Q&A: ‘Blockchain isn’t about making money – it will revolutionise how we work’
Blockchain researcher and HR consultant Andrew Spence on how blockchain technology will shape the future of HR
You’ve probably heard about blockchain, but it’s unlikely you’ve used it or fully understand what it is – let alone have a handle on how it might change work as we know it. Fortunately for us bemused HR types, Andrew Spence, workforce advisor at Glass Bead Consulting, does. The Blockchain Research Institute faculty member tells Ciphr how blockchain might change the way we work, why workers could stand to benefit more greatly than employers, and how HR professionals might need to reskill themselves for the blockchain-enabled workplace of the future.
Let’s start at the beginning. What exactly is blockchain?
I describe blockchain as allowing people to carry out peer-to-peer transactions. Because there is no central database, transactions can’t be hacked and they don’t require the involvement of an intermediary. Many business transactions – whether we’re buying real estate or hiring employees – require intermediaries to do things like check contacts and make sure services are delivered. Blockchain eliminates all that; it is intrinsically neater and more efficient. It promises to enable more secure exchanges of value and information, and to turn many aspects of information into value through tokens.
The exciting thing for me is the opportunity for whole new decentralised business models to develop, and for new ways of thinking about work and society. For example, the lack of documented rights to land is a contributing factor to poverty in developing countries. But this information could be stored on a blockchain. Around two billion adults don’t have a bank account: with mobile devices and blockchain, they could transfer money peer-to-peer without the involvement of a bank.
What are the implications of blockchain for how we work, and the future of HR?
Think about some of the problems in work and HR. One is trust between candidates and employers, about data and people’s credentials. I think we’re going to be looking at all certifications, qualifications and work histories being converted into a verified digital form. Instead of a company such as Microsoft monetising our career data (through a platform like LinkedIn), we will own and monetise our own career profiles. One company already doing that in the UK is APPII, which is working with institutions such as the Open University to build blockchain verification for university qualifications. A lot of startups are planning to do pilots this year, but I imagine in 2019 and 2020 we’ll see the early adopters using it on a wider scale.
These verified work histories and qualifications will lead to new generation of decentralised digital work platforms , with more trust and fewer fees charged by intermediaries. Tokens will give members a say in how the platforms are run, and platforms will become bigger, better, and safer – giving more safety to independent-type gig workers who either want or have to work in that market.
The third implication will be changing many of our HR practices. Paying people monthly, maybe five or six weeks after they’ve done the work, is so archaic. We’ll be able to design systems where money can be streamed almost instantly to contractors using blockchain and mobile technology. This is already being trialled in the construction industry in the UK and Australia. A UK company called Etch is doing interesting work around paying construction workers that day for their work. That’s an amazing development, and has the potential to get rid of horrible payday loans and financial insecurity.
What are the challenges of adopting blockchain?
Many HR directors who I’ve spoken to are really excited about the potential, but are taking a ‘wait and see’ approach as different industries figure out how this will work.
Complexity is a challenge, but I think the people who are designing systems, such as for qualifications verification, are trying to keep things simple. I don’t know how it’s going to play out, but there will need to be agreement on certain technology protocols and core standards. I know three or four universities who are starting to build blockchain solutions, but there has to be collaboration so we don’t end up in a situation where, as a recruiter, you have to log on to one system to check a degree from the University of Manchester, for example, and another for New York University.
Who will benefit more from blockchain adoption: employers or workers?
The reason why I’m working really hard on this stuff is the potential benefits for individuals. In many cases, the balance of power between organisations and workers is not in workers’ favour. I believe that the benefits of an individual being able to have a better visibility of work that’s available, and a variety of different ways of working, could be enormous. The ability to access a better marketplace for your skills , from any location, moves us away from quite restricted, old-fashion work contracts. It’ll lead to people being more empowered, managing their careers better and their own lives better. By making work transactions more efficient, people should be able to find what they are good at and develop their skills, and be more in charge of their work and get paid for it more fairly.
There will be real benefits for organisations, too. You will know who people are, their work histories, and how they are perceived by their peers – so rather than just having a few ticks against a skill on LinkedIn, they can build up a trust score via network analysis and AI. It gives the employer more security. And because hiring is quicker, employers can bring in contractors quickly and easily, as and when they need them.
The cost of hiring will probably drop from current levels of 15-20% to around 5%. Although this will probably benefits employers most, candidates will benefit too.
Which HR roles are under threat from these technological changes?
The changes that will affect HR are a microcosm of what will happen in the wider economy. HR might only be 1% of employees in an organisation, so the real question is: how will the organisation change? If you’re in a business that is going to benefit from AI, automation or blockchain, your business model will probably need to change – or, if your competitors get in before you, your business might not even exist four years from now.
The HR function will undoubtedly change, though, because of a whole load of factors such as employee and managers become more self-sufficient, and tasks such as talent search, recruitment and onboarding becoming automated. There will be HR roles in the future for the behavioural scientists, the people analysts, and the critical thinkers. If you love doing that, there are going to be great roles for you. If you are a great process manager and love doing payroll and hiring 300 temps a month, then your role will change in the next few years. But there is an opportunity to learn about this technology and keep yourself in the game.
Are HR people thinking about how blockchain is going to change how they work?
It depends what industry they are in. In, say, financial services, they know more about blockchain and are trying to hire people with those skills. These HR professionals are probably thinking: ‘this could work for HR, but I’m too busy to think about it right now. But if a great service comes along, I’ll give it a go.’
Then there’s the other group of HR directors who think, ‘blockchain is Bitcoin, isn’t it?’. In other words, they have very low awareness levels. I think HR directors are being bombarded by industry sales messages, they’ve switched off, and they don’t have a deep understanding of blockchain unless their industry is directly affected by it right now.
The key thing to do now is to get into the blockchain mindset, learn about the potential benefits, and get involved in experimentation if you can. We’re not talking about how to make money; we’re talking about rebuilding the next version of the internet over the next two or three decades, and solving some big, big problems.