Published: August 17, 2020


Enterprise blockchain/distributed ledger technology (DLT) is making inroads in nearly every industry. It is used to make payments and verify financial transactions, to trace assets in supply chains and has also been promoted as a potential vehicle for protecting intellectual property (IP), securing real estate transactions and even helping to power modern voting. The need to improve trust in data and other assets, as well as remove inefficiencies from business processes and supply chains, has been amplified by the coronavirus pandemic. These are areas where DLT can be marshaled – alongside other technologies – to improve the overall digital experience.

One big use case that got a lot of attention in the human resources (HR) sector was digital identity and trusted claims, with several startups and human capital management (HCM) vendors floating the idea of a blockchain-powered digital CV. Following the COVID-19 pandemic and resulting worker furloughs and hiring freezes, this idea and the adjacent ideas that stem from it are more needed than ever. With the help of trusted or verified claims, supported by DLT, companies can more quickly verify available skills and work experience/expertise, redeploy workers where they are most needed and identify learning and development needs based on skills gaps.

The 451 Take

Amid the hiring freezes and worker furloughs brought on by the COVID-19 pandemic, there is a growing need for more trusted and efficient skills and work experience verification along with more fluid and agile skills deployment. The use of blockchain and distributed ledger technology could help create a more trusted internal inventory of skills and work experiences for improved employee mobility, while offering those in the job market or gig economy a verified and automated method for proving their skills and expertise. Additionally, DLT-based digital health passport propositions have also emerged, seeking to enable employees and professionals to safely return to work as the pandemic continues.


Why now

In January 2019, 451 Research wrote about how blockchain could eventually eliminate some of the worst aspects of HR. In that report, we discussed how blockchain could disrupt things like resumes, certifications, payroll and work contracts. Our thinking at the time was that this would be primarily focused on new job candidates and helping hiring managers verify an employee's academic and work history and credentials. Now, however, internal mobility and employee redeployment have emerged as a more pressing need.

To understand why this is the perfect storm for blockchain and DLT to merge with skills management and employee identity tools, we must look at demand from the technology side and needs of line-of-business managers in skills management. In our most recent Voice of the Enterprise: Data & Analytics, Data Platforms Advisory report, 68% of respondents either completely or mostly agree that blockchain and DLT will be a strategic priority for their organization in the next three years. In that same research, a top DLT use case for companies currently using the technology is digital identity and trusted claims (e.g., credentials). This data is based on surveys completed in February and March of 2020 – during the early stages of the pandemic but well before it was in full swing worldwide. Although this use case was already important pre-crisis, we believe it will be elevated as COVID-19 continues.

Since we know that more than two-thirds of organizations see DLT as a strategic priority in the next few years and a top use case is digital identity and credentials, let's look at how that could help address managerial needs in skills management. In our Voice of the Enterprise: Workforce Productivity & Collaboration, Employee Lifecycle & HR research from 2020, we asked survey respondents who were managers to list the changes that would most improve the way they managed skills on their team. The top response (43%) was being able to match employee skills to business goals and outcomes. The second highest answer (35%) was methods for measuring skill proficiency.

Using technologies like blockchain and DLT can help verify skills and verify claims of work that has been completed and make traditional processes more efficient. While skills verification is important, skills can be subjective and lack context. Where digital identity comes into play is in verifying work experience. This could be completed projects or campaigns, or used as a digital signature on a report or creative asset. When completed work is added to the blockchain by a project manager, for example, that creates an audit trail for expertise and how skills were applied in context of the work environment. Managers in other departments looking to leverage a particular employee can find who verified their work and get more clarity into their work style or proficiency. This can give more visibility into business expertise that can be deployed against new problems and challenges.

The prioritization of digital identity and credentials as a blockchain use case converges with the need for improved skills management and proficiency management during the COVID-19 pandemic. In our Voice of the Enterprise: Digital Pulse, Coronavirus Flash Survey from June 2020, we found that 52% of respondents' organizations had to halt or freeze hiring in response to the pandemic. That number is up from 34% in March, when we first ran this survey. Hiring freezes combine with furloughs to create a work environment that requires managers to maximize the productivity of their available staff. This means that employees must be dynamically deployed and redeployed – sometimes in new teams – to accomplish the goals ahead of the business. DLT tools can help establish a baseline of identity, credentials, work experience history, skills and expertise that can support more agile and dynamic workforce management as organizations work to achieve their goals in the new normal.

How it works

When we talk about identity in technical terms, we normally refer to basic attributes like name, age, address and nationality. Therefore, validating identity online – in most cases – would mean proving your name, age, nationality or other similar basic identity attributes. However, your persona is more than your name or when and where you were born; it is also about your knowledge, experience, capabilities and skills.

