Excited about the potential of blockchain recruiting? You should be. But now let’s get down to brass tacks and harsh truths.

Blockchain—the decentralized ledger technology behind Bitcoin and other cryptocurrencies—is positioned to flip the recruiting industry on its head.

For the uninitiated, blockchain technology promises a new reality where companies can confirm the authenticity of a job applicant’s credentials without having to contact former employers or pay for background checks.

Candidate information stored on a blockchain is both verified by the peer-to-peer network and immune to tampering—a game-changer in a world where up to 85 percent of job applicant resumes contain false information.

In other words, blockchain recruiting promises a lot. The question now is: When will it deliver?

Not anytime soon, if Gartner research is any indication. According to “Predicts 2018: Top Predictions in Blockchain Business” (available to Gartner clients), only 10 percent of enterprise businesses will achieve radical transformation with the use of blockchain technologies through 2022.

In fact, blockchain recruiting will not become a small and midsize business tool until at least 2025, due to factors such as limited resources and a lag in technology awareness compared to their larger brethren.

These predictions aren’t meant to rain on the blockchain parade, and they’re not meant to dissuade you from acting. On the contrary, recruiters that stand idly by and wait for this disruptive technology to reach their doorstep will not be ready to adopt when it’s time.

Here are three key obstacles recruiters should pay attention to before implementing blockchain recruiting in their business, along with tips on how to prepare today for this disruptive technology.

Obstacle #1: Government Entities and Academic Institutions Are Lagging

Think of each ‘link’ in a person’s blockchain-powered job application as a single event in that person’s career. When a person gets a promotion, it’s verified by their employer and added to their blockchain. Performance review? Add it to their blockchain.

That’s the beauty of this technology for recruiters: It’s a single source for verified candidate information. The problem is that there are significant chunks of important candidate information that don’t come from employers.

Take a candidate’s college degree(s) for example. Forward-thinkers like Australian University and MIT are currently experimenting with offering graduates digital diplomas powered by blockchain, but it will be a while before the rest of academia catches up:

Then there’s the government. From criminal records to social security numbers, recruiters still rely on government entities for background checks.

And, while the current administration is beginning to consider blockchain in the wake of the Equifax data leak, there are still more than a few regulatory roadblocks, between getting legislation passed and figuring out how to transfer old paper records, before identifiers such as birth certificates start going digital. Sadly, the United States isn’t as agile or forward-thinking as countries such as Estonia, which started adopting blockchain-powered ID cards for its citizens in 2002.

All that to say, it won’t matter how quickly the private sector jumps on the blockchain recruiting bandwagon if other important players in the hiring process lag behind. Until you can get the whole picture of a candidate through blockchain, you should wait to embrace this technology.

Obstacle #2: Legal and Security Concerns Still Exist

In theory, blockchain is an impenetrable record of data. Not only are all transactions on blockchain immutable and irreversible, but to be recorded in the first place, every computing device (or node) on a specific blockchain must agree to the transaction. Short of a nigh-impossible ’51 percent attack’ (where one party controls a majority of the nodes on a specific blockchain), any job candidate information on blockchain is hack-proof.

In practice, however, a number of costly incidents have proven that blockchain isn’t foolproof yet:

• In July 2017, a hacker exploited a flaw in the Ethereum blockchain network and made off with $31 million.
• In January 2018, the largest crypto hack in history on the Japanese cryptocurrency exchange, Coincheck, resulted in a loss of $534 million.
• That nigh-impossible 51 percent attack? It already happened.

Compounding these security concerns are legal ones. What if candidate data logged on a blockchain is incorrect or infringes on someone’s rights? The irreversible nature of blockchain means courts can’t just go in and change the record. Giving legal bodies a skeleton key would also negate one of the key benefits of blockchain: decentralization.

Questions over who has jurisdiction in international transactions are also largely unanswered. If a network in Spain approves a blockchain transaction in the U.S., is it subject to GDPR, the new E.U. data privacy law? Most experts agree blockchain technology and the new law are at odds.

