lacks the ability to reflect the “soft skills” of an applicant, which will affect harnessing the desired company culture and projected business objectives.
Transparent, Portable Contracts
Perhaps one of the most obvious and compelling areas to implement blockchain in HR is through smart contracts. A blockchain data structure can remove the manual fulfilment of contracts and be programmed to automatically release employee pay and reimbursements. The simplicity of the online smart contracts will appeal to employees by defining the indisputable terms up front, clearly and easily. Additionally, employees then have the potential to switch contracts with employers both on and off, and this liquidity may see an effect on the number of full-time employees within companies. Transparency in contracts will allow for the portability of leave between employers, a measure that works best on an industry specific level. For the employers, the appeal lies in the streamlining of the protracted procurement process. Cutting costs and reducing frustration for both parties. The benefit of such a system can be further seen when applied to larger companies. Uniquely identifying employees within an organisation can help with restructuring, validation of work-related travel and clearly defining employee permissions within the organisation.
Beyond the hype, blockchain technology is real and it’s here to stay. Once the various architectural and consensus related challenges are resolute, it is set to become a widely adopted staple in many industries. SAP has developed a product that is ready to embrace blockchain applications, SAP Leonardo, which provides a cloud platform service for blockchain development. The SAP Cloud Platform facilitates the testing and development of blockchain networks across the full product lifecycle.