Siddharth is an HCM digital solutions expert & VP at JP Morgan Chase. He has years of progressive experience in HR enterprise applications.
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Background checks are an essential component of the hiring process, as they allow companies to confirm the qualifications of potential employees and reduce the risks of employing deceitful or unqualified individuals.
Recently, blockchain technology has surfaced as a promising alternative to conventional background checks. While traditional background check methods can be slow, costly and susceptible to inaccuracies, blockchain technology can serve as a decentralized and protected data storage and exchange platform.
What Is Blockchain-Based Background Verification Technology?
Blockchain technology tracks data across a network of computers. It operates like a virtual record book, adding information blocks chronologically and unalterably, forming a chain. In HR, blockchain can streamline background verification by storing, managing and sharing candidates' credentials and work history, enabling a more efficient and accurate qualification check.
With over a decade of experience in HRIS applications, I specialize in leveraging technology to streamline, standardize and simplify business processes. I believe this technology may significantly impact an organization's ability to find, screen and onboard candidates in several ways:
• Streamlined screening process: Organizations can access verified data faster, reducing the time spent on manual verification and associated delays. This streamlines the candidate selection process and allows HR professionals to focus on evaluating other aspects of a candidate's profile.
• Enhanced trust and transparency: Blockchain technology is designed to be tamper-proof and transparent, providing increased trust in the data. This can enhance the confidence of both the organization and the candidate, making the screening process smoother and more effective.
• Improved data accuracy and reliability: The decentralized nature of blockchain ensures data is stored across multiple nodes, reducing the risk of errors and data manipulation. This leads to more accurate and reliable background verification results, enabling organizations to make better-informed hiring decisions.
• Faster onboarding: This can speed up the onboarding process by reducing the time it takes to gather, verify and analyze candidate information. This enables organizations to fill open positions more quickly, improving overall productivity and reducing costs associated with unfilled vacancies.
• Expanded talent pool: Blockchain-based system can simplify the process of screening candidates from different locations, making it easier for organizations to tap into a more extensive talent pool and find candidates with the right skills and experience.
How Would Different People Experience This?
In a blockchain-based background verification system, various people interact with the platform to fulfill their needs. Here are some of the key people and their experiences with the system:
• Job applicant: Job applicants would use the system to store and manage their educational, certification and employment records. They could grant or revoke access to their data, enabling them to control who can view and verify their credentials. As a result, they would no longer need to provide physical documents or go through lengthy, manual verification processes.
• Employer: Employers would use the system to verify the credentials of job applicants. They could request access to an applicant's data, and once granted, they could view and verify the applicant's background information directly from the source (e.g., educational institutions). Because of this, employers could make informed hiring decisions, minimizing the risk of hiring unqualified or fraudulent candidates, and reduce the time and cost associated with traditional verification methods.
• Educational institution: Educational institutions act as credential issuers, providing verified records of an individual's educational qualifications. They could use the system to securely store, update and revoke digital certificates, making it easy for employers to verify an applicant's educational background. The system would reduce administrative overhead and the risk of fraud. As a result, it might enhance the institution's reputation by providing a reliable and efficient means of verifying educational qualifications.
• Certification body: Similar to educational institutions, certification bodies can use the system to ensure the authenticity and validity of certifications, making it easy to verify an applicant's skills and achievements.
• Background verification agency: As the traditional role of a background verification agency becomes less relevant in a blockchain-based system, these agencies can adopt new functions, such as assisting job applicants with onboarding and managing their data on the platform or serving as trusted third-party validators for certain types of credentials.
The Risks And Challenges
As with any new technology, there are potential risks and challenges to take into account. It's important to consider the following:
• Adoption and standardization across industries: For this system to be effective, widespread adoption and standardization across organizations, educational institutions and government agencies is necessary. Achieving consensus and collaboration among these various stakeholders is challenging.
• Cost implications: Implementation and maintenance can be costly, particularly for smaller organizations. The costs of developing the system, integrating it with existing processes and performing ongoing maintenance must be considered.
• Data accuracy and quality: The reliability of a system depends on the accuracy of the data entered. If inaccurate or incomplete information is added to the blockchain, it can be difficult to correct or update, given the immutability of blockchain records.
• Security risks: While blockchain is generally considered secure, security breaches or vulnerabilities are still risks. Organizations need to be vigilant in maintaining the security of their systems to prevent unauthorized access or tampering with data.
• User acceptance and trust: As with any new technology, user acceptance and trust are crucial for successful implementation and adoption. Organizations must invest in user education and support to ensure that stakeholders understand the benefits and potential risks of the new system.
Looking Forward
Blockchain technology can offer a promising solution for modernizing the background verification process in recruitment. By streamlining and enhancing the experiences of job applicants, employers, educational institutions, certification bodies and background verification agencies, it can improve operational efficiency, trust and data accuracy.
While there are risks and challenges associated with adoption, standardization, cost, data quality, security and user acceptance, with continued research and collaboration among industry stakeholders, these challenges can be overcome. It could pave the way for a more efficient and trustworthy recruitment process, ultimately benefiting organizations and candidates alike.
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