How blockchain can help HR reduce recruitment costs and transform the hiring process
For many organisations, the recruitment, onboarding and managing of new talent is a fundamental yet painfully inefficient, and costly, paper-based manual process. The key challenge for HR recruiters is still ensuring potential candidates are who they say they are (Authentication) and have verifiable qualifications (Authorisation). Both these aspects of credentials are key ingredients of building trust and confidence in the hire.
Where organisations do these checks – and some 51% of hiring managers admit they don’t – it can take weeks chasing emails, letters and phone calls to universities, colleges and previous employers.
Not only is the process full of inefficiencies but it also poses a serious trust issue. How much faith can organisations put in the qualifications and credentials that applicants claim to hold?
The consequences of getting it wrong should send a shudder up any HR manager’s spine. In one survey of more than 2,000 HR managers in the US, nearly three quarters admitted to hiring the wrong person for a job. Citing the reasons for those poor decisions, HR managers said in 45% of cases the worker’s skills didn’t match those they claimed to have, while 33% of applicants lied about their qualifications.
Other experts, such as Freakonomics author Steven D Levitt, claim more than half of job applicants lie on their CVs.
Those hiring mistakes can come at a huge cost for organisations. The primary assets for any organisation is its workforce, and people costs can amount to upto 70% of an organisational cost. In addition to the onboarding costs, a bad hire can cost a company almost a third of the employee’s first-year earnings. Zappos CEO Tony Hsieh even put the cost of bad hires to his company at a staggering $100 million. And that’s before you even start trying to calculate the effect on productivity and morale of other workers, or the potential brand and reputational damage a bad hire could cause. This could be either through a malicious act or by making a mistake because they don’t have the skillset that they claimed to have.
That’s why PwC has developed Smart Credentials,an offering that enables credentials to be issued, carried and shared globally, using a blockchain platform, instead of having to rely on paper-based versions.
Stored in secure digital wallets, individual qualifications and professional certifications can be locked in by their issuing bodies, giving employers and regulators confidence that workers’ credentials are accurate and up to date, as well as speeding up the vetting process for new recruits.
Smart Credentials is based on three key stakeholders and works as follows:
- Issuer: An institute or regulatory body that creates verified credentials
- Owner: An individual who has the ability to share and revoke their credentials with other parties
- Reviewer: An organisation that needs to view credentials and validate their authenticity
PwC’s Smart Credentials offering is currently being piloted by some of our own staff who have qualified with the Institute of Chartered Accountants of Scotland (ICAS) in the last two years. Smart Credentials has a cross industry applicability and at present covers all aspects of issuing or reissuing credentials or records of achievements in permanence leveraging Blockchain as a Trusted technology.
In this ICAS pilot, the owner is the recently qualified chartered accountant at PwC. ICAS issues the digital certificate to that person. That digital certificate then becomes part of the person’s digital wallet; it can be updated and verified with ongoing professional development, and can be shared with others on request in a safe and secure way. The platform also enables ICAS to revoke a certificate more easily, which can be difficult with paper-based ones where people can still display and show a certificate to recruiters even if it’s no longer valid.
The Smart Credentials platform is also easy to deploy and use. In this trial, ICAS is exposed to a user interface through a portal that allows the organisation to issue certificates. Employees simply access it through a portal and mobile app. Blockchain is just the back-end technology under the hood, providing the permanence and auditability trail. This is important because ease of use is paramount if this technology is to gain more traction.
Beyond HR and recruitment, there are also many other opportunities for organisations to exploit this technology in education, aviation and healthcare.
Get in touch to find out more about how PwC’s Smart Credentials blockchain platform could help your organisation.
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