The open blogging platform. Say no to algorithms and paywalls.

The Impact of Blockchain on HR: Eliminating Hiring Bias

Every week we hear news about inconsistencies regarding the diversity found in the workforce across various companies. This issue of diversity has been increasingly highlighted over the past few years, from random forums to the BLM movement.

image of person at a laptop

AI-powered job search platforms like Lensa are trying to negate these outdated practices through different technological methods. The blessing technology has brought to operations at all human resources firms that have adapted to this is great. From automation to AI, various technological advancements have been made to ease the mundane tasks in HR.

A recent advancement that has taken the human resources sector by storm is the use of blockchain methodology to increase diversity and decrease hiring bias across companies. There are many reasons why a strongly diverse workforce is beneficial for the financial and humane side of companies, which we will explain later in this article.

The first step is exploring what is holding back organizations from tackling this issue and understanding how the use of blockchain eliminates hiring bias at organizations.

Debunking hiring bias

Before we begin talking about how diversity impacts an organization, let's weigh in on how it relates to eliminating hiring bias.

Hiring bias is the formulation of an unconscious opinion on a candidate without having objective knowledge of them. In other words, it is the first impression you get of a candidate that becomes the deciding factor on whether to hire them or not.

There are many kinds of bias that are prevalent in the hiring process. The most common one is an affinity bias. Affinity bias manifests itself in the workplace as a recruiter having an affinity for a candidate over others due to common topics or relating to the candidate more than the others.

Attribution bias is also common and is when hiring managers unfairly weigh a candidate's attributes in a subjective manner. Similarly, confirmation bias shows up as a manager instinctually making a hiring decision over a candidate.

Lastly, social bias or name bias is the discrimination of select groups done by the hiring manager. This can range from the presence of an ethnic name to gender, race, sexuality, and so forth. It is a taboo topic that is becoming increasingly popular in conversations on hiring.


Why diversity in the workplace matters

The way diversity can be defined when looking at a work environment is the hiring of various people coming from different backgrounds. This can mean different religions, orientations, gender, ethnicity, culture, skills, and even education. In the past, women couldn't even vote, which shows just how far we've come with diversity, starting at the basic level.

There are various advantages to having a diverse workforce that often gets taken for granted, the first being increased cases of innovation. Homogenous groups create homogenous results, in other words, people with similar lives will have similar ways of thinking, which might hold a company back from moving forward in the market with new ideas.

Diversity also increases productivity and reduces employee turnover by bringing new and different solutions to the table, especially when working with clientele. This increase incentivizes teams to have some healthy competition when problem-solving. These positives tend to result in increased revenue for the company in question.

When it comes to performance reviews, using the right phrases can be crucial. Well-crafted performance reiview phrases can provide valuable feedback and improve communication within a diverse workplace.

How blockchain becomes the Solution

Simply put, the issue at hand is the complexity of our existence makes some bias inevitable, which then informs the decisions we make in various ways, as mentioned in the above sections. This bias can have extremely negative financial impacts from a business point of view.

We got to see this formation of bias objectively through faulty data inputs found in artificial intelligence software, which in turn generates extremely biased results due to incorrect sources. This brings us to the biggest struggle some might face with using AI for recruitment: the bias that is generated from built-in biased data.

There are two factors that go into hiring: trust and credibility. The information on a candidate has to maintain both of those between the recruitment team. Apart from this, recruiters need to be able to scan and sort through candidates quickly and efficiently, making the avoidance of bias difficult.

The issue with this standardized form of sorting means some viable candidates who simply didn't have the same opportunities as others are dropped, thus decreasing the diversity of a group. To avoid this, anonymity is a great solution that can level the playing field by eliminating any characteristics that make one identifiable. This brings us to blockchain-based solutions.

Blockchain uses distributed ledger technology to increase the value of information by allowing for a secure and transparent exchange of information. This also eliminates the possibility of tampering with said information and works on a trusted consensus where all users need authorization and make exclusively valid changes or additions to the content.

Blockchain technologies have mostly been used in capital markets but their usage is taking a turn towards human resources. The trust-based protocol eliminates the need for a third-party mediator, instead focusing on being an open-source and reliable method for maintaining transactions and data that is impossible to delete or alter.

The reason blockchain is so beneficial for hiring is that the integrity of the data goes unaltered throughout the whole hiring process and on. This means all employment history, credentials, and so on remain untouched.

The frequency of lying on resumes has increased in the past few years, making blockchain a viable option for companies who seek accurate records while also working towards increasing diversity accurately and efficiently.

The decentralization and anonymity of blockchain create an inclusive environment for decisions to be made, increasing the variations in the process. It can be said it creates more opportunities for less homogenous groups to get hired at a company solely based on their credentials and achievements.


Though blockchain isn't the perfect solution for everyone, the increased use of this method will increase the amount of information and accuracy, rendering it a useful tool for increasing diversity and eliminating hiring bias in the human resources sector.

Continue Learning