Season 2, Episode 11: How Blockchain Empowers Job Seekers
Resume inaccuracy costs employers more than half a trillion dollars per year and there’s always an element of risk for businesses when they hire new talent, but what if there was a way to minimize that risk while also empowering job seekers?
Blockchain technology is perhaps best known for its role in safeguarding the cryptocurrency infrastructure in Bitcoin, for example, to make financial transactions secure without a need for a bank or a middleman. But in this episode, we are talking about the use case for Blockchain in HR. What are the challenges and benefits for both candidates and employers? What if candidates could have a tamper-proof, portable Digital Work Passport? How could Blockchain impact the future of HR? You don’t want to miss this episode with Erik Simins, CEO and co-founder of Workwolf, a Toronto-based start-up that is disrupting traditional hiring cycles to automate and improve time to hire via a two-phase hiring process and a Digital Work Passport.
Hosts: Roberta Cucchiaro and Dominika Gałusa
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Roberta Cucchiaro (00:31): Hi and welcome to the 11th episode of the Transform Talent Podcast. This is Roberta Cucchiaro.
Dominika Gałusa (00:38): And Dominika Gałusa. In this episode we would like to talk about the role of blockchain in reshaping the future of work. Blockchain technology is perhaps best known for its role in safeguarding the cryptocurrency infrastructure in Bitcoin for example, to make financial transactions secure without a need for a bank or a middleman. But in this episode we would like to understand the use case for blockchain in HR, what are the challenges, as well as the benefits for both candidates and employers, as well as the impact of resume fraud on businesses and what led our today's guest to found Workwolf and build their digital work passport.
Roberta Cucchiaro (01:16): So, that's why we have invited Erik Simins. He's an entrepreneur, CEO and co-founder from Toronto in Canada. He began prototyping blockchain HR tech in 2017 and then co-founded Workwolf, a Toronto-based startup that is disrupting traditional hiring cycles to automate and improve time to hire via a two phase hiring process and digital work passport. Workwolf was the winner of the global 2020 Enterprise Blockchain Awards, as well as the winner this year of the 2021 ManpowerGroup HR challenge for automating recruiting at VivaTech in Paris. So, welcome Erik. How are you?
Erik Simins (01:57): Good morning, I'm great. Thanks for having me.
Roberta Cucchiaro (01:59): We are very excited to have you on this podcast. Blockchain is a really interesting topic and we do have a lot of questions, but first things first, I was thinking blockchain is a bit of a buzz word, a bit like artificial intelligence, AI. It's a word that we often say, we often hear, read about, but I bet that if we went around doing a vox pop asking people to define what blockchain is, the answers probably are not gonna be very good. So, I have a very simple question for you and hopefully you can give us a simple answer that can suit all backgrounds, all audiences, what is blockchain?
Erik Simins (02:37): Yeah, I'll give you a simple answer. And it's not as complex as people think it is, but listen, I'm the CEO and entrepreneur, I'm not a technology developer, but I think I've had enough exposure to be able to provide you guys a basic insight into what it is. I'd say the first thing to recognize what blockchain is that it's an immutable ledger. So, transactions that happen on a blockchain are there forever. So, it's excellent for tracking different transactions on a network. And how a blockchain works in a digital currency environment is that a lot of computational power is put behind securing and cryptographically ensuring one block moves to the next block. And these blocks build upon one another and at any point if something is done incorrectly, it's built to prevent people from gaining the system. So, at any point, if somebody does and the transaction is invalidated or truthful, it eliminates the block and it can't continue.
So, you've got this massive, now with the Bitcoin network or Ethereum network, this massive immutable truth of all of these transactions that are happening.
Roberta Cucchiaro (03:49): Okay, so actually that's why it's called blockchain.
Erik Simins (03:55): Yes.
Roberta Cucchiaro (03:55): Okay, I never thought about that. So, I already learnt something new.
Roberta Cucchiaro (03:57): So, what attracted you to the world of blockchain? What led you to found Workwolf?
