How blockchain amplifies the ‘trust’ element in background screening

A decade ago, if someone had told us about immutable digital ledger technology, we would have met the thought with skepticism. Today, it is real and is believed to be one of the most promising technologies that several industries can piggyback on! The future of blockchain is here and now. The disruptive potential of blockchain-based solutions is impressive – and there are increasing applications of blockchain technology across HR in general, particularly in background screening.

Think trust, think blockchain.

Blockchain has become synonymous with ‘trust’ in undertaking digital transactions. As global background screening is becoming digitalised, blockchain is seen to be taking center stage. International Investment claims that globally, fraud is costing an estimated £3.24tn each year, a sum equal to the combined GDP of the UK and Italy. 85% of the 4,000 survey respondents said they uncovered a lie or misrepresentation on a candidate’s resume or job application during the screening process – according to an article published by SHRM. Applying blockchain in background verification not only ensures the reliability of the candidate information verified but also provides a secure exchange of data.

The background check process is infested with constraints around candidate data screening and enormous volumes of data it can effectively verify. Applications of blockchain which could have a direct and immediate bearing on background verification include:

1. Permission to check initiation

Employers traditionally have access to huge volumes of employees’ personal, privileged, and private information – including performance history and health-related information. The background screening process initiation undertaking that an employee today permits is in most cases out of ignorance, with the employee unclear what information about him/her is going to be accessed by the potential employer and how.

2. Online identity of candidates

Online identity management is plagued with issues around the source of truth – which identity to trust and how to verify. Blockchain’s immutability can help here.

3. Academic credentials verification

According to FBI agents Allen Ezell and John Bear, the ‘degree mills’ producing fake diplomas constitute a billion-dollar industry that has sold over a million fake diplomas in the US region.

4. Employment and performance records

Employment checks are often restricted to basic employment data checks that include a limited set of information including the candidate’s joining date, exit date, and the title last held by the candidate at the time of leaving. Most of the checks ignore the candidate’s performance records, skill endorsements, and other critical data points that a candidate would possibly be willing to share at the time of interview and screening.

5. Credit checks

Reports issued by credit bureaus reflect inference compiled from limited data points. Application of big data, AI/ ML, along with blockchain, would make the reports more accurate, reliable, and accessible.

6. Screening cycle time

Eventually, anything that can be digitalised will get digitalised. With digitalisation comes the risk of falsification but with blockchain comes trust. Combine digitalisation with blockchain, and you would save countless hours, significant resources, and reduce the cycle time to a fraction of what it usually takes.

Over and above, blockchain transfers power back to the true owner of the employees’ data – the employees themselves! Tokenizing the identity of the candidate allows for more effective permissions and control. Increasing data protection legislation will mandate employees’ right to be forgotten, and in that context, blockchain may not just be the preferred technology to adopt but very soon a mandated one.

Applying blockchain in global background screening will have a ripple effect on making the entire process accurate, transparent, and shareable – and these are the very traits that define the efficiency of the process.

This article has been written by Samuel Isaac, Sr. Vice President, Strategy at Neeyamo.