It’s almost impossible to avoid hearing about bitcoin and other cryptocurrencies with the hype surrounding today’s volatile cryptocurrency market. Everywhere you look, there’s a news segment, article, or pundit detailing the latest bitcoin upswing or crash. Whether bitcoin or other cryptocurrencies are in a bubble is a matter of debate, but there’s no denying the innovative new technology that powers these coins: the blockchain.
If you’ve heard of blockchain technology, it may sound confusing at first. Terms like “decentralized network,” “public ledger,” and “mining” are thrown around. Despite the confusion these terms cause, the core concept behind blockchain technology is actually quite simple.
In layman’s terms, blockchain technology is a system of record kept across different touchpoints or “nodes” in a computing network. The reason why blockchain is so powerful has to do with the effect of these nodes recording the same record and verifying the record is authentic.
Let’s break this down into an example that may be easier for HR folks to understand: Microsoft Word vs. Google Docs.The Best Analogy to Breakdown #Blockchain Technology Click To Tweet
Microsoft Word is a lot like non-blockchain technology. If you were to share a rough draft of a Word document, you would have various stakeholders come back with their own edits. This Word document would continually get edited with various copies of this document until you had a final draft. Maybe not everyone would have access to the most recent revised copy, some stakeholders would have the second most recent update, other stakeholders may have the third most recent update, and only you would be able to see the most updated version of the document. Stakeholders would not be able to see the final version until a copy was sent out to all parties. This process requires an intermediary (you) to verify the most updated version of the document. It is subject to a single point of failure (e.g. you forgetting to update the document or sending out the wrong version) and it is managed by a single entity (you sending out the most updated version).
By comparison, Google Docs is a lot like blockchain technology. When a document is edited, changes are made in real time across everyone’s version of the document. All previous versions are recorded and made accessible to all stakeholders. If one stakeholder were to make a future change, then the document would automatically be updated for every stakeholder. This process doesn’t require an intermediary to verify the most updated version of the document; the technology verifies it. There is no single point of failure as everyone has access to the Google document and it is managed by the group of stakeholders.
Starting to make a little more sense? You’ll notice that the world has more Microsoft Word type entities than Google Doc type entities, but this is quickly changing. Let’s look at three examples where blockchain technology can disrupt recruitment.3 Ways #Blockchain Will Disrupt #Recruitment Click To Tweet
Intuit reports that the cost of a background check for a candidate can cost up to $100 per hire*. Seeking out a third party to verify a candidate’s history is expensive and time consuming. With blockchain technology, a candidate’s verified personal information is securely stored and added to the blockchain. Employers can access this verified information with the candidate’s permission; the candidate owns his or her data and grants access to this information free of charge. No longer is this personal data owned by a third-party verifier that requires a fee.
This also can be extended to verifying candidate resumes! If a candidate resume lived on a blockchain network, then all resume information would be verified and owned by the candidate. Candidates would have full ownership and permission rights for employers to access their resume instead of partial ownership rights in a job board database, and each candidate would be able to update their resume through a blockchain verification platform.
Smart contracts are essentially programmable contracts that execute when stated contract conditions are met. This type of technology can disrupt a company’s payroll and workflow system. Instead of having a third-party HR payroll platform manage the distribution of paychecks and bonuses, a programmable smart contract can be coded with the following:
“Pay Jane Doe $2,000, if she is on the current company payroll and it is either the 15th or last day of the month. If Jane Doe hit her monthly sales quota of $25,000, then pay her 3% commission on the quota, equal to or exceeding $25,000 in monthly sales. Pay this bonus on the 15th day of the following month. If she does not reach a $25,000 monthly sales quota, then void the commission bonus.”
Jane Doe receives her paycheck and commission bonus if all statements in the contract are met. This type of smart contract can not only be used for compensation agreements, but also any type of employee benefit transaction or automated workflow, e.g. buy Mona a new computer after three years of use from her current computer, add 10 extra days of paid time off to Ryan’s vacation package if he’s been employed at the company for 15 years, order Eric and the marketing team more coffee on the first Monday of every month.
Well, maybe we don’t quite need the blockchain for more coffee…yet.
Transparency in Job Advertising
This is a hot button topic that hits home for many job advertisers. With so many interacting publishers, technology providers, and advertisers in the growing job advertising ecosystem, it’s easy for fluctuating standards in accurate and transparent traffic measurement. While many are working to develop a reporting performance standard in the space (TAtech Traffic Quality Declaration), it is still entirely susceptible to inconsistent standards.
Running the job advertising ecosystem on a blockchain would eliminate many of the inconsistencies in the job advertising space today. Defined clicks and applies would be recorded, distributed, and verified in a consistent manner across all relevant parties in the ecosystem. At the same time, bots and other web crawler traffic could be identified and distributed across the decentralized, fully public ledger, and this system of record can help mitigate many cases of bot and other ad fraud while maintaining a transparent measurement of real job seeker traffic.
The above examples may not be as far into the future as we think. Whereas AI received most of the recruitment buzz in 2017, expect to hear more about blockchain technology and its potential impact on the recruiting industry this year. Many HR/recruiting blockchain companies are starting to get off the ground, and this type of technology has the potential to power many functions in the recruitment space over the next 10 years. The seeds of blockchain recruitment technology are happening now, and it will power recruiting trends in the 2020s.
Interested in learning more about blockchain technology in recruitment? Say hi on LinkedIn or reach out to KRT Marketing for more information on the latest trends in recruitment marketing!