4 Reasons Why Decentralized Hiring is Inevitable

4 Reasons Why Decentralized Hiring is Inevitable

As a collective race, work has been and remains one of humanity’s fundamental pillars of support. It is through work that we have accomplished so much development in science and it is through work that we might become a multi-planetary species or go beyond our natural limitations.

More interesting is that all these, beyond work, are a byproduct of collaboration. This might come off as counter-intuitive in a society based on individualism, but we’re slowly shifting towards becoming a collective in which collaboration is decentralized and open for all.

At HYVE, we believe that the only way to achieve this is through the use of blockchain technology.

Since we know how important facts are, we made a list of reasons explaining why it’s inevitable for the workforce to become decentralized.

Uniformity & Stability (1)

In a global economy, large corporations have branches all over the world, and the main reason for that, besides having a local presence, is economic.

The median salary range for a software developer in Berlin is $54,500 / year, whereas in Bucharest the same job yields about $27,000 / year, and in Los Angeles around $100,000 / year. Same job, same experience, same responsibilities, different locations. Keep in mind these are neither the lowest nor highest averages around the world, the difference between extremes can be appalling.

This happens even within the same company. Say, Bob, Alice & Mark are software developers at IBM, one in Europe, one in the US, and one in Asia. They will all have different salaries and the margin can be quite substantial depending on the company.

Currently, this is not only a normal occurrence, rather it has become the norm. Partly, because of the difference in living costs which give companies an excuse to pay differential salaries.

The Decentralized Workforce

A good thing about changing the hiring paradigm is the long-lasting circumstantial and socioeconomic effects this change will bring.

When all the companies in the world have access to a global pool of talent, their options become better, giving them a larger chance of finding an appropriately skilled worker for the job at hand.

The reverse effect is that everyone has access to this skilled workforce, therefore competition grows and no company can afford low-balling employees on salaries as a result of their location.

After everything is said and done, the result is a global decentralized workforce where salary uniformity and economic stability are a given. The effect goes as far as establishing the basis of a truly global economy.

When the disparity between salaries around the world diminishes, the result is the entire global economy becomes uniform, from real estate to consumables. Since wages and taxes are the backbones of our economy, any effect on them directly influences the economy.

Hiring Biases (2)

The environment in which we grow shapes a part of our personality, resulting in specific traits, stereotypes, and biases.

“Canadians love hockey and they’re nice to people.” — The Internet

“Mexicans are stealing our jobs ” — Trump

Some are more decent than others, but biases are present everywhere, from political campaigns to hiring people. While we don’t know what causes political biases, a large majority of hiring biases are caused by an overload of subjective information about candidates.

By subjective information, we mean things such as age, sex, color, or political views. All of these are independent of performance and skill, yet they get taken into account almost every time. Some might argue that a couple of these variables can influence an employee’s personality and therefore his performance. This, however, is just one of many excuses we pull out of the hat to rationalize our galvanizing actions.

For a long time now we’ve been trying to solve the effect (biases) and not the cause (overload of information) by trying to educate people into being more tolerant.

Leaving jokes aside, biases are a normal occurrence simply because humans are emotional beings, and therefore subjective. The easiest solution is then to only meaningful show information.

On blockchain, you can see someone’s work history, reviews, and performance but you cannot know the location, age, gender, or anything personal about the candidate, leading to a more objective and skill-centered hiring process.

Naturally, every candidate has the option to customize his or her profile as seen fit. The problem is, currently, this choice does not even exist.

Lower Unemployment Rates (3)

Companies are short on staff and people can’t find jobs. That sounds quite ironic but it’s become a reality. Say any one company has a specific sphere of activity and anyone potential candidate has a specific sphere of skills. For a hiring process to be successful the minimum requirement is for those two spheres to intersect each other.

Yet that’s harder than it sounds when you take into account all the other variables. We’ve already discussed location, from an employee’s perspective in terms of salary differences. Let’s see what the situation is like from a company’s perspective.

For a traditional for-profit organization, expanding internationally incurs extremely large costs, and the biggest percentage of that cost is taken up by new hires, or to be more precise, by the hiring process itself.

Decentralization and blockchain specifically allow for a lower entry point in building a global company.

The cost of making new hires goes down drastically by eliminating the middleman, making expansion much easier. (Sorry Adecco)

When hiring costs are reduced, this gives the company more leeway to increase a potential employee’s salary. The interaction is peer-to-peer and safe for both parties so that even if the first hire didn’t turn out too well, the company is safe and can just continue the process.

Impartial Disputes (4)

One of the big reasons freelancing never caught on was due to the many issues that kept arising on freelancing platforms like Upwork (we talked about this before, check it out).

The problem lies not in the disputes themselves, rather it lies in the way they are resolved, which in many cases boils down to not being resolved at all.

In the 1990s when eBay was facing similar issues, they created the user dispute resolution which eventually became the eBay community court, the first attempt at a crowdsourced online dispute resolution system. (Check out this awesome article from Kleros on the topic).

With blockchain technology, you can implement decentralized dispute resolution layers on top of your application, such as Kleros, which is exactly what HYVE is doing.

In this particular case, the way it works is quite simple. User A escalates a dispute with user B to court and he provides the accompanying evidence. A team of appropriately prepared jurors is then assigned to the dispute, depending on the particular domain. The jurors look at the evidence and cast their votes.

In the case of an unfavorable ruling, user A still has the option of paying a premium and escalating the dispute further down the line, and since jurors are incentivized to make the correct decision it ensures that the system cannot be gamed nor influenced by biases and subjectivity.

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