The Talent Blockchain
Considerations for the Future of Managing the Currency of Capabilities
By 2030, the bourgeoning gig economy of today will be the predominant way of working, and its fundamental enabler will be what I refer to as the Talent Blockchain. To articulate that vision in more detail, let’s look at the changing nature of how workers engage with work, and secondly what will be needed to bring together workers and the work to be completed.
How workers are engaged
Around 7 years ago the term ‘gig worker’ made a resurgence. Essentially, it referred to the fast-growing segment of individuals that were working one, or multiple, jobs as an independent (1099) rather than an employee (W-2). The reality is that independent workers completing jobs for others has been around for thousands of years. But the term ‘gig’ originated in the 1920s when musicians would earn money by playing a venue for money (gig). The term subsided and then gained momentum again in the 1960s when organizations like Manpower and Kelly Services provided temporary workers to employers for short term workers. As we fast forward to the present, the gig worker is rapidly growing in popularity and volume, leading to what many refer to as the gig economy.
The current catalyst for the gig economy is the technology that enables the real-time matching of work and workers. Let’s look at the example of ride-hailing services such as Uber or Lyft. 36% of U.S. adults say they use a ride-hailing service such as Uber or Lyft, according to a Pew Research Center survey conducted in fall 2018. By comparison, just 15% of Americans said they had used these services in late 2015, and one-third had never heard of ride-hailing before. Roughly half of Americans ages 18 to 29 (51%) say they have used a ride-hailing service, compared with 24% of those ages 50 and older. In the United States alone, there are 225 million adults that have a driver’s license, and on a global basis, there are 1.2 billion drivers. So, we could easily say that driving is a commoditized skill and there is a large supply of potential workers. Uber and Lyft are approaching 5 million drivers that have registered, which is more than double the number of Walmart employees, the largest employer in the world, which has 2.3 million employees. On the other side of the equation is work (demand). In the calendar year 2018, Uber and Lyft provided close to 4 billion rides. To put that in perspective, Lyft started in 2012 and reached 1 billion rides within 6 years of its launch. So, we can see the possibilities that technology provides by providing the ‘connection’ between a worker and work. But, in the example of ride-sharing services, we have a common skill that many possess (driving) and a common demand (transportation) that creates the opportunity for work when those two are brought together.
But, for the gig economy to flourish, it will have to be more than just about finding drivers to transport people from point A to point B. The challenge will be finding and matching the unique skills required to complete a somewhat unique task/work. Let’s say that a corporation in the southeastern U.S. is transforming its finance function and wants someone with experience in developing future-focused finance competencies and role descriptions for financial planning and analysis in a global consumer-packaged-goods organization. You can see how we went from a very simple and commoditized skill in the ride-hailing example to a highly-specialized need for a very specific task. The fact is, there are a handful of Professional Services Firms that could provide the service/resource that I just outlined, but they will be relatively expensive because they have resources with unique skills; however, technology as with ride-hailing services, can match those needs and skills thereby disintermediating organizations, or at least significantly reducing their rates. Many professional services firms are setting targets that at least 25% of their ‘workforce’ come from third-party labor (independent contractors) to keep their cost down and compete in the age of the gig economy.
Technology is the ultimate disruptor. The chart to the right (www.cityandstatenewyork.com) illustrates how ride-hailing services are destroying the traditional taxi services in New York City. While this was an industry ripe for disruption, many other organizations will face a similar fate if they don’t reinvent how they team with workers.
One of the few things that are keeping more workers with specialized skills from taking on independent work is the lack of a formal way for potential employers/contractees to readily view an individual’s skills.
Many individuals are using LinkedIn, not as a way to connect socially for business, but rather to connect work and workers. There are currently over 500 million LinkedIn users and according to LinkedIn, 40% of those users are active on the site/app daily. 4 million independent contractors use LinkedIn, and 94% of recruiters use it to vet prospective candidates. Essentially, LinkedIn has become the default matching site for many workers and employers; however, like most social media sites, individuals can choose how to portray their skills and experiences.
So, it is clear that technology and the gig worker are fundamentally changing how workers are finding their work. And, commoditized skills and work are the low hanging fruit, but more specialized skills and unique competencies won’t be far behind. That brings me to the second point that there must be a more reliable way to identify talent, beyond tools like LinkedIn.
How Talent is Identified
Ultimately, for more complex and specialized workers to be active in the gig economy, there must be a common record/repository to identify those workers. Employers already have this for existing workers through systems such as ERPs, but in a decentralized/distributed worker environment, that information must reside outside of organizations. That’s where I believe the Talent Blockchain comes into play.
Essentially, blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. For financial transactions, it decentralizes the ledger across numerous servers, so that the transaction can’t be altered and creates a permanent record that can be universally accessed, and more importantly trusted. Historically, society was centered on peer to peer transactions, but over time, to create trust, efficiencies, and convenience we have created a society of intermediaries. For example, we don’t usually hand over cash for a transaction, we write a check or use a credit card, thereby using our banking institution as the intermediary as well as putting trust in the government who ultimately backs the currency.
What if in that same scenario, we utilized a peer to peer network to transact, without a traditional currency or utilizing an intermediary. We have gone back to the simplification of an earlier time, removing organizations as intermediaries to establish trust and verification.
The Talent Blockchain would enable entities that need work completed, to find qualified workers, by accessing the following credentials/details:
- Work history: list of all employers and titles
- Skills: Demonstrated skills based on past projects and experiences
- Formal Education: the achievement diplomas, degrees, or certifications from any public or private institution.
- Continuing education/ Life-long learning: individual learning record to include organization-based training or independent study record through a TinCan API.
- Certifications/Designations/Accreditations: current status of professional designations or certifications. (E.g. CPA, CFP, CFA, PMP, etc.…)
- Background check: verification of any criminal records, or authorization to work in the country
The Talent Blockchain will greatly simplify the accessibility to qualified talent and further enable the gig economy by creating greater efficiency. In the next few years, we will likely see the rise of talent consortium or syndicates, but ultimately a Talent Blockchain will be the ideal solution once the technology, protocols are adopted.