Erik Simins (04:02): I'd been a member of an entrepreneur forum for the last seven years and I'd become extremely close with the group. We still meet. We met yesterday actually. And one of the members of my group, I call him the grandfather of Ethereum because his son is Vitalik Buterin. And so, we were introduced to, our forum was introduced to blockchain very early on. And what Dmitry had shared with us was, you know, blockchain and how it works is, it will fundamentally change how data is accessed, managed and stored. And he said, "You know, you might wanna look at it for your business." And so I did and in recruiting and credential verification it was the perfect use case. The question was, how do we make a commercially viable product out of this thing because there's a lot of goods and there's a lot of bads with blockchain. So, we had to innovate on an innovative technology to actually make it work and make it be commercially viable for our client base.
Dominika Gałusa (05:06): Okay, so when I was looking on your website I saw a key word: resume fraud. So, I'm very curious if you could tell us more about the things that people lie about, what are things not easy to spot for a recruiter and most importantly, what are the consequences for organizations? And one more question as well is how this resume fraud all links to Workwolf?
Erik Simins (05:34): Sure. So I think there was four questions in one there. So, I'm gonna try and tackle them one by one. So first thing, what is resume fraud? How often does it happen? What's the expense or the cost to the employment industry or to corporations? So, resume fraud, it sounds big, right? Sounds like fraudulent behavior you think of like illegal behavior, right? But that's not necessarily what they're talking about with resumes. It's misrepresentation. So, resume fraud's misrepresentation. So, if I'm presenting myself to an employer and I go in, even if I declare that I've done something that I haven't, even if it's like fudging my, my numbers if I'm a sales guy, saying, "You know I did this 120% to plan," but really it was 115 or 110. That's resume fraud. Okay, so there are static and dynamic things that we verify within our network. Dynamic are things that, that change as people move from one employer to the next. And then the static ones are the, are the ones that stay the same. Like once you get your university degree within the Workwolf ecosystem it never needs to be validated again. So, things can be repurposed. Things that are dynamic are things like a criminal record check. Those can change. Or your record of employment from one employer to the next.
So, what I've seen over the last 15 years in the recruiting industry, things that get falsified or little white one resumes, the most popular ones are start date, end date. People like, they don't like to have gaps in between their employment. So, they'll make one a little bit longer and one a little bit less. And they'll kind of blend them into one another. That's resume fraud. Saying that you have a degree on your resume and putting a date on a resume of when you went to that school, that typically is misrepresentative if you didn't graduate. So, saying that you went to McMaster University in 1998. As an employer, I'm gonna see that and gonna think, "Oh, okay. This guy graduated," unless I actually check, right? So, that's misrepresentative. And then there's real resume fraud which is basically saying, "I did this job," but I didn't do this job, or I graduated from this school or I didn't graduate. And any type of accolade or accomplishment that you declare that didn't happen is resume fraud.
And the consequences of this is massive. So, what happens is, and I liken it to dating. It's probably the best analogy. You never know what you're gonna get until it's like, everyone's on their best behavior in an interview, right? So, the problem is that people misrepresented themselves on their resume. They have to misrepresent themselves in the interview to match that resume. And then three months into the job, the employer's like, hmm, this guy isn't performing like we anticipated. And that is a massive problem. So, three out of five resumes have some type of resume fraud. Inaccurate, embellished, or absolute lies.
And some people think that's a staggering number, but that's how big the problem is. And what it does for business is it costs over half a trillion dollars a year. And so when you're an entrepreneur and you're looking at a problem to solve, usually the bigger ones have a bigger upside and a bigger opportunity to actually change an ecosystem, but they're also harder to push forward. So, this is a systemic problem that I've seen in every client that I've worked with, over 250 over the last 15 years. Enterprise clients like Johnson and Johnson or Amazon, and all the way down to startups, right? It happens all the time.
Dominika Gałusa (09:20): That's, that's a lot, actually. I didn't know that it was such a big problem. I know we had lot of questions in one go, but if you could just tell us, how does it link with Workwolf?
Erik Simins (09:34): So, the network, uh, a lot of the heavy lifting over the last four years was to get our credential issuers as part of the network. So, we have over 100,000 sources of truth that are direct connections to these sources. So, whether it's academic institutions, employers, big companies like Equifax or TransUnion for credit, records of employment, we've got direct connections to these validators or credential issuers. But we also have partnerships, because not everything is automated yet. We also have partnerships with certified background checkers in the countries that we do the work. So, they become our sources of truth. And they're the same resources that enterprises use today. The difference is that once a credential is validated, the digital work passport renders it tamper-proof. So it can't be falsified. And another good analogy here is it's like a safety deposit box where Dominika, or Roberta, you have a permission ledger or a window to be able to share that information, but you don't have the keys to make deposits. Only the credential issuers have the keys.
