Decentralizing Background Checks with Blockchain Technology

Blockchain technology has the unique ability to store and validate data without exposing Personal Identifiable Information (PII). One relevant use case in the staffing world is to create a Career Passport that solves age-old inefficiencies in reference and background checking. In this piece, Mark Roberts, CEO of TechServe Alliance, describes the association’s partnership with Veremark, a blockchain-based background check solution provider, and how decentralizing background checks will lower costs and enable faster time to work.

The Rationale Behind TechServe Alliance’s Partnership With Veremark

TechServe Alliance is singularly focused on driving the success of IT, engineering staffing, and solutions firms, including developing innovative programs and services. We are constantly assessing the needs of IT and engineering staffing and solutions firms and asking the questions:

  • How can we help lower costs?
  • How can we improve a firm’s productivity?
  • How can we help firms enhance the value of the services they deliver to clients and consultants?
  • How can new technologies advance these goals?

Against this backdrop, we identified pre-employment screening as an area of operations in dire need of innovation. IT and engineering staffing companies are required by their clients to perform background and reference checks before placing consultants with clients. The typical firm conducts a large number of these checks. Reliability and speed are critical. These services also represent a significant recurring expense for staffing firms where margins and profitability are constantly under pressure.

Pre-employment screening in the U.S. is a highly fragmented industry that has been bereft of innovation and has not changed over the years. There is tremendous redundancy and inefficiency in the way background checks are currently conducted. For example, in IT staffing, where consultants regularly move from project to project when working for different staffing companies and end clients, a consultant’s educational credentials will be checked over and over again with each move. This is a waste of time and resources.

There had to be a better way.

Veremark came to our attention as a company that offered an innovative solution to the problem of redundancy and inefficiency in the background screening market. In addition to having developed a full-service background screening platform, a user-friendly interface, and integration with Applicant Tracking Systems, they pioneered a consultant credential utilizing the blockchain to increase reliability and speed while simultaneously reducing the need and expense of many types of background checks.

This blockchain-enabled innovation, what we are launching as the TechServe Alliance Career Passport powered by Veremark, creates a tamper-proof credential and can be referenced by future employers. In addition to being a benefit to staffing firms and end clients, it makes a valuable credential controlled by consultants that can differentiate them in the employment marketplace.

Background Screening In The Status Quo

Most employers traditionally conduct one or more background checks on prospective employees before starting work. In the staffing context, the need to perform these checks quickly at a lower cost is particularly critical. Because consultants who work through staffing firms move from employer to employer with greater frequency than traditional employees, staffing firms conduct proportionally more checks than employers who don’t employ individuals who are a part of the contingent workforce. On a relative basis, they spend more money on these services.

Yet, many of these checks are repetitive, even though the checked information has not changed and will never change. Of course, traditional providers of these pre-employment screening services are content to maintain the status quo. More checks (even if it is for the same immutable information) mean more revenue. In staffing, speed is also critical. Until the consultant is authorized to work and begins work, no revenue is generated.

Blockchain Primitives Applied To Background Screening

The blockchain is a solution to these challenges enabling secure management and the updating and sharing of data on the internet. When a data file is uploaded to the blockchain, access to the data is protected and requires a unique electronic key to access the information.

Blockchain is described as a decentralized ledger, which allows information (blocks) to be recorded by two parties and stored across a network of databases (chain). This ensures that records maintain their integrity because each block is dependent on the other blocks in the chain. This also means that it is difficult for any entity to own the data. No one can tamper with the information, bringing enhanced trust and integrity to stored and retrievable credentials.

The efficacy of background checks is dependent on accurate and up-to-date information, which means that creating records that are resistant to modification is crucial. The blockchain enables tamper-proof data storage as well as consistently verifiable records. The TechServe Alliance Career Passport powered by Veremark will leverage these unique traits of the blockchain, which is ideally suited for use in creating an employment credential.

The tamper-proof nature of the blockchain means that once Veremark has performed a check for permanent credentials, such as educational achievements and past work history, those records would no longer need to be rechecked. The first employer to initiate the check recorded to the blockchain-enabled TechServe Alliance Career Passport would receive a credit for use with future checks as remuneration for sharing that data. This will reduce the need for repetitive checks, reduce costs, and provide the candidate with recognized credentials to allow the consultant to be approved more swiftly. With increased speed and efficiency, consultants can start work sooner and generate revenue for the staffing firm. We can see such a credential becoming a differentiator in the marketplace—assuring staffing firms and end clients of the validity of credentials claimed on a resume or LinkedIn profile. It would also be a powerful tool to combat credential fraud and resume fraud.

The Future of the TechServe-Veremark Partnership

TechServe is Veremark’s exclusive staffing organization partner. TechServe members will also have access to preferential pricing. The TechServe Alliance Career Passport will be accessible exclusively through the partnership. Both TechServe and Veremark have ensured that the product is customized to the specific needs of IT and engineering staffing firms and their consultants. TechServe brings over 30 years of industry-specific knowledge to the venture. Some of the industry’s top thought leaders are assisting in this process of customization.

Techserve and Veremark have extraordinarily ambitious goals. We believe that digital credentials such as the blockchain-enabled TechServe Alliance Career Passport will be a disruptive force in overall employment, staffing, and recruiting. Even after rollout, we plan to update and improve the platform and Career Passport continually. Our long-term goal is for the TechServe Alliance Career Passport to be recognized as a badge of integrity that will be accepted by all employers, reduce the redundancy and cost of the current background screening process and allow IT consultants and other professionals to work and be productive sooner. Like its namesake required for international travel, the TechServe Alliance Career Passport will be an indispensable credential for all professionals in the future.

This article was first published in talenttechlabs.com.