How do companies – for example – verify academic credentials of their potential employees today? They can ask them to scan their diplomas, provide student ID numbers and other information that candidates either know or don't know where to find – all in all, the verification process is manual, slow and burdensome for all parties involved, and is prone to fraud.

A DLT-based digital credential system can be used to issue verifiable academic and professional credentials that individuals store in their digital wallets and can 'instantly' share with third parties, including friends & family and potential employers and recruiters. This system can also be integrated into common learning management systems (LMS) and learning experience platforms (LXP), as well as ERP software, project and work management tools to certify skills, proficiency and experience, and automate the entire verification or certification process. Smart contracts can be deployed – for example – to automatically inactivate time-bound credentials after their expiration date. Academic and professional tracks can also be programmed and automated.

DLT systems can also be integrated with human resources information systems (HRIS) or other in-house software to build libraries that turn verified skills and experiences into work resources, and match employee skills or work experience to business goals and outcomes. This addresses a top challenge of project and program management, which is to effectively manage people resources. In our Voice of the Enterprise: Workforce Productivity & Collaboration, Work Execution Goals & Challenges research from 2020, this was identified as the top struggle in project and program management at both the organizational (26%) and departmental (25%) levels.

Additionally, several blockchain/DLT specialist startups and technology vendors have proposed the use of DLT-based digital health passports to enable individuals to safely return to work and help remobilize the economy as the coronavirus pandemic continues. The central idea is that hospitals, labs and pharmacies running COVID-19 tests record the results on a DLT-powered platform, which automatically creates a credential in the form of a QR code that people can carry on their mobile devices and can be verified by those with permissions on the network as they access venues such as offices.

Which vendors are pursuing this?

In the HR tech world, HCM giant Workday made a major move toward blockchain-powered employee credentials when it acquired Trusted Key in July 2019. While digital credentials is the first move the company is making toward blockchain-powered services, Workday also has its Skills Cloud people analytics solution that could also benefit from DLT as it attempts to identify skills gaps that need to be filled within an organization, among other things.

Another offering in the space is Skillchain, a protocol that verifies university education, corporate training and professional skills using Ethereum. The company offers verified resumes with certified education and employment, as well as formal and informal skills training certifications.

BCdiploma is another company that claims to digitize and secure diplomas, certificates and professional badges on the Ethereum blockchain.

American-Spanish blockchain startup, Vottun, launched a product called Vottun Credentials designed to manage academic and professional credentials, leveraging blockchain technology to reduce academic fraud and verify employee skills. For example, when students complete a course, the educational institution sends the data and publishes the certificates or credentials on the platform. Students keep all their credentials in a digital wallet and can grant read rights to potential employers. Educational institutions such as Blockchain Institute of Technology and EADA Business School are using the Vottun Credentials platform to digitize and secure degrees and qualifications.

Spanish utility company Naturgy and gas industry compliance organization Sedigas also partnered with Vottun and implemented a blockchain-based credential system for technicians – those going to people's homes to install natural gas lines – where physical licenses were replaced by digital ones, which can be activated and deactivated by those with permissions, as well as seen and tracked by the parties involved.

Blockcerts is an open standard that developers can use to build applications – leveraging blockchain technology – that issue and verify official records, licenses and certificates, including academic and professional credentials. Content services provider Hyland acquired digital credentials startup Learning Machine earlier in 2020, and now offers Hyland Credentials, an offering built on top of Blockcerts. Standards like Blockcerts could help project management and work management vendors develop a work experience application for verifying completed work or projects. This is the next evolution beyond verified skills that will allow for more fluid, trusted internal mobility.

A blockchain-based digital health passport offering has been developed by Vottun in collaboration with PwC Spain and RocaSalvatella. Business continuity and blockchain software lab FlexVPC offers HealthXain, and nanotechnology company Quantum Materials launched its QDX HealthID immunity passport offering. The COVID Credentials Initiative – comprising over 60 organizations including ConsenSys, Evernym, ID2020, Microsoft and uPort – has also been working on immunity passports using the World Wide Web Consortium's (W3C) verifiable credentials global standard.

Conner Forrest
Senior Analyst

Conner Forrest is a Senior Research Analyst with the Workforce Productivity & Collaboration team at 451 Research, a part of S&P Global Market Intelligence. His areas of focus are content management, HR tech and corporate performance management.

Csilla Zsigri
Senior Research Analyst

Csilla is a Senior Research Analyst for the Data, AI & Analytics Channel at 451 Research, a part of S&P Global Market Intelligence. She covers the blockchain and distributed ledger technology (DLT) market, which includes an examination of the technology, the competitive landscape and available offerings that are driving the market, real-world use cases and deployments, as well as intersections with other emerging technologies.
Eric Oak
Panjiva Research

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