Workforce Management Featured Article
The Cost to Business of Fake and Misleading Resume Information
Poor hiring decisions have been known to wreak havoc on businesses, inflicting costs in finances and weakening the community’s sense of overall trust and morale. Former HR manager Dawn D. Boyer once expressed that poor hires cost her company millions in contract revenue as a result of having to fire 50 employees who had lied on their resumes about their educations. Also, a 2012 CareerBuilder study confirmed the financial strain that bad hires have wrought on businesses, with the statistic that 41 percent of companies have claimed that a poor hiring decision cost them over $25,000.
Bad hires not only affect companies financially, but also bring about a weakened sense of trust in their communities and culture. People who lie on their resumes tend toward other dishonest behaviors as well, which could increase the likelihood of theft or fraud on the part of the new employee, says Brian Dineen. Consider Mathew Martoma, a man who landed a job as a trader with SAC Capital Advisors after forging a Harvard transcript. He was later convicted of conspiracy and securities fraud charges.
Similarly, bad hires run the risk of a negative client experience with the newly hired employee -- “an outcome that staffing firms cannot allow to happen, ever,” according to Eric Lagerquist, a hiring executive at Eliasen Group. These consequences can lead to messy situations like that of Thamsanqa Jantjie, a man who exaggerated his skills as a sign language interpreter and has faced immense negative publicity after waving “childish” and indecipherable hand gestures at Nelson Mandela’s funeral.
Recently, it has become easier than ever to produce seemingly legitimate resume references with services like FakeResume and CareerExcuse. With the ease of availability and relative inexpensiveness of these services, the task of hiring new employees has become much more tedious for employers. This becomes an even greater issue when companies make bulk hiring decisions across borders, such as in outsourcing deals. With barriers in place like time zones, business customs, and language, validating details on every potential employee’s resume becomes considerably more time-consuming.
Significant steps towards tackling this problem have been made through the use of blockchain technology. Essentially, a blockchain is a time-stamped, append-only public ledger that is reproduced to many distributed locations, which are not owned by a single entity. Entries are linked using cryptography via a consenting protocol, which secures the ledger and allows it to be resistant to tampering. This means that any data entered onto a blockchain may not be altered or removed, even by the person who put it there. Therefore, any data that is attested on a well-architected, HR-focused blockchain can be trusted as accurate.
Applications of blockchain technology can be seen in branches of almost every market, as it gains popularity and momentum to help industries create and maintain reliable and efficient means to track assets, attest to chain of custody, and make reliable information available to everyone who needs it, while protecting it from those who don’t.
This is how blockchain technology has stepped in to help solve the hiring problem. In today’s world, verification processes are fragmented. Each aspect of a candidate’s resume—education, skills, employment history, etc.—absorbs time and resources to verify, but are nevertheless essential to have in order to make informed decisions about the potential employee. This strain on time and resources is something companies have traditionally acknowledged as simply an unavoidable cost of business.
Companies are rushing to solve the problem, including APPII, Learning Machine, and our own SpringRole. It’s a big problem, so our approach is a platform designed for and targeted to the environment of global corporations who are making international hires, in countries like India for global in-house centers, for example. These companies use a public blockchain paired with an ERC-20 token to create a value-based incentive for the attestation of professional credentials and the endorsement of specific skills. This technology will aid in weeding out fake job profiles, or even negate the possibility of them altogether. Additionally, they’re shifting the ownership of career data into the hands of the individual professionals who possess those skills. It’s a focused application of blockchain tech in HR—facilitating interaction among countries by curbing hiring challenges.
Looking ahead, companies will save the time and money used for manual skills and education verification if digital certificates containing this critical information are issued or stored on a blockchain. With this, a previously tedious process is transformed into the simple checking of an app to see if the data is verified. It has the potential to disrupt the hiring industry, saving thousands of staff hours and millions of dollars each year.
Beyond just this, blockchain technology clearly has the capacity to touch a wide variety of industries, just as innovations like cloud computing have done before. Employment verification is one such industry where we can see the direct applications of blockchain innovation and its impact on companies as they avoid costly bad hires.
About the author: Kartik Mandaville is founder and CEO of SpringRole, a professional network that uses blockchain technology for information validation. He graduated from Carnegie Mellon University with Masters from the Language Technologies Institute, School of Computer Science. In 2013, he built an exchange for USD to BTC. Kartik is a Kairos Global Fellow.
Edited by Ken Briodagh