With highly sensitive applicant data on the line, these issues should be addressed before you consider switching recruiting processes over to blockchain.

Obstacle #3: Blockchain Technology Is Expensive

One of the primary reasons businesses are excited about blockchain is the possibility of greatly reducing or even eliminating transaction costs. That’s the main sell for how blockchain recruiting will achieve a positive ROI in the long run: Instead of paying $20 to $30 per candidate for a third-party background check provider, recruiters pay a fraction of that amount to gain access to a candidate’s data themselves.

In order for the numbers with blockchain recruiting to work out positively though, initial costs need to come down. It doesn’t matter if it’s an application purchased through an outside vendor or a proprietary tool built in-house. Simply put, SMBs don’t have the budget for blockchain implementations in their current state, when you consider these three sources of high cost:

3 High Costs Associated With Blockchain Applications

• Finding blockchain talent. Blockchain application developers are rare and expensive, demanding at least $150,000 a year.
• Powering blockchain transactions. Blockchain transactions require a ton of computational power to take place. Cryptocurrency miners currently face high costs largely because of this need.
• Storing blockchain data. Remember, blockchain transactions don’t disappear. As more and more candidate data is added onto a blockchain—even one with a ton of nodes that share the burden of storage—costs will soar.

As a result, 80 percent of blockchain applications done at the enterprise level through 2020 in an attempt to save money will fail to do so, according to Gartner’s Predicts 2018. In order for blockchain recruiting to become feasible for everyone, costs related to the creation and maintenance of these platforms need to fall dramatically.

How You Can Prepare for Blockchain Recruiting Today

Yes, it’ll be a while before blockchain recruiting becomes a tangible reality for your average business. That being said, here are steps you can take right now to prepare for blockchain recruiting:

• Learn more about what blockchain is, and what it isn’t. When companies can simply add the word “blockchain” to their name and see their stock price skyrocket, it’s safe to say there will be more than a handful of software vendors that claim to leverage the technology, but really don’t. Seek out resources and learn more about blockchain to avoid being duped: Gartner is a great source on this topic; so is MIT Technology Review.
• Find alternative solutions in the interim. Here’s an interesting stat: According to Gartner’s “Blockchain Primer for 2018” (available to Gartner clients), 85 percent of projects this year that have “blockchain” in their title will deliver business value without actually using a blockchain. These projects jump-started by the desire to implement blockchain will ultimately arrive at alternative solutions. Instead of waiting around for blockchain to come to fruition, consider a different approach to improve recruiting processes (e.g., switching background check providers).
• Talk to software vendors about their plans for blockchain. Talk with your recruiting software vendor to learn about their plans for blockchain implementations or partnering with other blockchain applications. Oh, and if you don’t have recruiting software, fix that. It’ll improve your organization today and suitably prepare it for the tech of tomorrow.

Want to learn more about how software and technology can improve recruiting processes and hiring outcomes? Check out more helpful articles on Software Advice.

According to tech guru Nick Macario, what’s powering Bitcoin-mania may soon disrupt Recruiting, by toppling Facebook and LinkedIn and returning ownership to individuals.

On February 5, 1637, the children of Dutch tavern-keeper, Wouter Bartelmiesz, gathered their late father’s possessions for a large auction in the town of Alkmaar. Among items up for bid was a small botanical collection that drew both the humble townsfolk and wealthy elite into the auction house. For many, the public event was pure spectacle. For the crafty, there were particular items promising outlandish, unprecedented wealth: tulip bulbs.

Newly introduced from Turkey to the Netherlands in the late 1500s, tulips became the day’s hottest industry. A poet at the time wrote of the Dutch tulip trade, “He who considers the profits that some make every year from their tulips will believe that there is no better Alchemy than this agriculture.”

