Every industry, organization and business tries to act strategically, looking for ways to enhance efficiency and cut costs, to work less while getting more done, to not be left behind. Technology plays an integral role, but its adoption does not always lead to changes for the better.
Nevertheless, technology is driving progress (and vise versa), transforming processes and presenting new models of operation. New technologies are pushing some industries and jobs into oblivion, while breathing new life into others, creating new jobs and whole new markets.
For example, think about the dramatic changes brought on by the Internet. Back in its early days, many were neither optimistic nor enthusiastic about its advent. But today the technology is actively utilized by the majority of world’s population, including industries and organizations. In fact, most could not survive without it.
There is hardly a single industry in the world that is not impacted by technology, at least to some extent. And now there is another promising technology — blockchain — predicted to become mainstream in nearly every industry over the next several years.
David Drake, the chairman of LDJ Capital and one of blockchain’s thought leaders, says:
Blockchain has been making noise and disrupting several industries, including the finance, energy, and real estate sectors. The traditional banking system is also being threatened by blockchain, and if they don’t embrace it they will be replaced because the efficiencies in these platforms are circumventing the high fees that the banks are charging.
Aside from finance, energy and real estate, blockchain has broadened its scope of application to insurance, healthcare, law, retail and more. According to Deloitte, people today show 2000% more interest in blockchain than they did in 2013, and we will only see this number grow, requiring industries to be ready and able to adapt to changes.
So what exactly is blockchain?
Generally, blockchain is a database, but not in the traditional sense. On blockchain, all data is securely locked and stored in blocks that link to each other by means of cryptography. Unlike traditional databases, blockchain is a completely decentralized technology, meaning that data is distributed and copied between every node on a peer-to-peer network. At the same time, stored data cannot be stolen or altered by any user acting in bad faith.
Each new block with information — be it transactional data, events or facts — must be approved by all nodes before it appears on the chain. Blockchain creates an environment with no room for false entries, because incorrect data will be detected and will not escape the notice of other blockchain users. With its ability to validate and authenticate facts and transactions, the technology is a Holy Grail for industries that rely heavily on data accuracy and the reliable performance of intermediary organizations.
How can blockchain make or break HR?
HR is data-intensive, and oftentimes requires the involvement of third parties in its processes. Even though the HR industry has undergone some changes with the adoption of new technologies and solutions over the past decade, it still suffers from its own inefficiency in terms of recruitment processes and management.
Gone are the days when candidates received a university degree and chose to grow and build their careers from the ground up — from clerk to department head or higher — within the walls of the same organization. Today, employees — millennials in particular — prefer to change employers every 2.8 years. Moreover, they are always in search of self-improvement through training and education.
These activities add extra credentials to a candidate’s resume (compared to an older worker), introducing some major challenges to HR professionals. The HR landscape does not stand still. However, recruitment processes still rely overwhelmingly on a candidate’s CV and verification of its accuracy.
Some might be surprised to learn that almost 60% of job seekers provide false information on their resumes. So it follows that as much as 60% of the time an HR professional dedicates to resume verification is a waste, because candidates with false credentials never end up filling available positions.
Today, outsourcing has erased national boundaries, although not language barriers, and HRs are dealing with numbers of candidates from multiple countries. Hence, resume verification consumes an even greater portion of their time and involves greater expense.
Considering the nature of the technology and its working principle, blockchain could save HR professionals headaches, time and resources. Blockchain is a database that can store any sort of data with no risk of being falsified or tampered with, and employment and criminal records are no different. With blockchain in place, a candidate’s background verification would be instant, accurate and cost-effective.
On the other hand, blockchain might challenge the necessity of HRs altogether, and put the sphere at risk of disruption, if not extinction. According to some predictions, by 2020 more than 40% of the US workforce will be engaged in a gig economy, working as freelancers and independent contractors. Blockchain startups like Chronobank and Opporty are shifting their focus to streamlining the process of short-term recruitment and instant payment in cryptocurrencies.
The likelihood of seeing a completely different concept of HR and recruitment in the near future is undeniably high. Blockchain is creeping slowly into our everyday lives, impacting the way we do things. Changes will take place sooner or later, and who knows whether they will force HR to make sweeping changes, or eliminate the industry for good?
Read more about HR in our sister publication 42Hire.