Ditigal Tsunami. Adopting blockchain tech in HR

For three years and one day, carpenters in Germany go on an apprenticeship tour. They carry a small book where the master carpenters they have worked for provide details of the work they have done. The reference is then stamped. That serves as evidence of expertise of the newly minted carpenter. It provides a document that shows the acceptance of the young journeyman to be a member of the carpenter’s guild.

Trust but verify

Human beings need to trust each other before they can engage with each other. Doctors, especially those who have qualified recently, display their certificates to gain trust. According to the Union Government’s rules, anyone who has done a Homoeopathy, Ayurveda, Naturopathy, Unani, Siddha or Sowa course is authorised to treat a patient. But they cannot prescribe allopathy medicines. The patient has no way of knowing what kind of medicines the doctor is authorised to prescribe. This sets up conditions ripe for fake doctors and fake medicines.

Imagine that you could use an app to routinely verify your doctor’s credentials before making an appointment. The patients would know which degrees the doctor has and how frequently they have upgraded their knowledge. Blockchain technology could make it possible. Trust needs to be verified, especially when we learn that there are scores of fake doctors who know that there is no way of verifying their credentials.

That may be changing soon thanks to blockchain-based solutions in governance with digital certification of education degrees, which will be issued using the distributed computing technology starting with batches graduating in 2019. IIT Bombay and colleges under the Delhi University will be the first ones to receive these indigenous blockchain-based credentials, called Indiachain.

The biggest beneficiary of blockchain tech could be a firm’s HR function. Today 58 per cent employers have caught a lie on a resume, according to Careerbuilder. People embellish skills, responsibilities, employment dates, job titles, academic degrees, companies worked for, accolades/awards received, everything that can give them an advantage in their career. MIT has launched Blockcerts to verify blockchain-based certificates for academic and professional credentials, workforce development and civic records.

Blockchain technology would create a distributed ledger where every authorised institute would document the list of candidates who have completed the academic requirements leading to the degree or certificate. That could prevent people submitting fake degrees from fake colleges and fake degrees from real colleges. Every IT firm has a list of fake organisations that provide fake degrees and fake certificates of work experience.

New patterns of work, learning

People change jobs, take breaks, pursue multiple careers and take on work that technology now makes possible. The average tenure for millennials is shorter than older generations. According to PwC, millennials have a strong appetite for working overseas and 71 per cent expect and want an overseas assignment during their career.

Money transfer between countries is an expensive process. Bitwage uses bitcoins to transfer money between countries and pays the worker in the local currency without the expensive fees of middlemen and banks.

Learning patterns have changed. The shelf life of degrees is reducing and people are taking on informal ways of keeping themselves updated. Tracking formal courses, online certifications, badges and digital credentials, and projects done for the employer could be automatically tracked and updated on the resume of the employee using blockchain tech. Imagine a verified version of LinkedIn available without the lies and garnishing rampant today!

Smart contracts for gig workers

Smart contracts between employer and employees could make it possible for people to be paid automatically for their patents. Identifying the copyright of a song and defining how royalties should be split between songwriters, performers, publishers and producers is difficult in the digital space.

Often artists lose out on royalties due to a complicated copyright environment. Blockchain technology can create smart contracts where the code will determine what happens when money comes in or some conditions are created. That means the distribution of money can happen instantly with no chance of frauds or delays. Attorneys are already trying to create smart contracts that may automate the distribution of money. Imagine if smart contracts became the norm while hiring!

Gig workers could benefit from such a system of contracts and payments. Already, some of the biggest firms are trying to rethink their contracts based on this technology. Maersk is working with IBM to create a company that will use it to track cargo. Walmart is using blockchain technology to track livestock from China as it moves through the supply chain.

Talent scoping

Verifying credentials is a leading cause of delay in hiring. Background verification is expensive. Candidates with fake certificates routinely get hired by a rival firm after being rejected by a firm that uses a rigorous and expensive background verification process. A distributed ledger that is tamper-proof could solve this problem for the employer and the employee.

Today it is hard to verify information about degrees and credentials across countries. Work history is equally hard for employers to unravel. In some countries the general manager is the senior-most role of the organisation while in some others, that position would be held by a managing director. Some companies have managing directors for each function. Blockchains can create the translation needed as talent goes boundary-less.

The scenarios are equally complex for job-seekers. Their previous employer may have been acquired or gone into bankruptcy. A small independent startup may have been acquired by a giant and then spun off into a different division altogether. The person may have remained in the same job and in the same team. But the name of the employer may have mutated several times over. Blockchain tech could help track each change and establish the credentials even as the names of the employer change.

Open questions

Every piece of the digital tsunami will raise questions of data ownership, access and privacy. The laws will have to evolve to address the new world of work. In some companies and in some countries, it is illegal to enquire about salary history or disability status. In others, such discussions are part of the hiring process. These are questions that need to be debated. Should the employer post performance data of the employee in its records that are searchable by others? Should psychometric test results be accessible to a future employer? Right now there are more questions than answers. But one thing is certain, HR will have no choice but to start embracing blockchain technology and redesign the notion of trust in organisations.

(Abhijit Bhaduri is a talent management advisor to many organisations and coach to several CEOs. He is the author of The Digital Tsunami)

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