A few weeks ago I interviewed Rob McCargow from PwC to get clarity around the role AI is likely to play in HR and Recruiting. Once the current excitement round AI has calmed down a bit it’s pretty clear to me that Blockchain is going to be the next big talking point in the industry. It is also evident that there is currently very little practical understanding of the implications of Blockchain for HR and Recruiting.
To help me solve this problem my guest this week is Seamus Cushley who has responsibility for PwC’s Global Blockchain Lab. If you work for an employer or a tech vendor Blockchain has significant long-term implications for you so this interview should be a must listen.
In the interview we discuss:
• What is Blockchain and why should we care about it
• The problem/opportunity lens
• The potential applications of Blockchain in HR and Recruiting
• Disrupting the recruitment process with “smart contracts.”
• Likely timescales for adoption and the challenge of integration into existing systems
• Is Blockchain revolution or evolution
Seamus also gives some advice to employers and HR Tech vendors on what they should be doing now to prepare for Blockchain.
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Transcript:
Matt Alder [00:00:00]:
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Matt Alder [00:01:23]:
Hi everyone, this is Matt Alder. Welcome to episode 135 of the Recruiting Future podcast. A few weeks back, I interviewed Rob McCargo from PwC to get more clarity around the role AI is likely to play in HR and recruiting. It’s pretty clear to me that blockchain is the next big talking point in our industry, and it’s also very clear that there’s very little practical understanding of the implications of blockchain for HR and recruiting. To help me solve this problem. My guest this week is Seamus Cushley, who has responsibility for PwC’s Global Blockchain Lab. If you work for an employer or a tech vendor, blockchain has big implications for you, making this interview a must listen for everyone.
Matt Alder [00:02:15]:
Hi Seamus, and welcome to the podcast.
Seamus Cushley [00:02:18]:
Hi Matt, it’s good to be here.
Matt Alder [00:02:19]:
A pleasure to have you on the show. Could you introduce yourself and tell everyone what you do?
Seamus Cushley [00:02:24]:
Absolutely. My name is Seamus Cushley. I’m a director of PwC based out of the UK and I have responsibility for the Global Blockchain Lab here at Belfast. So I help global clients understand the application of blockchain technology, and blockchain is.
Matt Alder [00:02:38]:
Very much what we’re talking about in this episode of the show. And I think it’s interesting because I think it’s something that’s potentially causing a lot of confusion in lots of industries, but certainly in the HR and recruiting world, I think there’s a fair bit of confusion about exactly what it is and exactly what it is, what its implications are. So perhaps we could just start. I Could start by asking the question, what is blockchain and why should we care about it?
Seamus Cushley [00:03:05]:
So in terms of the blockchain conversation, obviously I agree with an origin of Bitcoin technology, which in itself is an interesting discussion. The issue with blockchain and understanding it. We talk a lot about the mechanics of how it works. And you’re right to ask, why do we care? And why do we care about blockchain as a conversation or distributed ledger? It’s the innovation or invention behind it. In terms of technology, we now have a technology stack that allows the establishment of trust between two people, two machines, or two organizations. And based on that established trust, without a third party, we can exchange value. And that very essence of the why will open up many broad possibilities for blockchain applications across multiple industries where people, machines, or organizations share data.
Matt Alder [00:03:51]:
Do you think it’s important that people understand how it works, or is it like any kind of technology where it’s more to do with understanding its implications?
Seamus Cushley [00:04:01]:
Yes, I agree with that. In terms of any technology, technology in itself is just a tool. We are as people apply the technology, we solve the problems. So you can only look at technology such as blockchain through a problem or opportunity lens. And that’s how, again, we discuss and understand that. So taking blockchain in isolation as a technology conversation is of little or no interest to the majority of people. But if we took some interesting examples and looked at its application, Let me give you an example around bringing that why to life. For anyone listening who’s bought a property, they’ve had to depend on two institutions, one for the transfer of money and one for the transfer of contracts. So those two institutions are third parties that we as individuals give our trust to. This technology gives us the ability to remove those third parties and exchange both monetary value and contracts between two parties. So it’s only through the application of solving a problem. Is technology interesting?
