Blockchain: The next HR frontier?
Blockchain technology is typically associated with cryptocurrencies. But to Tashina Charagi, a vice president in ADP’s corporate strategy group, that’s only the beginning. She leads ADP’s efforts to identify practical ways blockchain can help employers and workers find each other faster and work — and get paid — more efficiently. Employee Benefit News recently explored these topics with her; edited excerpts of that conversation follow.
EBN: You have been exploring the opportunity for using blockchain technology in the hiring process. Where does that stand?
Charagi: For ADP specifically, it’s a concept at this point. There are startups out there looking at contractual hires and day workers, and paying them with cryptocurrencies. And some of those already have recruiting through blockchain-based technology.
EBN: Why would an employer want to pay contract workers with cryptocurrency, or why would workers want to be paid that way?
Charagi: Personally, and from an ADP perspective, I’m not endorsing the idea, but it feels that there is a market out there for contract employees who are looking to be paid in cryptocurrency. They might want to be paid that way due to cross-border issues, or perhaps just as a way to invest in a particular cryptocurrency, something to diversify their portfolio.
EBN: So do you think this will accelerate, and if it does, based more on what the people who are getting paid want versus their employers?
Charagi: Quite possibly. This ties into our philosophy of being “paid your way.” We are “person-centric” — building solutions to meet the needs of individuals. So we look at human capital management at the worker level. We’re even trying to avoid the distinguishing statements associated with employee versus contingent worker. We’re starting to see a trend in employers that they are finding creative ways to pay people so that they can be happy in their job.
EBN: Can you name any companies that do this?
Charagi: Yes, there’s one called Ethlance that specifically does payment in cryptocurrency for temporary workers or contract hires. It’s certainly not a mature market. And we have spoken with clients who just want to further understand the world of cryptocurrency, although their employees aren’t currently interested in getting paid that way.
EBN: Employers who understand it won’t necessarily conclude that it’s a good idea, regardless of what their workers seem to want, right?
Charagi: Exactly. But we never want to have to say no to a client who’s interested in doing this. But honestly we would advise our clients that it would be very difficult to do today, and stay within the regulatory bounds. But things could change in the future, and we want to be able to support them then.
EBN: Are any regulatory bodies looking at this issue now?
Charagi: I know specific states are looking into how they want to handle cryptocurrency, and there has been conversation with the IRS about it, too. We’ve had conversations with government agencies about potential users of blockchain, but it hasn’t gone to the point where we understand what the regulatory environment might look like.
EBN: OK, let’s move on to using blockchain for job candidate credential verification. As I understand it, professional and academic credential information about people would be embedded in a blockchain, and prospective employers could access without needing to check its authenticity. How far out on the horizon is that?
Charagi: For credentialing, universities would be the starting point. Then it could move to other credentialing institutions like PMI — the Project Management Institute, or even things such as commercial driving licenses, or Six Sigma, all of these sorts of tests which are pretty standardized and have easy ways of being checked and regulated.
EBN: And then?
Charagi: From there, it could reach the point where whatever we put on our LinkedIn profiles about our professional experience could be used this way. If I can get my employer to certify I have met certain standards, or successfully completed a course online, the learning management system automatically records that on a blockchain or on a ledger, and I have the ability to then make that public or share it on a public blockchain.
EBN: Are there any big impediments to making this a reality?
Charagi: One impediment is getting to standards. So, for example, there are certain institutions that have their own type of certification out there. It’s on the blockchain; it’s public. Utopia would be everybody has agreed to standards so that it can perhaps get shared on the same larger public chain instead of having to go and check the chains or check at each institution. But with new technology it usually takes a while to get everybody on board. For example, cloud platforms have been out there for 20 years, and a lot of people are still just talking about it.
EBN: Where will the demand come from to push this forward?
Charagi: Probably large employers who employ workers who have standardized qualifications. For example, companies that employ large numbers of truck drivers, or other kind of specific skills, where you’re required by law to check for certification before you can employ a person. I’ve seen surveys that found that something like 70% of credentials that were submitted by job applicants had some errors or false information in them.
EBN: It sounds a little bit Orwellian. Would people still be able to decide what about themselves enter the blockchain?
Charagi: Yes. I think that’s more true of a blockchain-based system than the present state. The aim would be for the individual to have control as to what parts of their profile or credentials can be seen. They should be able to put filters on who can see them. And ultimately this should allow employers to broaden their talent searches.
EBN: How so?
Charagi: Instead of having to search, for example, by a university, because you know that the credentials from that university can be easily verified, you can search for specific roles or the type of jobs that a person has done, or the type of training that person has had, which can be shared on blockchain in a standardized way. It might not be shared on LinkedIn in a standardized way.
EBN: I assume we’re not just talking about finding talent in the U.S.?
Charagi: That’s right, the chain is not controlled by a U.S. entity. It can be put together by a consortium that can be global.
EBN: Would employers or recruiters have more flexibility in how they conduct their searches in a blockchain environment?
Charagi: Yes. Right now you can pay LinkedIn and then LinkedIn provides some tools that you can do a search on. However, in the blockchain world, with the ability to understand what the data is in the blockchain, I could make my own tools to search through the chain to find the right kind of employees for me. So it can be a lot more customized.
EBN: When employers are looking for talent, typically there are a lot more criteria than degrees, credentials and evidence of training that goes into the mix, particularly for non-technical jobs. How would that be addressed in a blockchain-based recruitment environment?
Charagi: Instead of just establishing your credentials, I would also think of it as an ability to prove how good you are and what you have done. It would be similar to getting recommendations on LinkedIn or putting all of your prior work on LinkedIn. Being able to show that on blockchain would be easier.
EBN: Will blockchain-based recruitment and payment systems be an enabler of the increasing use of gig workers?
Charagi: Well, it can help gig workers get work. When you’re a gig worker, you have to prove your credentials and capabilities over and over, if you’re going from job to job. It’s not easy to advertise yourself. Employers have to find you. A blockchain will make it easier for those people to be found. It will also make it easier for organizations to find them — and know what they need to know about them without a lot of checking.