Unless you’ve spent the past year in a cave, there’s a good chance you’ve heard the word “Bitcoin.” Indeed, most of the buzz around blockchain is due to the sharp increase in the value of Bitcoin—the best-known use of the blockchain principle in the world of cryptocurrencies. According to some, these digital currencies are poised to truly shake up the international banking and finance system.
Yet what is generally less well understood is that blockchain is not just a fast way to make a lot of money for Bitcoin investors and new-technology buffs. In fact, although it’s not yet living up to its potential, this technology is expected to have a direct and fundamental impact on the way we organize most modern corporate systems—and not just in the financial sector. From online protection against identity theft through to managing driverless cars, blockchain’s applications are virtually endless.
This disruptiveness may also have a major impact on the job market, where blockchain could transform the way candidates search and apply for jobs, and how they manage their salaries and other administrative processes once they’ve been hired.
First, what’s the exact meaning of the mysterious term?
Basically, blockchain technology creates a decentralized and secure registry that gives users a way of validating information involved in a particular transaction. It speeds up processes and takes out the middlemen, making the process safer, more transparent, and more efficient.
When we vote, how do we know if our ballot paper is actually taken into account? And when we buy fair-trade coffee, how can we be sure of its origin? To ensure we have the right answers to these questions, we need a system where data can be stored and verified by anyone, and have guaranteed security.
This is where blockchain technology comes in.
Without going into the technical nitty-gritty, blockchain works by using blocks of information linked together in a chronological chain, which itself is stored and secured using cryptography. By building a distributed network that is difficult to corrupt, blockchain technology offers a secure way of permanently storing information on a global computer network.
Blockchain technology in the employment sector
Although the uses of blockchain in the job market are still in their infancy, there are three ways this technology could transform how applicants interact with recruiters in some key processes, and how they make certain decisions about their workplace once hired.
1. Hiring applicants
A recent survey by CareerBuilder revealed that 58% of employers had found false information on CVs they had received at one time or another. Ensuring the accuracy of this type of information is still one of the most time-consuming tasks for human resources (HR) departments: Checking references and certificates simply takes too long and is too expensive.
By providing unalterable or “traced” digital records, blockchain technology promises to speed up and automate how employers check information about prospective employees’ identity, facilitating better matches between candidates and positions. This process will also boost productivity, which is crucial for small- and medium-sized enterprises (SMEs), who struggle to recruit the right candidates.
But improved matching does not only benefit companies. As a future job seeker, your educational institution could also add your degree to blockchain. This will significantly cut down the time spent by your employer verifying your references, so you’ll be hired much more quickly.
More importantly, employers will have access to reliable, “dynamic” CVs based on blockchain technology, meaning candidates will have their CVs updated by previous employers and so be assessed according to their most up-to-date experience and skills, and not only those they choose to share on their CV. Therefore, blockchain technology could mean one less step in the interview process, allowing businesses and future employees to focus on what really matters: personal goals and aspirations, or the candidate’s compatibility with the company’s business culture.
A blockchain CV would also be better protected against fraud. Since the advent of digital recruitment platforms, it has become quite common for cybercriminals to impersonate companies or recruitment agencies to target potential employees and gain access to their data and information. As shown in a recent report by the multinational professional-services network PWC, which is itself vulnerable to cyberattacks due to the emergence of digital recruitment platforms, similar companies could use blockchain technology as a fraud-prevention tool and to boost their cybersecurity.
But a blockchain CV goes beyond protecting future employees from cyberattacks—it will also give them total control and ownership over their data, marking a profound change in the way we design and manage personal data.
On platforms such as LinkedIn, data is currently collected centrally and then resold to users. But blockchain technology could pave the way for a truly decentralized social network, where data is controlled by individual users. This would give them the opportunity to monetize their expertise through micro-payments for providing content, comments, or completing specific tasks. One of the first users of this specific application of blockchain is a platform called Steem, which uses a blockchain-based rewards system to encourage contributors to monetize published content and develop the community. To find out about a potential candidate, recruiters can directly consult their data at the source—that is to say, from the applicants themselves—rather than pay a platform to access it.
Some companies have been quick to spot the potential of blockchain technology. The career-verification platform APPII has helped Technojobs to become the world’s first website to offer employers verified CVs using blockchain technology. Likewise, Jobeum uses this technology to create a “recruitment tool similar to LinkedIn,” while HireMatch uses it to help users reduce their costs when searching, interviewing, and hiring new recruits.
