Blockchain is a public ledger most closely associated with cryptocurrencies. HRM speaks to the CEO of an Australian company using the technology to transform recruitment… and HR.
If you’re an HR professional (especially if your focus is recruitment), you may not want to meet Sergei Sergienko, CEO of Chronobank, a company working on a blockchain project. If he has his way, five years from now you won’t have a full-time job.
And the gigs any professional applies for? He wants them to be completely different from the one you have today. But you’ve heard all these kinds of apocalyptic claims before, and they’re no big deal, right?
Sergienko is a co-founder of Edway Group, one of Australia’s leading industrial training and labour supply companies, and he’s hell-bent on seeing that his own business is one of the first to feel the squeeze from his new blockchain-powered platform Chronobank, which is leading the distributed ledger technology revolution in the recruitment industry.
“The first [HR-related industry] to go will be the labour hire industry. And I would like to see my companies go first,” says Sergienko, in what seems an act of self-immolation. “The reason I do is because if there is a better way of doing things, why would I do it the worse way? So I either have to adapt or be put out of competition.”
What exactly is blockchain?
Andrew Spence, HR transformation specialist and CEO of Glass Bead Consulting, explains that blockchain is a decentralised database shared among a network of computers. All computers in the network must approve an exchange before it can be recorded. “Blockchain reminds me of double-entry accounting – with all the ledgers and the cross-checking between them,” says Spence.
“But the added advantage to blockchain systems is that the chains are all connected, so we’ve moved away from this centralised database concept. The benefits are that it’s very hard to hack and it gives more privacy.”
(For a more in-depth explanation, read this.)
Because blockchain is a ledger, it can hold data besides numbers. That means the technology could instantly verify all claims made in a resume. So you won’t be able to lie about holding a previous position and you can’t pretend you went to university that you didn’t. “Anyone can write anything on their resume. But that would not be possible if the resume is kept on blockchain,” says Sergienko.
The second facet of the employment world Sergienko would love to disrupt is full-time positions. He believes people should be rewarded for what they’re worth and not chained to their desks as “slaves”. “I would like to see full-time positions disappear. People are stuck in their jobs and working crazy hours for a salary,” he says.
This forms the second stage of Chronobank’s strategy for disrupting the HR and recruitment industries. It’s called LaborX, and it’s a decentralised marketplace where people in real-world professions will be able to sell their labour hours to anyone. Essentially, labour-hour tokens will act as a substitute for payments in government-issued currencies.
“What we’re trying to do is create a marketplace or an exchange, where you have an order book. If you’ve ever traded shares, you will know what I’m talking about,” says Sergienko.
The expected pushback
Surely there will be institutional roadblocks though? The taxi lobby groups fought hard against Uber, and it’s taken Bitcoin years to gain credibility.
“Of course the industry will [push back],” says Sergienko, “But I don’t think [HR’s] lobbying is as strong as the finance lobby. And they’re not as united. They’ll probably use stuff like workers comp and tax collection as an argument. Luckily, I’ve already thought of that, and the system will have it built in.”
Chronobank is a fairly new company, so all this is probably pretty far off, right? The taxi industry thought the exact same thing, quips Sergienko.
“They went through a bit of a shock within five years. I think we can do the same in HR – which has been getting it too easy for quite some time,” he says. “I would like to see the whole HR industry gone. Not gone, as such, but filled up by computers, which is more effective and cheaper. That’s what I would like to see.”
The human factor
But surely you still need a strong personal element, right? The profession is called human resources, after all.
“If HR thinks that a robot can’t go through a list of 20 candidates and pick three, then they had better think again. If you can get away with charging 20 per cent of a person’s wage for making three phone calls and sticking a position up on Seek, then I think you’re being overpaid.”
That’s because, as Glass Bead Consulting’s Spence explains, you can’t look at blockchain in isolation from other technologies.
“We have to look at the developments in AI and machine learning too, which will be layered on top of blockchain,” says Spence.
Despite that, Spence believes the role of humans in HR won’t disappear. It will simply evolve, with new technologies like blockchain doing the bulk of simpler tasks.
He believes any jobs regarding empathy, emotional understanding, complex problem solving or critical thinking will likely be a safe haven for humans. So Spence’s message to HR employees is to evolve your skillset immediately.
But what’s Sergienko’s message?
“It’s not like I have a personal agenda against any of the businesses that we’ll be affecting. We believe in human evolution and computers. And that’s why we’re doing what we’re doing,” he says. “Either you adapt to change, or you are left by the side of the road.”
This article originally appeared in the October 2017 issue of HRM magazine.