Highly valued for their novel rarity, tulip bulbs were in high demand, encouraging many nascent investors to liquidate their assets and get on board with the lucrative but risky venture. Tulip prices swelled when certain specimens mutated, following an outbreak of the non-fatal mosaic virus that left irregular color patterns on petals. Garden centers around the lowlands scrambled to keep these rare flowers in stock, and between December 1636 and January 1637, their price increased twenty-fold. Speculation as to how much higher prices could go was rife. Tulips became a futures market.

At the Alkmaar auction, one buyer paid 21,000 guilders for a single lot. Enough to buy two large houses on Amsterdam’s swishiest waterway, the Keizersgracht, or Emperor’s Canal (where today, one floor of one of those canal houses easily goes for a million euros). In the span of a few hours, Wouter Bartelmiesz’s children went from poor orphans to exceptionally wealthy thanks to their late father’s collections, and just in time, too, as the tulip supply, racing to meet demand, soon began to outpace it.

A matter of weeks after the auction, determined sellers were flooding the market, creating a domino effect of lower and lower prices that sent many remorseful buyers into a panic, and any remaining prospectors running for the dunes. In a pattern that has played out several times since, with few takers and an oversaturated supply, the market imploded. So badly that the federal government was forced to intervene, mediate, and settle disputes.

“Tulip mania” is generally considered to be the first speculative bubble in modern Western history. Today, many consider investing in Bitcoin to be the latest.

The current controversy around the world’s most well-known cryptocurrency shares “many of the elements of tulip-bulb mania,” said Citadel CEO Ken Griffin, remarking on the record price of nearly $20,000 a coin in late 2017. Value dropped dramatically between December 2017 and February 2018, and despite a slight increase in March of this year, current price trackers illustrate a diminishing trend.

“All the speculation between cryptocurrency prices cause people to ultimately question how there’s no physical object backing the value,” says Nick Macario, co-founder of dock.io and CEO of Remote.com.

While the risks of investing in commodities like gold and silver — to say nothing of tulip bulbs — are well known, Macario identifies an important distinction: “People accepted gold as the currency standard because it’s a physical object. They feel there’s an explanation for why gold can have a value. However, that worth is disconnected from its utility as gold.”

To adrenaline-jacked trader types, it doesn’t matter. To the skeptical or the parsimonious, unseasoned newcomers are investing in technology few can even explain. At least with tulips, everyone agreed that they were beautiful flowers worthy of admiration. What Bitcoin is, the nuts and bolts that make it work, are almost too abstract to explain fully here. So we won’t. Not just yet.

That’s where futurists like Macario come in. A serial founder who’s launched four companies and honorably exited two, he’s here to demystify the technology powering Bitcoin-mania, the bulb of the thing, if you will. It’s called blockchain, and “it’s sometimes referred to as a pyramid scheme,” says Macario. “There’s a lot of mistrust because many people don’t, fundamentally, understand it. Blockchain technology is not only for cryptocurrency, although that’s the most widely used application for it.”

Macario is using blockchain to power his most recent venture, dock.io, launched this year, which connects millions of job seekers on a decentralized network, one he says will rival Facebook and LinkedIn, only without limitations to user-data mobility.

The way things work now, professionals build extensive profiles, reputations, and experiences on closed business and social networking platforms like Facebook, Reddit, LinkedIn, even Twitter. But what happens when you decide to shift your personal information onto another network? It can’t be done.

Macario insists blockchain holds huge potential beyond cryptocurrency or freeing your data from Facebook. Macario insists, perhaps unexpectedly, that blockchain is about to disrupt the recruitment industry.

Imagine: when you update your profile with a new job title, it automatically syncs and updates everywhere at once, across all platforms, saving you time and optimizing your online processes. dock.io also expedites recruiters’ manual tasks like conducting background checks. For candidates, deciding which applications can access your data is as simple as toggling notifications on or off.

“We’re empowering the user tremendously,” says Macario. “We’re going to build the largest, most complete resource of data about an individual in existence.”