Matt Alder [00:04:55]:
Absolutely. And I think the other thing I hear a lot about blockchain is that people seem to understand that it’s behind the sort of the boom in cryptocurrencies that we’re seeing at the moment. But there’s kind of very little understanding of the other applications we’re seeing from it. So you kind of mentioned property there. What other industries and what other use cases are you seeing happening right now that might help people understand exactly what it is?
Seamus Cushley [00:05:25]:
Okay, so I think just step level back before we get into the examples. Absolutely. I mean, cryptocurrencies or digital currencies depend on your interest was where the blockchain conversation was born from, but we quite see a number of lenses to use around finding that problem. So from digital currencies we see many aspects and applications around digital assets and then that broadened into identity, the identity of the asset, identity of the individual, and then beyond that blockchain, the data conversation, we’re seeing now the maturing of conversations around contracts or smart contracts. So across those four ends of cryptocurrencies, crypto assets identity and smart contracts, where are we seeing that start to hook in? Well, I think it’s really important to understand the identity of the individual. The asset or the corporate is probably the key that unlocks the potential of blockchain technology. So we’re seeing a huge investment in that area. So we’re looking again at the sort of kyc know your customer, know your employee space, which hopefully we’ll talk about in a moment. That’s becoming a really interesting conversation. The not so much the authentication and authorization of the individual, but the sharing of that information. So think about it like if I have you, I can authenticate and authorize you, but also with this technology I can hold you to accountability piece. So in terms of the cross industry piece, obviously we work across multiple industries. Financial services was a major attraction for blockchain, but met some barriers. We’re seeing that broaden now into other applications primarily around sharing of assets and supply chains. So that supply chain can be anything in the media space, retail, and actually into the digital asset space as well.
Matt Alder [00:07:03]:
Yeah, I’ve seen some examples in the food and drink industry where it’s being used to verify the origins of products, is that right?
Seamus Cushley [00:07:13]:
That’s correct. That would be in that sort of providence or authenticity really. A classic example people use around digital meets physical world is diamonds. Diamonds in themselves have unique physical properties and have an established both supply chain and registry across that. So if you think from the time the diamond leaves the mine until it’s on the ring on the finger, that can be tracked and traced. But that manual process that exists today obviously has some gaps. So there’s a number of companies working in that space and that’s the sort of primary use case that we look to as an example of where the physical meets the digital. So that providence and origin of authenticity of either a physical or digital asset. But quite quickly you can see multiple applications for that. You mentioned food. So again the authenticity of pork or meat, and given some of the scandal we have around our supply chain on food, looks like quite an attractive use case of supply chain management and Transparency and more importantly, traceability around the contents of the supply chain. I suppose the sort of caveat in terms of the application of blockchain, does it solve the right problem and is the commercial model viable? That’s why I think diamonds as a supply chain conversation compared to the chicken or meat on your shelf at the local market, it’s probably a more interesting commercial model. So like anything around adoption driven by real human need or commercial model, that’s.
Matt Alder [00:08:36]:
Interesting because I think, you know, I’m seeing lots of, lots of companies, particularly startup companies, sort of throwing blockchain around as something that they’re doing or looking into. And you know, it seemed, you know, it seems sometimes that, you know, the commercial case for it isn’t, isn’t fully, isn’t fully thought through.
Seamus Cushley [00:08:56]:
So I think that’s a fair challenge. So there’s a lot of hype around the industry based on some of the. And again, a lot of investment in that industry, which makes it really interesting. But problem solved in isolation are difficult to justify. So your point around, are there valid commercial models or business models? Do people actually want this problem solved? It’s difficult. And then if you look at some of the challenges, having solved that single problem, how do you then integrate it back into either the supply chain, financial system, the retail system, the existing industry infrastructure that exists? So we should look for blockchain being implemented more complementary initially in some of our operational industries, as opposed to being hugely disruptive? I think it’s really disruptive. Competition around blockchain is building new businesses that weren’t possible before.
Matt Alder [00:09:47]:
That’s really interesting stuff and it kind of makes perfect sense. I suppose that takes us very nicely on to talking about the potential applications of blockchain in the talent space. What are you seeing its potential sort of uses and value being in the recruiting and HR world?
