Blockchain. Seems like everyone’s talking endlessly about it in the media. Organizations of all kinds are jumping on the hype bandwagon, peppering their marketing with the term and hoping it makes them appear savvy and innovative. But what is blockchain actually? Bitcoin? Cryptocurrency? And more importantly is there any relevance to the staffing industry? If so, how could blockchain technology be harnessed to drive value for workforce management?
The answer to all these questions can be distilled into a single word: “disintermediation” which is defined as the elimination of the middle man. Our 20th President, James Garfield rightly stated, “He who controls the money supply of a nation controls the nation.” Central banks controlling the money supply exert outsized control over the economy and many blame central bankers for currency manipulation resulting in the crash of the global markets in 2007-2009. It was during the aftermath of this market cataclysm the creation of the blockchain was catalyzed.
No one is certain who invented the blockchain although the commonly held belief ascribes the invention of the blockchain and Bitcoin currency to one Satoshi Nakamoto. No one knows who Satoshi really is, and in fact, many believe there is no such actual person. You can read this Wikipedia entry for details on the mystery of blockchain’s origins and creator(s). Regardless of the identity of its invention, Blockchain technology is presumed to have been developed for the purpose of recording secure transactions like financial events, like medical records, identity management and others. Blockchain’s founders wanted to develop a secure system to operate outside the confines and strictures of central banks, proving the provenance and security of financial transactions in a completely neutral and private fashion.
The blockchain itself is a global network of decentralized computers that operate as a digital, public ledger which is used to record encrypted transactions across many computers which are linked together with similar peer-to-peer connections used by file sharing services and the like. This decentralized and anonymized network ensures records cannot be altered retroactively because any local changes would be identified as different compared to all the subsequent blocks recorded on networked computers across the network. This technology enables all participants to verify and audit transactions yet allows no one user or networked computer to change or manipulate data.
So what does blockchain technology have to offer the workforce management industry? Well, considering it is a technology purposefully designed to support encrypted verification of secure data, prove authenticity of transactions, safeguard strict privacy requirements, and maintain a pure, single source of “truth” regarding transactions, it seems like there can be significant applications for workforce management.
According to a Staffing Industry Analysts report on emerging uses of blockchain outside of the financial arena, the technology could be used to house CV data ensuring respondents are not being untruthful in what they claim on their resume. Workforce management companies spend significant time validating the information candidates include in their CVs. Job seekers often try to maximize their chances of landing employment by registering with multiple agencies – often including different information on each registration. Blockchain could be used to provide a neutral means for authenticating a candidate’s qualifications that would be accessible by all agencies and hiring authorities.
SIA says, “Potential applications in recruiting include an immutable work history or CV built on blockchain technology, better referral systems, better processes for background checks, easier cross-country payments, or even a protocol specifying the rules for an entirely autonomous, decentralized staffing agency or MSP.”
The possibilities are numerous and the above strategies are just the tip of the iceberg when it comes to practical applications of blockchain tech in the workforce management realm. As with any new and truly disruptive/transformative technology, there are still many chapters of innovation to be written and solutions to be developed. This is one of the areas nextSource is continuing to monitor so that we’ll be ready to guide our customers on best practices for use and utilization of the latest and greatest tools to help them achieve total workforce management goals.