So, what that means in the workplace is that candidates can pre-clear themselves with the employment centric credentials that employers are looking for. Or instead of a traditional background check at end of a hiring cycle that can take one to two weeks, the digital work passports can be deployed mid cycle. So, for the finalist candidates, three or four can receive a digital passport. And the value, another challenge was to, to make a product that doesn't just provide value to the employer, but provides value to everybody. So, the candidate who does not get the job, gets to keep their digital work passport to empower them for their next job. And what happens is you get, you know, eventually you get this, this network effect. So, you have candidates who didn't get the job going to the next employer, and the employer says, well, what's this?
It's like it's a digital passport, you don't have to background check me. Initially, the employer is saying, no, no, no, I'm gonna do my own background check. But then they'll cross reference that the digital work passport has the exact same information validated, right? And then you get this, this nice, or we anticipate you get this nice entrance into the marketplace. And we get our mission, which is to unleash the power of truth. I'm a big fan of Stephen Covey. He's a great leader. There's one book, 7 Habits of Highly Effective Individuals, was one of the first business books that I read in my twenties. And he says, nothing is faster than the speed of trust. So, if I trust you, I'm confident that what you say is legitimate and I can just move on to other things, right? So, that's really what our ecosystem and, and platform does. It empowers the employment market by improving the authentication and trust level between the actors within the hiring cycle.
Dominika Gałusa (12:43): So, when we were talking about this validation, thinking about entry-level positions and senior leadership positions... and this resume fraud, and all those problems we're talking about. Does it affect both of those groups, or can you see frauds happening more on the entry level positions or senior leadership positions? How does it work?
Erik Simins (13:04): It holds no barriers. So, it happens across the entire value chain. So, whether you're just starting a job or whether you're a CEO. And if you just look up resume fraud, you can easily see several examples of some very well-known executives that were caught lying on their resumes about their history. So, it happens all the time at all levels within the employment market. And I just, I do wanna touch on one thing 'cause I think it's really important to get to the why of, you know, why you do the things you do and what motivates you daily. I've never been a big fan of social media. And the reason why is, is I think it creates this digital, this unauthentic digital persona, and it's created this image that, that lacks the authenticity that people require in their day-to-day lives. Like, what's the truth?
So, this counterbalances that. So that we're a credential that's available on LinkedIn. So, now people, because there're zero authentication sources for LinkedIn, I can say I went to Harvard and there's no check. So, as a, you know, as a feature on LinkedIn, and if you went to my LinkedIn, which is, LinkedIn/empoweryourpeople, or just Eric Simins, you can validate my credentials right there. So, what the link does is it takes you to the public dashboard, and the public dashboard displays what credentials I've had validated, but it doesn't share the results. To get the results you have to request access from me directly. And I can deny that, I can grant access or at any time, if I've given it, I can revoke it back.
Roberta Cucchiaro (14:43): and that's what you call the digital work passport, right?
Erik Simins (14:49): It is. Yeah. That's the digital work passport, and we use a permission ledger for that access window.
Roberta Cucchiaro (14:55): We will have some more questions about the digital work passport in a bit. I just, before we go there, I just had another question for you. I really liked what you said about the safe, about it being a safety box. I just wanted to hear from you, thinking about what are the main problems with Blockchain and the main benefits, putting those together: what is the strongest use case for HR and for credential verification using Blockchain?
Erik Simins (15:23): So, Blockchain is excellent at a few things. So, one is the immutability that I had talked about before, or the security of what the data records are, whether it's a, you know, a token, a digital asset or a credential. But it's also very good at democratization and decentralization. And so for democratization, that's part of the challenge within the friction points in the hiring cycle in HR. Because the data is currently siloed in locations that are hard to get that information.
So, if you're a university registrar, it's a summertime and you call into the registrar to do a background check on somebody's credentials. It could take weeks to get, hear back from them if it's not a direct access point. And the decentralization of this, it means we've taken the hard to access data, created a central repository, not just for the employer but for the individual. And the individual then has this portable digital credential that they can use for employment, but there's also other use cases as well, not our initial use case, but it could be for just basically proving that this is the truth. So, where's, where's that important? Like, landlord-renter, right? That's important. Banks, in terms of this information is, is who I am and here's my declaration or here's your access to my digital work passport. So, there's a lot of use cases.
