Transparent future of work enabled by Blockchain

There is growing consensus that career - as a vertical progression along a corporate ladder does not hold good anymore. With marketplaces for skills picking pace and increasing commoditization and breaking work into gigs, the notion of full-time employment will become even more bleak in the coming years. One crucial technology that will facilitate end-to-end working in this Future of Work is undoubtedly blockchain and related technologies. 

At the heart of blockchain technologies is a “a shared, immutable ledger” which helps record transactions and tracking of assets. These two attributes - shared and immutable render this technology powerful, thereby bringing transparency and traceability to its users. It is encouraging to see mature discussions around use-cases of blockchain technologies evolve beyond the shadows of just one of their applications - the cryptocurrency. 

Can blockchain powered technologies build better transparency and remove information asymmetry challenges in the world of work? Emerging use cases from around the world suggest they can.

According to the 2019 Mercer Mettl State of Talent Acquisition report, finding quality talent is still a major challenge for small and mid sized companies and the time to fill increases considerably with seniority of the position. Cost to hire is another key metric that keeps HR leaders awake at night. Some of the key factors affecting this key HR metric of time to fill are screening, skills matching, interviewing and assessing person job fit via a battery of assessments, including psychometric tests and background and reference checks. A 2021 study commissioned by LinkedIn shows that 90% of surveyed firms resorted to filling positions internally and merging various positions in a bid to reduce the acquisition costs. Blockchain could prove to be a blessing in such situations to make better and data-led talent decisions. The findings of this study reveal the truth behind hiring in a post pandemic world. 

HR managers would agree that some performance challenges and unpleasant separations could have been averted with robust background checks. Blockchain-backed technology allows employment history and qualifications including degrees and credentials to be verified by employers. Employers can save a lot of time and resources spent in background checks, checking each referral and deal better with the information asymmetry by using blockchain based solutions. 

Traditional recruitment processes are rendered slow due to multiple rounds involved in the selection process - interviewing, tests, background and referral checks, skills assessments, person-job-fit decisions and sometimes even psychometric assessments. It is safe to assume that a similar assessment may have already been done by the candidate’s previous employer (s). What if this data, along with their performance scores as well as upskilling journey are all available in one place? It would be much more efficient to use the validated data than create it again, afresh. 

Another important aspect of this transparency is that individuals / employees can control who can view their data and for how long  they can do so. This ability to exercise individual agency when it comes to one’s own data makes this whole approach more powerful.

Employee data and its protection has been an ongoing global debate. Employers hold large volumes of employee data. These include health and insurance details of the employee as well as their family and dependents, health histories, salary and related financial data, performance data, skills and degrees, employment histories - and many more. While legal guidance around employee data protection differs from  country to country. India’s legal position on this is still evolving. However, there is growing consensus that employee data must be collected and maintained securely. Blockchain enables this seamlessly by giving employees the power to manage access to their Personal Identifiable Information (PII). Employing blockchain technologies also reduces the probability of  incidence of a single point failure - which refers to the vulnerability or loss of data because one single platform, having all the PII was compromised - thanks to the distributed ledger. For employers, this also reduces the burden that may be placed on them to ensure complete security of employee data while also giving them access to verified, validated and transparent sources of data. 

Blockchain powered smart contracts have been garnering quite some interest. One of the strongest arguments in favour of such automated contracts is that it enables removing intermediaries. From onboarding of a new hire, setting up their IT profile and access to both physical and digital areas of work to paying them for the work they deliver - can all be done seamlessly and to a fair extent - automated. 

Blockchain has already started getting deeply intertwined with our data - even before we recognise it. It is but natural that we have apprehensions around this distributed technology. What will be the impact on the role of recruiters? What will happen if we lose control of our data? What if unauthorised access to data happens? If all of our data is on the blockchain, will resumes be a thing of the past?  The answer to all these questions will evolve - from different parts of the world, but the positive impact of blockchain and the transparency it brings to various aspects of work cannot be underplayed. Over the coming months, HR leaders will need to work on leveraging blockchain.Taking stock of the areas within their organisation that will need to transform to leverage blockchain will be a great starting point for people managers, which can go a long way in defining their HR powered by blockchain roadmap.

Employees on the other hand will need to work with multiple stakeholders to ensure that their data is current and updated and take the steps required to secure them - in short, exercise their agency. 

The article has been written by Anitha Kaveri, Head, Sectors and Special Projects, IET India