A Blockchain Revolution in Human Resources

From the venture capitalist to your grandma, many have been bit by the cryptocurrency bug. They may not understand it, or the technology cryptocurrencies like Bitcoin are built on, but regardless, they want in because of the meteoric rates of return.

I, however, think Bitcoin is the fidget spinners of fintech: an overhyped toy that will eventually fade with time to make room for superior cryptocurrencies and blockchain products with real-life applications. I am thrilled for blockchain–the technology that cryptocurrencies are built on– because of its potency and its ability to disrupt nearly every industry to some degree, including human resources.

Although there are many applications, I will go over three that could potentially occur in the next ten years within HR. If you are unfamiliar with blockchain, here's a great resource on understanding blockchain before continuing.

Resumes and certifications: impossible to lie about.

It is not uncommon to know of someone who has lied about their educational or professional experience on their resumes–even CEOs of high profile companies have been caught lying. Blockchain would change that. For example, an educational institution could submit a completed degree for a person onto a blockchain. The information would be stored and available for employers to access should they be on the same blockchain; however that is also decentralized and stored with all the users of that blockchain. So, if that person wanted to lie, they would have to take over the entire blockchain which is essentially impossible.

A next step application would be smart contracts where employers could place educational requisites in the job description, and in order for a resume to move through the pipeline, they would need to be at or above that requirement. Theoretically this would reduce the volume of low quality resumes, and as such recruiters could suffer from less burnout from wading through countless resumes and consequently they could provide higher quality experiences to promising candidates who made it through.

Naturally, this concept could be applied to anything else sitting on a candidate's file: previous job experience, grave misconduct issues (i.e. sexual harrassment), etc. with the goal to improve the hiring experience. Of course, this would be subject to uncognitive bias, and as such calibration and inclusion of non-traditional experience would be needed.

"Decentralized" unions, with a low chance of corruption and low fees.

In an industry where organized labor is present, workers can either join, or not join a union. However, Bitcoin may present a third, more appealing option: the "decentralized" union.

In order for this to work, employees would simply sign their smart contracts then submit them to a shared blockchain along with their representation cards. As the union begins to develop, the members can put their bargaining agreements for their employer to see, and hold elections for union leadership positions if any are needed. All of this can occur without a centralized authority, which means a higher degree of control over information, lower pervasiveness of corruption, and most importantly lower union dues.

Background checks, and other verification documents: cleared in seconds.

One of the most painful, if not the most painful aspects of joining a new company for candidates and HR professionals is the paperwork. Many times, HR professionals have to grovel through processes like background checks, at the expense of their time and the company's money. Verifications can take days, sometimes weeks.

However, this could change on a private blockchain of employers and employee screening companies. We would see nearly instant results, lower costs, and quicker times to hire. Blockchain benefits from network effects and once at critical mass, it can process multiple requests in seconds. As a result of needing less resources to perform a high volume of background checks, screening companies can drive down the prices severely to include newer employers while maintaining similar if not higher levels of profits. For employees and employers, the other benefit would be that employees could literally interview, receive an offer, finish a background check, and show up to work the same day. This would help the employee produce income instantly, and help the company become productive immediately. The entire process could become painless and friction-free.

Closing Thoughts

Blockchain is an exciting piece of technology that will provide a higher level of security, transparency, and speed for all parties involved. It will reduce painstaking HR processes for candidates, employers, recruiters, and union members.

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Kunal is an investor, HR professional, and writer. He was recognized as a Linkedin Top Voice in 2016. You can follow him on Twitter (@KunalKerai) or send him any wonderful insights you may have to kunal@berkeley.edu.

The views and opinions expressed in this post are solely mine and do not represent the views of my current and/or previous employers.

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