At the same time, new laws and regulations will have to be rolled out to protect job seekers’ privacy once this data-verification technology becomes more widespread, while still ensuring that the system remains useful for companies. It may take years, however, to strike a balance between regulation and efficiency.
2. Smart contracts: less paperwork, faster integration
For new employees, blockchain doesn’t just speed up the process of paying salaries, it could well get you off to a flying start with your new job by simplifying one of the most frustrating and time-consuming aspects of taking up a new position—your contract.
Indeed, thanks to a “smart contract” based on blockchain technology—that is, a contract that automatically triggers an action on the blockchain when certain conditions are met—you can do away with a number of administrative protocols, such as identity checks, passwords, email templates, and checklists, which often considerably slow down new employees’ progress during the first few weeks in their new role.
It’s this potential for speed, transparency, and decentralization—combined with the major reduction in transaction costs and operational risks—that make blockchain technology an interesting alternative to the way contracts are currently managed.
Large businesses such as Oracle have recently filed a patent to use blockchain technology to improve their employees’ workload efficiency, yet not everybody believes in the security of smart contracts based on blockchain technology. A recent study by University College London (UCL) analyzed almost a million smart contracts hosted on the blockchain-based platform Ethereum and estimated that more than 30,000 of them were deemed “vulnerable.” Security issues are therefore a real concern.
Smart contracts also pose legal issues. In most countries today, a contract is signed based on an unspoken agreement based on “good faith and loyalty,” assuming that both parties will treat each other in a fair way and uphold their mutual contractual benefits. However, it must still be determined how a self-enforcing automatic agreement such as a smart contract could include a legal principle based entirely on human trust.
Indeed, in their current developmental stage, smart contracts are unable to process all the possible changes to the various factors associated with a contract. For example, what happens if one of the parties feels prejudiced and later wants to terminate the contract? Until now, the signs suggest that human involvement is still necessary, at least as a way of resolving issues if things don’t work out.
3. Crypto salaries
Lastly, but perhaps most importantly, blockchain technology has the potential to radically transform the way you get paid by your employer.
Today, employees who work for international companies and are often based abroad may find the simple action of receiving a paycheck every month a real problem. Fluctuations in currency-exchange rates can have an impact on the relative value of their salaries and international bank transfers are known to be very slow. This is mainly because, in order to issue a payment, banks and other intermediaries have to undertake a series of transactions and administrative checks that significantly delay the payment process.
In a world where time is money, blockchain is a way for employees to be paid more quickly, if not instantly.
Let’s take Bitwage as an example, a new payment platform that combines blockchain technology with mobile and cloud technology to facilitate international payments. Bitwage uses Bitcoin—the most well-known and most popular cryptocurrency—as an indirect means of payment. In other words, as an employee, you always get paid in your local currency, as Bitwage converts Bitcoin into local currency, thereby eliminating the risk of losing value.
Chronobank, meanwhile, removes the need for intermediaries by using blockchain technology to enable payments to move directly from the employer to the employee. In the same vein, the English musician Imogen Heap recently attracted attention by using smart contracts based on blockchain and Ethereum—also an alternative cryptocurrency to Bitcoin—to get paid for her music. This meant she was able to make the contract completely public, fair, and transparent, without the need for any intermediaries such as Spotify and Deezer. Although this example is rather unusual and daring, it points to a future where payments will become personalized.
Of course, these systems depend entirely on one or more cryptocurrencies (such as Bitcoin) being accepted as a shared and established means of payment, which is currently not the case. But this does not detract from the fact that by accelerating the payroll process dramatically, blockchain technology has already demonstrated its potential and ability to significantly accelerate the way employees are paid.
Blockchain and HR: beyond disruption
However, all this should not reduce the concept of blockchain to be regarded merely as a “disruptive” piece of technology, able to shake up traditional business models with less-expensive solutions. Blockchain is a key technology that has the potential to create entirely new economic and social building blocks. That’s why there are major complexities and obstacles hindering its adoption. It will probably be decades before blockchain can really be used extensively, even though its benefits are likely to outweigh the cost of adopting it, though only in the long term.
In terms of HR, blockchain is changing the very nature of certain fundamental processes, from recruitment to subcontracting, through to payments. It could really make life easier for job seekers and employees. Of course, this does depend on the large-scale adoption of this technology by companies, who still consider it a risky venture. Therefore, applying blockchain to small processes initially is a good way of testing it out.
Whatever the specific context of its use, it is very likely that blockchain technology will radically change the rules of the game. So the real question is not if, but when?
Illustration by Marcel Singe
Translated by Matthew Docherty
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