The immutability of it is important too, right, so that it's tamper proof. So that the candidates can't go in there and falsify this information once it's in there. That's the good part. The bad part about public blockchains is that they have private keys and private keys, I mention this in my talk at VivaTech, what if you lose your private key, you never get it again. There's no password recovery. So, what that means is, what that's equated to just on the Bitcoin network alone is $140 billion of money that's gone. So, you'll never, unless you find that, that private key, you'll never get that money back. It's there and it's gone and it's somewhere in cyberspace. So, is that approach to blockchain something that's commercially viable? People have gotten very used to being able to recover their passwords in one click. I do it all the time. And I'm sure everybody has in terms of lost, losing their passwords. It's just because there's so many new technologies coming out and so many platforms like you got to have passwords all the time, right? So, if we made it so that you lost your private key or if you couldn't recover your private key then we'd have a lot of people calling our customer service department saying, "Hey, how do I fix this?" And you can't.
So, we use a private network. So, we've partnered with Hyperledger Fabric at IBM. We use that framework for our own blockchain, and that allows us to have some of the benefits of things like password recovery.
Dominika Gałusa (18:21): And because, me and Roberta, we're based in Europe, so we are really curious how are you addressing GDPR concerns.
So, that's the data we use to be able to empower both sides of the market. The rest of the data, in terms of those credentials, we don't have access to. And that is the concept of this decentralization, is that we don't become the central repository of all of this information. The information is the candidates, the users, to do with whatever they want. So, our whole intent before GDPR was actually a thing in Canada or U.S. four years ago, was to always make this information democratized and to always make this information central around the user.
Dominika Gałusa (20:15): So, you just said that the user, the candidate has control over their data, but how much control, what can they change, how much can they go into the digital work passport and influence what employers see?
Erik Simins (20:32): They can't. They, the technology, if it's one of those, so I discussed the concept of static versus dynamic credential, right? So, if they need to update that information they can do that with one click because the network then tethers that individual to that validation source and all that candidate needs to do, if it's been a year and a half later or I'd like to show a bank or an employer my credit score and we can pull that information. So, they can upgrade or refresh their data at any point. And they have control of that.
Roberta Cucchiaro (21:07): So, basically it's like you mentioned before, LinkedIn, it's creating a LinkedIn that is verified. So you are sure about the information that you are reading about a candidate. And I did really like also what you mentioned about the Packfinder. So, being able to match the skills of a candidate to a job position. And especially if you're sure that those skills are the ones they have. And so that's, that's really interesting. And do you operate at a global level as well?
Erik Simins (21:35): So, with our upcoming work with Manpower, we were asked if we could support initially three countries but now, our last discussion was more like seven. So, yes we can support international growth and scaling, and we've got the team to be able to assist in terms of making those additional partnerships and relationships. So, yeah, right now we can do it. It's not as cost effective because our partnerships exist in Canada and the U.S., North America, to be able to validate. So, the idea is as we grow this out country to country, that we have a preferred source that we work with to do the manual work who understands the country dynamics. There is a big difference between France and Canada, and you know as we build out that partnership, because we're pretty close to securing a deal for France, you know we learn that it's validated the fact that we should go country to country because there's various specifics around how it works and what the process and hiring cycle is in France versus Germany versus the Netherlands or Canada. Even there's a big differences in Canada and the U.S.
Roberta Cucchiaro (22:41): I can imagine. So, what's on the road map for Workwolf?
Erik Simins (22:47): Our most important thing right now is to make the product as available as possible to enterprise organizations and recruiters who want to increase or reduce their time to hire and increase their hiring efficiency. And improve the quality of data that they use and their, and the candidate experience. So, by integrating with 12 applicant tracking systems and human resource information systems, it allows those employers a much easier way to integrate with our tech and take advantage of it.
Roberta Cucchiaro (23:20): And putting your Workwolf hat on the side. So, apart from credential verification, how do you think blockchain is going to affect HR and the future of work?