Seamus Cushley [00:10:08]:
Yes, again, there’s a scenario that I’ve sort of looked at recent times in terms of the application around the individual. So if we look at that megatrend around the personalization to the individual and recruitment and HR is no different. The employee wants that sort of tailored experience. It really looks to the identity component. And again, as you and I understand and many listeners online, we have many digital identities. So we’re not talking here about sovereign identity, but digital identities. So one of the biggest challenges employers have is validating the credentials you as an employee when you become part of the recruitment process. So does your university certificate actually, is it valid and did you get a first and not a 2 one? So the activity around that aspect, in terms of understanding the validity of your credentials, is an area that we know large scale employers and small scale employers invest in because it’s an area of challenge. We know it’s an area of fraud around applications. So imagine a system whereby you as a graduate leaving university, have a credentialised passport, if you like, that has been signed by your university and by you. And as you go to your first employer, you have a passport that you can validate that you do have that qualification. So that’s an interesting conversation about how you begin to then build up a wallet of your credentials or qualifications or your achievements that make you more employable. It becomes an employability wallet and blockchain gives us that transparency across multiple actors in that conversation. So that would be the first interesting discussion, I think, around the application of this technology and onboarding new employees.
Matt Alder [00:11:40]:
Absolutely. I suppose that’s interesting in terms of all the money that gets spent on background checks and also the ability in which people can embellish their identity online. I’m guessing, I’m guessing it’s potentially a very useful tool for getting to the truth, getting to the truth, as it were.
Seamus Cushley [00:12:05]:
So it brings transparency. So again, there’s sort of the three T’s to remember in this conversation. Transparency, traceability and trust. And a big part of bringing a new person into your company is building, is beginning to go on a journey of trust establishment. And the first step of that is transparency around that qualification or that, that cv, that resume that makes that part of that relationship forming. So that’s given as part of the employee journey as one application that I see as part of that piece. I suppose beyond that then, assuming that the employee has been successfully recruited and are part of your organization, where can this technology come to play? It depends on the structure of the organization. I’m sure you probably had this discussion previously on this particular forum, but think of that global employee. We’re moving into this era of FTEs that are globally placed contractors, aspects of staff joining and leaving teams on demand. And that really throws up challenges around understanding how they get paid. So when you move into payments as part of payroll for your employee base, the technology offers some interesting options in terms of transparency. So there’s a company out there that’s called betweg that have been around for five years now and they offer alternative options for global payroll. So that’s an interesting avenue to investigate. If you’re playing multiple people in a global landscape or you have cross border fees, foreign exchange fees and challenge around payments in general. Does this technology offer some alternative options around transferring funds and then giving you visibility in terms of paying the appropriate tax in the jurisdiction.
Matt Alder [00:13:41]:
No, I can definitely see that there will be value there for large scale employers. I’m presuming as well, as we move more towards the gig economy, when, you know, people are increasing the amount of sort of freelance resource in their business, I’m presuming that blockchain could be a useful tool for the sort of the management of a workforce that’s much less centralized than in the past.
Seamus Cushley [00:14:07]:
Yeah. So again, but I agree with your sort of reluctance to use the gig economy terminology, but if there’s a more flexible workforce that ought to work on their terms, they as individuals need a mechanism which they can be qualify quickly for work and get paid quickly for the work that they do, regardless of where they live in the world. So how do we do that? We need to empower that individual with the ability to do both of those things. So from an employee’s perspective, they need some passport in which they can do that. And from the employer’s perspective, they need a mechanism which they can pay appropriately and have transparency around that and around the service they provide. So going back to that piece around authenticating you and authorizing you as a new employee and then making you accountable, I think the technology plays in that space as well, around aspects of understanding your provision and your contribution, I suppose, to their broader organization. So that’s where I think that’s an interesting piece to bring blockchain in. But again, it’s a broader conversation around the convergence of a number of emerging technologies, of which blockchain is only one, will give us that needed insight.