Given the current climate of massive data leaks and growing concerns over the sale of browsing histories to advertisers, Macario’s claims of freely sharing profiles across the net may sound undesirable, but the ledger records on the blockchain are both continually updated across the peer-to-peer network, and protected by a layer of cryptography distributed across many points, or “nodes”. Any unauthorized changes would require massive amounts of computing power to access the controlling majority (at least 51%) of nodes, and modify them simultaneously. The bigger the network, the more difficult this becomes.

Though the dock.io network may still be in its infancy, it’s scaling rapidly and gaining buzz. This February, dock.io completed its Initial Coin Offering (ICO) — the cryptoquivalent of an IPO — raking in over $20m via DOCK token sales. These tokens decide how data is accessed and shared across the dock.io protocol. Transactions of data exchange between applications and users on dock.io incur a token cost. This token exchange also works to ensure the quality of data, as applications are only rewarded tokens when other applications validate the same data on their networks. DOCK tokensalso grant the holder influential votes over the future direction of the protocol as dock.io scales up in the coming months, much like a shareholder in a traditional company structure.

“We could create a powerful network that helps applicant tracking systems and other CRM systems,” says Macario, “because they have more enriched data to build more and better features, recruit better, and make better decisions.”

*****

Like other blockchain acolytes, Macario’s exhortations bear the burden of public proof. But Macario knows that even when broken down into its most basic elements, blockchain theory is about as punchy as reading a Samsung TV instruction manual. In Korean. But this is tech that may change your life sooner than you think, so let’s try.

A blockchain is an encrypted digital ledger of records, organized into blocks. These blocks are located on servers called nodes, with any nodal computer connected to the network and linked to others, like a chain. Each node maintains a copy of said ledger and informs other nodes of newly submitted or newly verified transactions, allowing information to be distributed securely across an entire network without the need for a central administrator. This is possible because blockchain transactions contain their own proof of validity and authorization, instead of requiring a centralized application.

Blockchain’s distributed database syncs data along all nodes in the chain and protects them with advanced cryptography, meaning that all data on the chain is transparent and immutable. By nature of its decentralized network, the blockchain is extremely difficult to hack, and global enterprises including Walmart, FedEx, UPS, British Airways, and Dutch transport company Maersk, use blockchain to track supply chains, streamline and secure international shipping, solve customer disputes, and standardize global trade and finance.

Even non-profits, fashion gurus, and musicians are integrating blockchain into their business practices. Great for Macario and his cause, likely awesome for recruiting; not so good for anyone waiting for the next Kanye single to leak.

For job seekers, blockchain’s value is clear. They own their data and can share it wherever and with whomever they please, on a secure, verifiable, and decentralized network. After the hiring process, blockchain can protect employee data from falsification and unauthorized changes, since the data can only be modified with the approval of all links in the chain.

“Instead of controlling user data,” Macario suggests, “companies will realize that their model is creating a better network and a better offering. People can freely decide to use their platform, not because they are trapped there.“ Though Macario assures his end goal is to work with large platforms, he confidently claims, “We don’t need Facebook or LinkedIn to grow a huge network.”

Through direct signups, the dock.io network grows by 100k new users each month. Not much compared to Facebook’s 2.2 billion or LinkedIn’s 500 million last quarter, but “where we start to scale is through partnerships with companies like SmartRecruiters,” says Macario. “There are 12 million job seekers a year who are not yet in the dock.io network. When we start integrating them, and then plug into hundreds of other networks, we can scale to build a bigger network than LinkedIn, and do it without LinkedIn.”

Though the balance of internet power could fluctuate in the wake of upcoming data privacy legislation, both in the US and abroad, until data control returns to the hands of individuals, Macario won’t be happy, and we won’t necessarily be safe. But dock.io looks to be instrumental in moving the needle towards empowering individuals world-web-wide and debasing the systems of power that give companies like Facebook enough control to keep a scandal like Cambridge Analytica out of the press for so long.

