Technology

How Blockchain is Changing The Hiring Process

What every HR and org needs to know about how blockchain technology is changing the hiring process
Zain Zaidi
4 min to read

The Broken Background Check

A resume is useless. As an employer I have seen hundreds of resumes and each one poses the same question. Is anything on here actually true? Anyone can say they were an ex-employee at Apple or Tesla or that they graduated from Stanford or Harvard. How do I know that any of this information is true?

In comes the background check. Either myself or a company I hire spends days if not weeks meticulously going to every single institution and manually verifying the information provided on the employee’s resume. But people make mistakes. What if the person I contact at Apple mistakenly tells me that my applicant never worked at Apple. How is it fair that now this applicant will not get the job offer because of someone else’s mistake. Or what if the opposite situation occurs where I get a false confirmation that the applicant attended a university or worked at a job they never did. Now I have hired a fraud into my company.

Both examples point to a larger issue in the hiring process which is the limitations of a background check. Background checks are archaic in every manner. They are prone to human error, are prohibitively costly, and take too long to complete. The inefficiencies in the background check industry is the reason why by some estimates resume fraud costs employers 600 billion dollars annually. Clearly, there is a need to rethink the background check and the blockchain might give us the solution we are looking for.

Blockchain’s Role in Document Verification

While blockchain may be synonymous with Bitcoin and other cryptocurrencies its potential far exceeds that of just serving as the underlying technology in crypto. As an immutable ledger it is the perfect tool to record transactions between two parties. In the case of crypto these are financial transactions. However blockchain could also be used to verify work and education history by recording document transactions. For example, an employment verification form that was sent directly from the employer to the employee could be authenticated by the document’s blockchain transaction history. Due to the nature of blockchain, this auditable trail cannot be altered or manipulated and the contents of the document cannot be changed once uploaded. The beauty of utilizing the blockchain as a means to create a network of verifiable documents is it removes the need for a third party background check company to verify employee credentials

A sample blockchain document transaction history from TransCrypts.com. TransCrypts is a tool for HRs to automate the issuance of employment and income verification forms using the blockchain. In this example, the blockchain transaction history validates that John received his employment verification document from Netflix, and is thus authenticate.

The Changing Hiring Process

If an employee at any given time has access to their verified work and education history the landscape of the hiring process will be changed forever. A world of blockchain based documents would usher in a world where an applicant could provide proof of work and education history directly on their resume. This would completely change the hiring process for both the employer and the employee. From the employer’s perspective, gone will be the days of worrying about hiring fraudulent candidates based on falsified or exaggerated resume claims. Gone will also be the days of dealing with expensive and time consuming background checks. Now an employer can verify the credentials of an applicant at the time the applicant submits a job application. This can help employers narrow down legitimate applicants and speed up the hiring process. Furthermore, by removing the need to do a background check employers can fill positions faster. From an employee’s perspective having complete control over their work and education history can insure greater privacy and control over how their data is being used. An employee will no longer be at the hands of a background check company or their past employer or previous university to decide whether or not they get a job.

In conclusion, a future where employment and education documents are uploaded and shared on a blockchain network can greatly improve the hiring process for both employees and employers. As we veer more towards a digital society, the need for archaic manual background checks is coming to an end. Blockchain will revolutionize the hiring process and the quicker we can adopt it in the HR and education space the quicker we can streamline the hiring process for everyone involved.

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