How Workday plans to bring blockchain to the HR function

At its Altitude partner and services conference this week, Workday has taken some of the wraps off a major project to bring blockchain to the world of HR. In a blog post on Monday, Senior Vice President Jon Ruggiero outlined the company's plan:

Workday is setting out to build the world’s most advanced network of verified credentials, powered by a new blockchain-based digital credentialing platform.

The new platform goes into alpha testing with Altitude attendees this week, which Ruggiero calls "the start of an exciting new journey for Workday and our customers." So what's this all about?

The aim of the project, according to Ruggiero, is to ease the pain caused to HR organizations when verifying certifications, licensing, skills and experience of prospective and current staff. Many of these credentials must be verified for compliance reasons. But the evidence to support them is generally paper-based, or requires laborious direct contact with the body that has issued the credential. As a result, verification is a largely manual process that typically takes days or weeks to complete.

At a time when the workforce is becoming more and more fluid, this kind of friction is a huge obstacle to efficient onboarding and retention of suitable talent. Worse, existing processes for handling and verifying these credentials create a minefield of potential lapses in data privacy.

Using blockchain to verify credentials

Blockchain provides a means of electronically verifying credentials without having to pass around paper certificates or other physical types of evidence. Since it's a distributed ledger that can include multiple participants such as educational institutions, professional bodies and employers as well as the individual credential holders, it becomes possible to verify a credential with a simple digital transaction, as Ruggiero explains:

As credentials are issued by organizations and educational institutions, held by individuals, and shared with employers or prospective employers that need to verify them, blockchain provides a common trust layer, allowing each of these parties to independently verify their authenticity. As the common source of verification, blockchain enables data to move between parties, and its distributed ledger can prove that the data has not been modified and the credentials are still valid. This kind of credential creates a transparent, trustworthy, and reliable source of truth that is instantly authentic once shared.

So for example, an individual who completed a certification issued by a participating institution would be able to include that verified credential in their personal profile when applying for a new job. The employer would then have immediate verification of the credential, and having employed that person, would be able to automatically check for updates or changes to its validity throughout their employment in that role.

Workday will extend its existing identity infrastructure and privacy protections to the digital credentials system, both to authenticate individuals and to give them control over how they share their credentials. With 39 million workers already on its systems — and a dataset containing over 100 million credentials — the vendor believes it will have a head start in building a credible system. At the same time, it says it is engaging with organizations such as W3C and the Decentralized Identity Foundation (DIF) with the aim of keeping its platform open and interoperable with others offering similar standards-based credentialing.

That's important because, while the notion of blockchain-based digital credentialing is relatively new, it's unlikely that Workday will be the only platform provider to emerge in the realm of HR. It will announce more details of its platform later this year.

My take

This early preview of Workday's platform provides a strong example of one of the ways in which blockchain technology can potentially solve real-world pain points for enterprises. That makes it very interesting. But at this early stage, many questions remain, not least around performance, privacy and cost. And perhaps the most important questions surround the issue of control.

The proposed credentialing platform is an example of what is known as a permissioned blockchain network. That makes it far removed from the permissionless networks of Bitcoin and other digital currencies. In his healthcare blockchain article today, Kurt Marko quotes the NIST definition of the two forms of network:

In a permissionless blockchain network anyone can read and write to the blockchain without authorization. Permissioned blockchain networks limit participation to specific people or organizations and allow finer-grained controls.

A permissioned network requires an authority to grant those permissions, which in this case will be Workday. That gives the vendor a great deal of ownership and control over the network, even if it is delegating data access to the network's authorized users.

I was intrigued therefore to see that the list of organizations Ruggiero mentions when writing about open standards did not include the Sovrin Foundation, which Workday signed up to a year ago. This is an organization that promotes the use of blockchain to give individuals "self-sovereign" control over their own digital identities, as Ruggiero wrote in that blog announcement:

A self-sovereign identity is a lifetime portable digital identity that does not depend on any central authority and can never be taken away. The Sovrin Foundation is trying to help lay the groundwork for a global public utility for self-sovereign identity that follows the privacy by design principle.

One of the questions still to be answered therefore is to what extent, and how, Workday will control access to its credentialing network, and who it will be answerable to in its governance of the network. Perhaps it still subscribes to the Sovrin model and simply omitted to mention it. This is important because, as a vendor with a significant market footprint and an early mover with this technology, Workday could be in a position to build a dominant presence for its network — which, as students of network dynamics will understand, could prove to be a hugely powerful position.

This pertains not only to this first use case of digital credentialing, but also to further use cases that may evolve in the future. In a Blockchain Research Institute white paper on Blockchain and the CHRO HR influencer Andrew Spence maps out three waves of impact that blockchain work solutions will have. Candidate verification forms just part of the first wave. Later waves extend into even more crucial areas such as talent markets, pay, work sourcing and teamwork organization.

While it's early days yet, the future landscape of HR could be massively influenced by whichever blockchain networks become the leaders adopted by employers and workers. In that light, we may look back on this this week's announcement as one of the most strategic moves in Workday's history. We look forward to hearing more later in the year.