Erik Simins (23:32): I think that in a traditional sense, blockchain really needs nodes or verifiers or infrastructure within those sources of truth. And because the business model of background checking or verification already exists, it would make sense that eventually those sources of truth will become nodes on the network. And those nodes, but peoples have to be ready for that. Not everyone understands blockchain. Not everyone knows the value of it. So, and that could take a decade or more until people start to have their own ecosystem of blockchain within their environments.
So I don't think we're going to see a lot of blockchain other than, than Workwolf for credential verification. And I mean, unless there's a couple Me Toos that come to market, which is possible. But really this is the one use case that I think we'll see is, is ongoing innovation around improving the speed of transfer of validating information. Where I think blockchain is really going to catch hold is in supply chain management. That is an excellent use case and there's companies like Walmart that are using it in terms of tracking their food, and Hublot, which is a luxury watch company, to ensure that every single tiny piece in that watch comes from a validated source. So everything is tracked, from manufacturing of those tiny little pieces, down to the finished product of the watch. So it's got excellent use cases for that, it's just, it takes time to be able to implement things. It's slow, expensive, and there's a lot of work being done on innovating speed and improving how data's managed and processed. It takes a lot of energy to process one transaction on the Bitcoin network.
Roberta Cucchiaro (25:17): And so if I took you on a time machine, and we fast forward to 2051, what would we be talking about?
Erik Simins (25:27): I like this question a lot. So I think, I'd like to think that we'd be talking about sports, and music, and theater, and family, and kids, and playing, and ideas, versus what I see today, which is talking about other people, or talking about things, right? So, I really believe that it's the ideas that are inspirational, and what can, what can change the world for the better, not so much what the other two think. So I'd like to think that we're thinking about ideas, and having a lot more fun. And hopefully we've used technology over the next 30 years to free ourselves of a lot of the work, and just how society has evolved. I think there is an opportunity here for us, for everybody, to leverage technology for good, and be able to free up our time so that we can spend it with our loved ones. I've got a new family, two new little kids that we brought in this world recently, and you know, your values change when that happens. As much of a workaholic as I am, and as passionate as I am about problem solving, I also want to spend a lot of time with my family. So hopefully technology takes us there, where we can spend less time on the tasks, those are automated, and more time having fun and thinking about cool stuff.
Roberta Cucchiaro (26:53): Ah, that's nice. Enjoying ourselves and living our life.
Erik Simins (26:55): Yes. Which you guys do much better in Europe. I was in a cab I think at like 12:30 at night on a Tuesday in Paris and everybody was out in the restaurants. Like it was, for me it was like, "Don't th-, is it a holiday tomorrow?" and the cab driver was like, "No, Monsieur, this is how we live." And it was just so nice to see everyone, you know, out and enjoying good food, and good wine, and laughing, and just having that social connection that, that COVID really put a damper on.
Dominika Gałusa (27:31): Yeah. C'est la vie.
Erik Simins (27:33): Yes. (laughs). But I think we're getting back to that, and you know, I love, I love that kind of stuff.
Dominika Gałusa (27:41): So I just want to summarize what we talked about, and wow, that was a lot. But, what strikes me the most, which is that there's this systemic problem of three out of five resumes have resume fraud. And I think that's a very high number. And then that it causes half-trillion dollars per year for companies.
Roberta Cucchiaro (28:07): And well, with the rise of remote working and talking with our colleagues at Manpower Group. We do really believe that it is important to have a trusted solution for individuals to share data with an employer in a way that it's easy and it's secure, and really putting the candidate experience at the center. So you make also the application journey easier, right? And so as we are currently exploring potential solutions with you Eric, and Workwolf, there's really a lot to look forward to.
Erik Simins (28:38): We also look forward to working with ManpowerGroup and making the process and the candidate experience just easier, less stressful, and something that brings truth to the forefront of the employment market again.
Roberta Cucchiaro (28:50): Thank you so much for joining us today on the 11th episode of the Transform Talent Podcast. We hope you enjoyed this episode as much as we did. And to all our listeners, don't forget to subscribe and leave us a review in your favorite podcast listening app. See you at the next episode and have some fantastic summer holidays. Bye for now. Bye-bye.
Outro (29:16): The Transform Talent Podcast, because we know the right talent transforms organizations and helps your business flourish. Talent Solutions, business, and talent aligned.