Blockchain technology has gained a lot of traction in recent years. Now it’s being used to create social networks, including Sapien, Steemit, Sola, Dock, Indorse, and others. As with most new platforms, the hype is starting to get deafening, with claims of the reinvention of social media, and high-minded promises like “championing users and truth, not financial gain,” and “returning power to the content creators.” Social networks have had a major impact on recruiting, so it’s only a matter of time before the hype starts to permeate the recruiting world. But those expecting these to disrupt or transform recruiting are likely to be disappointed.
The value of using blockchains is primarily security, but a blockchain-enabled social network needs to offer more than just security. Indorse is an example of how the technology can improve on current social networks. This is a LinkedIn-like platform where member profiles include validated skills. Members post their profiles and have their skills judged anonymously by other users with the consensus view being accepted.
A common theme across many of these new networks is providing rewards to members for creating and promoting content. The rewards are all in a cryptocurrency, usually specific to the network. Ong is one such network with an added benefit. It allows a user to have some control over the content on all their other social networks. Blockchains make the content censor-resistant and trackable across multiple networks.
These are improvements over existing social networks but they’re incremental improvements, not game changers. Being able to track content has some value, especially if one is trying to monetize it, but that does not prevent it from being misappropriated. Having validated skills is better than the endorsement clubs and mutual admiration societies that exist on other platforms, but it mainly works when hard skills like coding or design are being rated. It’s difficult to get consensus on a person’s soft skills, which are defined by traits and behaviors. Skills also have a short life based on how often and recently they have been used, so a consensus endorsement may have little relevance a few years after being made.
Evolutionary, not Revolutionary
The appeal of blockchains for recruiting is limited to what problems are being solved by using them. A company may have something to gain by having a transparent supply-chain for customers to view, ensuring that components of products are easily tracked and monitored, but what is the comparable value for recruiting? Blockchains do not fundamentally alter how recruiting gets done. Disruption in recruiting occurred with the development of job boards and the use of social networks for sourcing. It’s now happening with AI. It did not happen with AR and VR.
Having secure records of education and certifications can help reduce the time it takes to make a hire, but only marginally. Using a smart contract to pay contingent workers while eliminating a middleman reduces costs, but again only marginally. Security and immutability of information is also somewhat illusory. The basic design of a blockchain, where the database is distributed across many servers and all must agree to a change, makes it difficult for hackers to access it and make changes. But it is by no means impossible to do so. Bitcoin and Ethereum, supposedly the most secure blockchain networks, have both been hacked and both have had to correct for errors caused by software glitches.
What could significantly increase the efficiency of recruiting processes is having a unified standard for blockchains. That would allow social networks, ATS, job boards, recruitment marketing platforms, and assessments to plug into each other, creating a single, mostly secure, record of transactions and candidate information. But developing such a standard might be challenging. Allowing someone to become the Lord of the rings, effectively having the one ring to rule them all, may be more than the supporters of a technology associated with such libertarian values can stomach.
Things can change rapidly in the digital economy, but blockchain enabled networks are unlikely to displace the dominance of Facebook and LinkedIn. Facebook continues to thrive. Its recent earnings report showed soaring revenues and profit, and the network added 70 million users in the last quarter, showing that neither advertisers or members shared the privacy concerns raised by some.