W&F Issue 4 2018

www.wealthandfinance-news.com 8 Wealth & Finance International - Issue 4 2018 Thanks to the media buzz surrounding cryptocurrencies such as Bitcoin, blockchain has become one of technology’s hottest topics. Blockchain, the technology behind Bitcoin, has much more to offer than just new forms of currencies. Security and trust are the major factors influencing a service or system’s success and with this, blockchain is now set to transform every major industry we know today. The recruitment industry has seen many changes over the last five decades especially following the introduction of the internet. Online recruitment platforms, application tracking, and talent management systems revolutionized hiring twenty years ago, expanding both the job and candidate pool far and wide. More recent aggregation, syndication, and consolidated online recruitment solutions have taken the main stage by supporting recruitment agencies in placing candidates into companies. However, instead of making the hiring process more efficient, technology has just added more time, costs, and fraud to the industry. Blockchain technology offers the recruitment industry the opportunity to completely reinvent itself. Communication, certification, and trust are built into the framework of blockchain and are coincidentally key factors for having a successful hire. Communication: The current recruitment process relies heavily on three lines of communication between client, recruiter, and candidate. The recruiter sits in the middle, serving as the intermediary between the candidate and the client. Recruiters introduce candidates and divulge information in a way that is beneficial to them, rather than the client’s best interest. Information may be withheld; poorly suited candidates may be presented all to justify the recruiter’s position. This lengthens the recruitment process and can lead to malpractice, with recruiters purposefully focusing on their commission prospects rather than making a match that’s a good fit for all parties. Blockchain with its decentralized network and open peer-to-peer communication will completely change the recruitment process by allowing candidates and clients to engage directly with one another. This, of course, raises the question of trust. How can an employer or potential employee be sure they’re dealing with the person they believe they are? How can you verify the skills, experience, and achievements listed on their resume? Trust: Recruitment agencies have always been in charge of conducting due diligence on these factors, however, it isn’t a perfect science. Candidates are notorious for falsifying information on resumes; lying about everything from job duration and responsibilities to their references and skills. Since blockchain is a recorded, public ledger of information shared across thousands of machines it be corrupted, changed or tampered with. The ledger is recorded over separate hardware, accessible only by verified users whose every action is recorded in the ledger. Utilizing this property of blockchain, companies will be able to rely on references and records of a candidate’s performance as told by a trustworthy source and recorded on the blockchain. This removes the ability of a candidate to edit, amend or completely change their history; meaning that the information provided in resumes can be researched and supported (or exposed as false). Hiring companies will be able to look to the blockchain for all their reliable reference and documentation needs to ensure their newest hire is exactly who they claim to be. Certification: Certification, or physical proof of skills by practical demonstration – has proved difficult within the recruitment process, especially within the technology space. Blockchain will provide a platform for candidates to demonstrate their capabilities and have this certified by other trusted users, such as former employers, colleagues, How Blockchain Will Affect the Recruitment Industry Arran James Stewart is the co-owner of blockchain recruitment platform Job.com. He discusses the issues around blockchain’s effect on the recruitment industry of the future. or academic institutions. This component has always been a separate issue when it comes to referencing, as there are various factors a hirer needs to know in order to make the right recruitment decision. Trusting that someone is a good person, a hard worker, and punctual is one thing, but then physical certification that they have the skills and experience to what they can do is another. Blockchain will break down communication, trust, and certification so that a hirer will easily be able to make accurately informed selections on their next hires. Currently, the recruitment industry is valued at $638B globally, according to June 2017’s IBIS report. Permanent-based recruitment services are worth about 15% of that (at $90B annual revenue. As blockchain becomes more commonplace and replaces our current recruitment systems, we can expect to see industry revenue growth diminish. Blockchain will dramatically reduce the need for third-parties to manage the hiring process as candidates and clients will be able to interact directly and securely. It will be easier for employers to find certifiably qualified candidates who can do the jobs they need, in turn reducing turnover and personnel costs. Small to medium- sized enterprises will find it more accessible and affordable to hire qualified staff, breaking down barriers to growth and innovation. It’s certainly a bittersweet development for those in the recruitment industry. Companies beholden to the old methods and processes will need to change their platforms completely or be lost in the blockchain revolution. Lucrative recruitment agencies and recruiters alike may see declining returns if they don’t put investment in technology at the very top of their to-do lists. In tomorrow’s blockchain economy, remaining dynamic and knowledgeable are the major ways to grow your business, otherwise, you’ll unfortunately find yourself dead in the water.