Matt Alder [00:15:13]:
One phrase that I think gets sort of thrown around quite a lot in the industry that people. I think you’ve explained the concept of it, but just to get specific, because I think it’s a phrase that people may have heard of is smart contracts. Could you just explain a little bit about what a smart contract is and what blockchain’s role is in that?
Seamus Cushley [00:15:36]:
Absolutely, absolutely. So the first layer of the blockchain conversation we’ve touched upon is the ability to share data in both a decentralized and distributed manner with people that you trust or organizations that you trust. So building on that concept of shared data, then we have the second layer, if you like, of smart contracts as referred to. I think the first piece is at this point, smart contracts are not smart. Look at them like a replacement of process. So smart contracts give us the ability to replace step one through to 10 of our process or the actual contract that I may sign as an employee. So if we look at them from that lens of process replacement, smart contracts are option based outcomes. So on certain conditions do X, Y and Z. So what does that mean for us in terms of from a process perspective or an individual? So look at the recruitment process, assuming that you have 10 steps within it, we can use smart contract technology to articulate the conditions under which those process steps execute and the conditions under which a candidate was selected. And as a byproduct of using smart contracts, we also have a secondary layer of an auditable data record of the activity. So that means our recruitment process can be put up for scrutiny. And so if we have a candidate who disputes the conditions in which they were employed or accreditory, or has an issue around the grounds in which that decision was made, we can make all of that transparent. So that’s a really interesting use case around process replacement. And we should look today at contracts as replacing aspects of our process or actual paper contract in itself. And as we see the contract or smart contract component of blockchain mature, we’ll see it get more complex in nature. But it’s a broader challenge around how we simplify contracts and legal terminology. We’re on that arc of improvement.
Matt Alder [00:17:25]:
That’s really interesting actually. And I can see, you know, I can see lots of uses for that in, you know, in terms of, in terms of how the recruitment process, the recruitment process works. Are there any other sort of potential use cases that you’re seeing in the talent and HR space?
Seamus Cushley [00:17:44]:
Yes, the other one is in the talent HR place is around learning and development. So again, going back to summary principle, large scale organizations spend a lot of money training their people, management leadership courses on explicit technical skill sets, but it’s difficult for the employee to take that value with them. So there’s a bit of a demotivation. Why would I do an internal course for three days? Because outside of the market it may or may not be recognized or even understood. But going back to that understanding, if I have a passport of things that I’ve achieved qualifications, then I can still do a number of L and D courses and develop myself professionally, internally within a given brand. And it motivates me to do that. And therefore, because I can at some point, if I decide to move on, take that with me. So we’re seeing that focus on L and D learning and development and how the technology can empower the individual to take that value with them. So it’s a motivating factor to Invest in themselves, which for all of us as large scale employers will obviously help move us forward in terms of our people. So that’s really interesting, I think in terms of retention around the application load. But it all gets back to the human problem and motivating the individual. As I said earlier, Matt, it’s all about what problems or opportunities are we trying to solve with this technology. And a lot of this is the psychology of the individual. And I find that’s the interesting intersection of where human meets technology.
Matt Alder [00:19:06]:
Absolutely. It’s really fascinating. It’s really fascinating stuff. I suppose that does sort of takes me to our next question as well, which is, which is kind of about timescales because obviously we’re very much talking theoretically. We’re obviously seeing things emerging in certain technologies, but not much has practically happened in the HR and recruiting space yet. Apart from a lot of marketing spin. What kind of timescales for adoption do you think we’re looking at? When should people expect to be working hands on with this type of technology?
Seamus Cushley [00:19:42]:
So I think as a sort of level said, I think people will not know they’re working with this technology. I think is the first place, like any good technology is invisible to us. And if blockchain is successfully adopted across transaction systems of which HR is one, then we’ll not know we’re using it. So how will that manifest itself? We’ll have better clarity and transparency around the information that we manage for the individual. Where we’re seeing that, broadly speaking, in multiple industries, we’re out of the lab across multiple industries. You know, we’re beyond the proof of concept, proof of value. We’re starting to see those proof of concepts begin to be integrated back into the main platforms and the main systems within firms, whether it’s financial services or retail. Well, that means explicitly in terms of what I’ve seen in terms of HR and recruitment, there are a number of small startups out there trying to achieve that and they’re focused very heavily on the credentialization space. And that’s the piece around skills and education, a record of your achievement. The challenge that they have and we all have is how does that integrate into the existing system. And as we all know, HR and recruitment systems are somewhat under a broader digital revolution piece. So it’s the first or second startup that is able to integrate with some of the big providers is probably best placed to do that. I think we’ll see that within the next 12 months. Again, some of the work that I’ve been involved in, we’re seeing Some of those small, explicit problems being solved, we’re in the challenge of them moving into more of a pilot phase where they’re integrated into the existing HR landscape, technology landscape that the brands use today. I think that’s our next challenge, integration.
