WorkAxle: Blockchain will change HR forever

Get ready for the future of workforce management – and it’s nothing to do with pictures of apes in sunglasses.

This is blockchain for HR, and Mat Diab‘s here to show us all the way.

We join the conversation as Mat puts Web 3.0 into context…

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Jon Kennard: If the first Web, 1.0, was about connecting you to information, Web 2.0 was about connecting you to other people, what is Web 3.0 about and how can it be useful to HR?

Mat Diab: Web 1.0 in the early days was really about consuming, in the sense that people could publish information, and then, once that information was indexed on things like Google or different search engines, it was easy to go and find that information and consume it – no different than a library.

A library indexes information so that it’s easier to consume for people and they can go find the information they want. Version one of the internet or Web 1.0 was the era of consuming.

Web 2.0 became the era of creation, and creation in the sense that when you look at the leaders in Web 2.0, you see Facebook, Instagram, YouTube, platforms that allow people to go and create online, and in that creation of new content, in that creation of information, we now have more information that is accessible, more information that is shared. We now have something that’s a bit more cohesive online. That’s Web 2.0 – the era of creation.

So Web 1.0 – consume, Web 2.0 – create, what is Web 3.0? Web 3.0 is the area of ownership. Web 3.0 brings ownership back to the end user.

With Web 1.0, we had centralized bodies that were indexing all the information. Google was huge in Web 2.0. We have social media companies that tend to buy up everything that has production content. In Web 3.0, the underlying protocols, tools or data are owned by the end user.

It’s always hard to visualize what things are before they actually happen so let’s use an example. Right now, if I were to sign up for a website, I have to give my information out to every single website, my username and password.

Each website hosts that information, and there’s a risk. It’s centralized in a way where all the security is centralized by that company. I can log in with my Facebook, I can log in with Google, however, that information is still being shared everywhere.

We’re going into an era, and this is where we see that in HR this is going to be a big deal, of something called SSI – self-sovereign identity. Self-sovereign identity means that you are the holder of your information.

If you need to apply for a loan in HR, if you need to apply for a job and you need to validate your education, your diploma, your work experience, you need to actually go and prove that in a way where you’re not giving all the information about who you are, you’re only giving the necessary information.

Self-sovereign identity allows you to do that, and that’s something that is a derivative or is derived from the Web 3.0 version of the Internet.

So, we see this with a bunch of other types of platforms, but that’s one example of how Web 3.0 is going to change HR, it’s really about owning your data, owning your information. And if I move from one company to another, all my information can be moved over, and my work experience can also be validated. Even just submitting my information.

Now, over 60% of people who apply for a job have false information on their CVs. Over 70% of people lie about what they’ve actually done. In terms of education there is always inflation in terms of what someone’s done; you want to look better on your documentation.

There’s no way to validate that information. So having that be in Web 3.0 owned online, that’s what we’re talking about.

Even things like digital identity with the vaccine passport, having to have all your information in one place. You won’t have a passport that’s on paper. You won’t have a traditional vaccine card that’s on paper. It’ll all be tied in to your SSI, your self-sovereign identity.

JK: Let’s dig into the blockchain elements here. If we can look beyond NFTs, they’re the things that have made the headlines recently, they’re the more visibly commercial aspects of Web 3.0, but what are the practical uses of tech like blockchain, beyond the examples that you’ve given, in a business environment?

MD: So in HR, let’s take an example of something like my hiring information right now, if I need to go and apply…actually let’s back up a bit. I think it’s important to break down what blockchain is because in understanding what is fundamentally not what we hear online, eg crazy price pumps on monkey pictures, let’s actually understand what blockchain is.

It is a more efficient store of records than a database. And to understand why that’s important and why it’s going to be used everywhere, we have to understand why we move to databases instead and off paper.

To understand where we’re going, we have to understand where we came from. Why did we move from paper to database? Paper was great. You’re able to have a history of transactions on a piece of paper. You can have all your records in one place, you have to store them in a physical location and maybe a filing cabinet. If you want to have copies, you need to have a double of them. So, double the space, double the filing cabinets, double the paper. Indexing that information was very hard. You’d have to have them all organized, categorized, to go find them wasn’t ideal.

So then when the database came along, at first it was huge rooms for very small amounts of data, but over time it was a better store of information, it was a better store of record.

Why? Because the database allows you to index things a lot quicker. I can go into a search bar and type. I can have many backups. I don’t have to have a physical location. So, in case of a disaster, recovery is easy. And at the same time, I can have as many documents as I want. Unlimited. I don’t need to have a fixed amount due to space. I’m not constrained. And on top of that, I can now leverage that data to go into other systems.