So as long Bitcoin and others like it remain more an abstraction than something to pay for your groceries with, the cryptocurrency market will remain unstable. But instead of fixating on the tulip-bulb nature of the technology’s fluctuating stock, Macario seeks to understand how the not-so-abstract value of blockchain can herald something as stable as the second-coming of the gold standard.

“It’s just a matter of who’s controlling the data,” he says. “I think eventually it’s going to be the user, and I hope we can do that in the short term. Data will always be the most valuable resource.”

Catch your breath after the marathon of Hiring Success 18, and relive some key moments from three days of TA inspiration… with more to come!

One thousand TA leaders from across the globe joined us in San Francisco for the third annual Hiring Success conference, and left with enough learnings to last the year until Hiring Success 19.

Here, we look back on some of our more special moments, where the intersection of passion and innovation was truly palpable, and of course, some that were just plain fun.

Analyst Day:

Top TA analysts kicked off Hire18 with a meeting of minds…

… and received advanced insight into new SmartRecruiters features. 

VIP Party:

Hire18 VIPs relaxed after Analyst Day at San Francisco’s hippest social club, The Battery, with food, drinks, and those famous SF rooftop views…

…and a heartfelt toast from Stephane Kasriel, the CEO of Upwork – pictured below with our CEO and founder Jerome Ternynck.

Keynote:

For the official opening of the conference, Jerome Ternynck roused the audience with a passionate unpacking of ‘Hiring Success’.

The Big Reveal – AI Recruiting Assistant:

One of many newsworthy announcements, SmartRecruiters launched our AI Recruiting Assistant, the only completely native AI on the market, that allows businesses to leverage the power of artificial intelligence to streamline recruiting processes, remove bias, and usher millions of candidates into their perfect job fit.

Predicting Quality of Hire:

Lou Adler, head of The Adler Group, revealed his methods, key features of his legendary methodology, including the one interview question that predicts ‘Quality of Hire’.

Texting Etiquette:

President of RecruitingDaily, William Tincup, managed to convince the audience to implement this traditionally personal platform into their recruiting practice, while simultaneously shocking attendees with ‘stranger than fiction’ examples of how terribly wrong it can go.

Hearing Accessibility:

All session attendees left the room with far more knowledge than they had going in, and in this particularly unique talk,  learned the challenges of deaf and hearing impaired workers, experiencing the latest technology that not only makes work more accessible to those in need, but makes everyone’s work-flow better.

The Blockchain Question:  

Serial founder and dock.io CEO Nick Macario spoke, alongside self-proclaimed futurist Kevin Wheeler, about the potential for blockchain to radically shape the future of HR. The goal: break candidate data out of closed platforms, create a decentralized and connected network, and return information control to individuals.

SmartyParty:

Hire18 took to the high seas for a dance party on the decks of the Hornblower…

… And of course a brief pitstop at the Smarty photobooth.

Standout Applicant:

We heard from applicants whose jobseeking processes were unique and tenacious.

Digital Marketing candidate Nina Mufleh talked about how she made her case to Airbnb by publishing a website that went viral: nina4airbnb.com

Shelley Winner was sent to prison for selling drugs. When she discovered she was pregnant, she turned her life around. She shared her candidate journey that led from a prison cell to the executive suite at Microsoft.

Robert Coombs wasn’t unsuccessful in PR, per se, but when he applied to corporate jobs, he got no love back. So he built a bot that applied to 3000 companies on his behalf, which effectively flipped the recruiting process!

Adidas, the story behind the Brand:

No one in the room was unfamiliar with the brand, but the company’s mechanics were new to most. And in many ways, the sports giant’s recruiting function is already operating in the future.

Recruiting Startup of the Year:

Honeypot swept the gold for Recruiting Startup of The Year with their developer-focused job platform that delivers qualified candidates to employers, and customizes and sends relevant offers to job seekers.

 Hackathon:

Four teams coded well into the night after the first day of Hire18 to deliver thoughtful customizations on the SmartRecruiters API. Visa took home the prize of $5k for an internal mobility add-on, which made it easier to find candidates from within an organization.