Matt Alder [00:21:14]:
And what would your advice be to employers and also to sort of HR technology companies in terms of, you know, what they should be doing now, how they should be thinking about this and really making sure that they’re not going to be left behind as blockchain starts changing the way we work in the industry.
Seamus Cushley [00:21:37]:
Good challenge. So it’s a broader part of my arrangement around innovation management. And it’s no different whether we’re talking about blockchain, artificial intelligence or any of the other big disruptive tech knowledge conversations. For the executives in the tech companies that are in the HR space, they need to be respectfully understanding the capability of this technology and be experimenting with it. And that does mean large scale investment in multiple millions of dollars. It means having a small focus problem they’re trying to solve and have a small team trying to solve that problem with them. So experimentation and innovation within that tech company is absolutely necessary. Beyond that, in terms of the brands that use those tech providers, they need to understand from their employers, employer’s perspective what they’re trying to achieve. So as you said earlier in the conversation, the market is changing. The employee of today and tomorrow expects a different level of personalization and transparency, ownership around their career. And I think that’s the interesting conversation to be having with employers. And then with that, can we infuse some aspects of the blockchain conversation into that? Whether that is around the transparency of what I’ve achieved and who I am within the brand, or how I can then be seen in a marketplace. Again, that whole marketplace around skills and transparency around how I was chosen for a particular job and you were not, was really an aspect, I think, where we’re going in terms of the gig economy and the market dynamic around talent and talent selection. So again, if you’re a C suite or executive, respectfully, you can’t ignore this conversation because that has impact for your employee base.
Matt Alder [00:23:09]:
So that brings me on nicely to my final question. Is blockchain a revolution or an evolution?
Seamus Cushley [00:23:19]:
Yes, fair challenge. So it’s absolutely revolution. And the reason I say that is because it fundamentally challenges how we understand data and how we share data. So if you think of the evolution of the Internet or the web, World Wide Web, we’re in sort of 3.0, that evolution. And they’re all building on previous good decisions by others that are more talented than you and I in many ways. But we’re building on the shoulder of giants. We’re entering into this sort of industrial revolution 4.0 piece. So we have a highly connected mobile Internet where we have now more people coming online with mobile devices. We’re going to have to re architect the Internet for that age. So that as a backdrop suggests that what we’re about to face into has not been achieved or solved before. So the level of change and the rate of change we haven’t faced. So if we combine artificial intelligence, blockchain conversations around other disruptive technologies, we’re absolutely going to re architect our digital world. But as our world becomes increasingly digital and distributed, we need a technology that can scale while providing necessary security and trust. And I suppose accountability to the decisions that we make and blockchain will not be all of that answer, but we’ll be part of it. So that’s the word that we need to face into. Increased accountability, increased transparency and justifications for the decisions that we make. So this whole aspect of responsible technology, responsible technology leadership is where we need to be having that conversation, regardless of industry.
Matt Alder [00:24:50]:
Seamus, thank you very much for talking to me.
Seamus Cushley [00:24:52]:
Thank you very much, man.
Matt Alder [00:24:54]:
My thanks to Seamus Cushley. You can subscribe to this podcast in itunes or via your podcasting app of choice. The show also has its own dedicated app, which you can find by searching for recruiting future in your App store. If you’re a Spotify user, you can also find the show there. You can find all the past episodes@www.rfpodcast.com on that site. You can also subscribe to the mailing list and find out more about working with me. Thanks very much for listening. I’ll be back next week and I hope you’ll join me.