But there’s an issue with traditional databases that was not solved when we moved from paper to database is that you can still falsify records. And the falsification of records and the centralization of that security are both huge problems.

We take a look at a company like Equifax, Equifax governs I think the entirety of North America, it has everyone’s credit scores and personal information, and we rely on their centralized security to host all of our most private information.

And they had a hack where the hacker – I’m using the term loosely – went onto their admin panel, logged in with the admin username and password and had access to everything and dumped all the information because of centralized security. And on top of that, they could have got database or root access, meaning they could change all that information.

If I’m a company and I’ve done something nefarious and I see that there’s something bad in my records, I can go into my database or have my system admin go in, delete that information. It’s not a reliable, auditable transaction history.

Whereas if we look at something like blockchain, it does everything a database can, I can index, it has redundancy, I can search, but transactions are immutable. They can never, ever change. Once they are committed, they can never be modified. And on top of that, if there’s something that ever goes wrong, now there are unlimited copies. So, there’s never ever going to be a loss of information. So, there’s never a loss, it’s a true record of information.

So how does that come full circle here, how does that apply in HR? Let’s take our original example of my CV or my work history. These are all things that can be committed on chain or onto my personal identity or onto me by the respective governing body’s school. Once I go and pass, I’m not just going to have an unofficial transcript and an official transcript that I can send out to places and I print a copy, I can modify it, I can do whatever. Instead, hat institution will have a mark on the chain.

No different than how it’s done through DocuSign when we sign online, there is verifiable proof that that was signed at that location by that person. The same thing with the on-chain data or the blockchain. When we’re committing or that institution is saying ‘Mat Diab has done this certification’ or has had this bachelor’s or this PhD at this date, it is reliably showing that this institution has issued this piece of history onto Matt Diab.

So, when I’m going to go and apply for a job and they say, hey, show us, can you provide us with some of your information? I can say, Hey, here’s my information. It is reliably proven that I have done these things.

In the transitionary period, what’s going to happen is there’s going to be a favorability towards candidates who are using on-chain or blockchain credentials versus those who do not, because one of them is reliable and auditable and immutable, the other one is not.

It’s something that could be forged. It’s something that could be faked. And we see this with everything, even with how money flows. So, the evolution in money versus how we’re seeing the evolution in data now is the exact same thing.

So, a lot of interesting use cases with blockchain, but in workforce management with what we do with Work Axle, a big use case that we see comes with certifications. So, let’s say you’re in the heavy industries and you need to have certifications to drive a certain vehicle or to work on a certain mine or to work with certain material heavy tools. When you do these certifications, they need to be done, let’s say every year, every two years.

If you go to work, you need to go and reliably prove to the auditing bodies that may come once a quarter, once a year, once every two years that your entire workforce is working compliantly on the field. Right now. How do you do that? You have to pull out the record, show that people are certified, pull out all the time and do a cross reference. Wasting your manager’s time your executive’s time. Instead, imagine you had a place where all the data of what people worked with their compliance status was all live and immutable, and you could go and validate and see provably, hey, here’s all the information auditors, go look at it. We don’t have to touch it.

JK: You mentioned money there, we’re going to come onto that. But before we do, another question about this same area, but internet of things, IOT devices. As we move to a more hybrid work environment, how can smart devices help the workforce when we spend less time in the office? Can they remove friction from the process?

MD: This is where we need to start compounding some of the ideas and the technology that’s coming about. We’ll oftentimes narrow our attention to one specific focus; AI and how AI is transforming things or IoT and how IoT’s transforming things or blockchain, how blockchain’s transforming things. We have to go a layer deeper and say, okay, the combination of these technologies and given a year, two years, three years, four years, 10 years, 20 years, what’s the world going to look like?

I’m sure you’ve heard of a concept of like smart cities. It’s becoming increasingly popular in the narrative, but there’s a scary version of it. And there’s the more applicable version of it, IoT is just a way to identify and, and track things that are happening nearby. Now, as we move towards more of a place where all of our information, our digital identity hosts everything about us, our health information, our passport information, everything, every single thing about us…as I’m moving into an office building, I can automatically start a person’s time or track their time as they leave an office building. I can automatically end their time. And you can imagine this on a scale that is tens of thousands of employees and the efficiencies there…

Listen to the full conversation beneath.

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Catch WorkAxle at the UNLEASH America expo, this April 26-27 at CAESAR’S FORUM in Las Vegas.