This new technology isn’t limited to digital currency.
Blockchain is the underpinning technology of cryptocurrency. It is an encrypted digital ledger of public records organized into groups of data blocks that are distributed over trusted networks. Once a record has been added to the chain, it is difficult to change, and constant checks to the network verify that the content is valid. But if you think this technology has no relevance for talent development, think again.
Simply defined, blockchain is a record-keeping technology, and the talent management team is responsible for updating, maintaining, securing, and sharing a bounty of employee information. How blockchain verifies and automates the flow of data makes it a natural conduit for confirming workers’ skills, knowledge, and experiences. This could a be a game changer for recruitment, succession planning, and compliance-related activities.
Here’s how it works: Each block is a record of a new transaction, such as earning a formal degree. When a block is completed, it’s added to the chain, which could equate to a person’s resume. An individual or company is assigned a digital ID that signifies its address on the chain, and that’s where the person or organization can introduce and confirm new data (or blocks). A key advantage of blockchain is that data held within the system cannot be deleted or changed once verified.
A CareerBuilder survey found that a whopping 58 percent of employers have at some point found false information on an applicant’s resume. Screening the accuracy of this type of information is currently one of the talent management team’s most time-consuming jobs. Blockchain has the potential to streamline the tedious work of verifying a candidate’s employment history and education. It would take minutes, rather than days, to confirm data, because a potential employer could simply pull up the public blockchain.
Blockchain also enables job seekers to easily share university-verified data on the degrees they’ve earned. Case in point: The Massachusetts Institute of Technology now offers digital diplomas through blockchain. MIT maintains an enrollment of around 11,000 students, so validating who is a student is an important dimension of the registrar’s work. Currently, potential employers need to connect with the National Clearinghouse to confirm MIT degrees, which can be time consuming and costly.
Mary Callahan, senior associate dean and registrar at MIT, explains that moving to blockchain reduces fraud. What’s more, students own a verified digital diploma that they can share with others, in addition to the standard physical document. “The student has total control about where it goes. It’s their record. They earned it,” says Callahan in an Enrollment Growth University podcast
Meanwhile, instead of job candidates preparing a formal resume that describes where they’ve worked and what they’ve done, blockchain transactions will simply store their employment history, certificates, and other credentials like digital badges earned through massive open online courses or internal training programs. As these work credentials move from paper to the digital space, applicant tracking system tools take over the process of collecting official certificates that represent applicants’ qualifications. This means recruiters can assess prospective employees with confidence that the information they supply is accurate.
With recruiting software now beginning to incorporate blockchain, learning management systems won’t be far behind. The same technology can be used to capture and share internal employee learning records, verifying workers’ training and skills. This is good news for talent development professionals responsible for compliance training.
Data reported in Financial News suggest that firms spend approximately 4 percent of their revenue on compliance, and that number could reach 10 percent by 2022. In fact, nine in 10 compliance executives at banks, capital market firms, and insurance agencies expect the cost of compliance to rise over the next year or so. Experts believe that one way to mitigate these costs is by using smart contract technology on the blockchain. According to CompTIA, 49 percent of companies are already implementing blockchain, using the technology for compliance and auditing purposes.
Blockchain’s capability to combine verified internal training and compliance information with formal education and employment histories will create a complete picture of every employee’s skills and capabilities. This will help companies make better decisions about employee development plans and influence what recommendations managers need to include in performance reviews. Ultimately, the trusted information that blockchain provides would enable strong performers with documented qualifications to rise to the top as well as bolster succession planning inside organizations.
No doubt, blockchain is widely discussed, but professionals not already working with digital currency scarcely understand it. And although it is just starting to garner serious interest in the talent development industry, broad consensus is that it has the potential to disrupt current practices. Talent development executives should be proactive, bolstering their knowledge about the nuts and bolts of blockchain, so they can be at the vanguard when it reaches the leadership agendas of their organizations.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.
