Are Digital Wallets the Future of Hiring?
Virtual wallets that store career credentials promise benefits for recruiters and job candidates.
Ask users of the popular digital wallets from Apple or Google what they like most about the technology and they’re apt to mention convenience or security. Digital wallets allow users to abandon traditional physical items, such as credit or debit cards, driver’s licenses, employee badges, plane tickets, and transit cards, in favor of virtual versions they can store on their phones.
The wallets, which mushroomed in popularity during the pandemic in part because they allow touchless payments, offer ease of use and assurances about security by encrypting sensitive data.
Now, the digital wallet concept has come to HR as more industry vendors introduce or develop products designed to reinvent how job candidates are vetted and to give individuals more control over how their career credentials and personal data are accessed or shared.
The wallets work by enabling job candidates to consolidate and pre-verify credentials such as university degrees, employment histories, licenses, certifications, talent assessments, badges or work samples in one immutable digital block, or wallet. Many, but not all, digital wallets are based on blockchain technology, a digital ledger of transactions maintained on computer networks that makes it difficult for the information to be altered or hacked.
When recruiters are hiring for jobs and request a candidate’s credentials, applicants who have created digital wallets essentially give recruiters a digital “key” to unlock and view their wallet on a network. The candidates’ credentials are pre-verified and issued to the wallet by sources such as a university or former employer.
Digital wallets save recruiters time by giving them the ability to review pre-verified, consolidated candidate credentials in one place. This translates to a considerable advantage in a job market where applicants remain scarce for many roles and the ability to move quickly to hire talent before competitors can is paramount.
Experts say digital wallets also can provide benefits for job candidates and employees. The technology is designed to give individuals more control over how their personal data, including career credentials, is accessed, used and shared, a concept known as self-sovereign identity.
Digital Wallet Trailblazers
One of the pioneers in the use of digital wallets for recruiting is the Velocity Network Foundation (VNF), a nonprofit membership organization created in 2019 with the goal of reinventing how career credentials are shared across the global employment market. The VNF is a public, user-owned entity with founding members that include HR technology vendors Cisive, Cornerstone, Korn Ferry, Oracle, Randstad, SAP and UKG.
Dror Gurevich, CEO of the VNF, says one of the foundation’s chief objectives is to unburden recruiters from having to rely primarily on resumes and self-reported online profiles to vet job candidates.
“Hiring people based only on what they say about their own education, skills and work histories is inefficient and creates unneeded friction in the job market,” Gurevich says. “Self-reported credentials can be unreliable, nonstandardized and subject to fraud.”
The use of pre-verified career credentials on blockchain networks eliminates those problems, according to Gurevich. “The typical vetting process of candidates requires a lot of processing and verifying of various credentials, no matter how much AI or machine learning is used,” he says. “Career credentials usually aren’t available in a digital, pre-verified, consolidated format, which is one of the problems we solve for.”
The VNF issues digital credentials to candidates from primary-source authorities such as universities, former employers and licensing organizations. Candidates install the VNF’s digital wallet app on their phones, giving them a secure and private way to manage their professional profiles and share them with third parties.
Real-world applications of digital wallets built on the VNF’s infrastructure continue to grow. Cisive, for example, recently became one of the first background-screening providers with the ability to inspect verifiable digital credentials on behalf of its clients and job candidates as part of the VNF.
Increased Funding and Awareness
Another sign of growing interest in digital wallets is recent government funding designed to support the concept. In 2022, six states announced they’ll provide funding to accelerate the use of digital career credentials. That funding is part of a broader initiative to promote skills-based hiring practices and create new pathways for underemployed and unemployed skilled workers.
A handful of HR technology vendors also either have rolled out digital wallets or have products in development, including InfoMart, Sterling and SkillSurvey, which was recently purchased by iCIMS. InfoMart, for example, has a career wallet that’s gaining traction in the health care industry. Hospital recruiters use wallets to verify nurses’ and nursing students’ credentials when considering hiring them.
Tammy Cohen, founder and chief visionary officer for InfoMart, says digital wallets can save recruiters time and create new efficiencies in the candidate-screening process.
“It can be difficult, for example, to go into large databases and check whether a certain nurse has been licensed or whether that license has expired, which is important because nurses can’t work without one,” Cohen says. “But if a nurse is holding that information in a digital wallet, it’s much easier to quickly share it back with a recruiter and speed the process.”
HR technology analysts say that while awareness of digital wallets is growing and more products are on the market, adoption of the technology remains relatively low. “Digital wallets have significant potential to drive new efficiencies in hiring and onboarding processes,” says Hiten Sheth, a director analyst with research and advisory firm Gartner. “But it’s still early days, and we’ve yet to see the technology go fully mainstream.”
According to Gartner’s Hype Cycle, a methodology designed to separate the hype of new technologies from what’s commercially viable, digital identity and underlying blockchain technologies are still in a “nascent” stage. “While more real-world use cases are emerging, the standardization model and frameworks of interoperability are still maturing,” Sheth says.
Background-screening provider Sterling is partnering with ID.me, a digital identity network, to develop its own digital wallet. Taylor Liggett, general manager of Sterling’s Identity division, compared the benefits of digital wallets for job candidates to those for travelers who use the Transportation Security Administration’s (TSA’s) PreCheck process at the airport.
“Every time you go to the airport once you’ve completed TSA PreCheck, everything is expedited,” Liggett says. “It’s similar with using digital wallets to apply for jobs. For example, currently job candidates have to have credentials like college degrees reverified every time they apply for a new job. But using a digital wallet means that reverification isn’t necessary, and candidates also don’t have to re-enter all of their information on job boards or career sites each time they apply for a new job. With pre-verified credentials, all they have to do is give consent to share their wallet with a potential employer.”
The Self-Sovereign Identity Movement
Another factor driving the use of digital wallets is a movement toward creating self-sovereign identity for job candidates and employees. The initiative is designed to give individuals more control over how their personal data can be accessed, used or shared by others. Historically, large identity providers such as Google and Facebook, data brokers, and others have possessed or been granted control of that identity information. But growing concerns about data privacy and the harvesting and reselling of individuals’ information for marketing purposes has led to a push for a self-sovereign identity model.
One organization that was created to give employees more control over their own data is Certree, a San Mateo, Calif.-based data privacy and document authenticity company. Certree provides individuals with their own personal, encrypted “vault” in which to store their career credentials while also ensuring those credentials are authentic and verifiable by third parties, says Pavan Kochar, the company’s co-founder and CEO.
Certree works with client organizations to encrypt their employees’ information on its platform, allowing workers to first review their credentials for accuracy before sharing the information with any third party seeking to verify it. Using Certree means employers no longer engage in such practices as sending workers’ income information to large data brokers every pay cycle without workers’ consent; instead, employees have complete sovereignty over their own data.
Kochar believes the self-sovereign identity concept will continue to gain momentum.
“It’s only you as the employee who can share your information with whomever you deem appropriate,” she says. “If you look at legislation such as the recent expansion of the California Consumer Privacy Act in January, which now covers employees and job applicants as well as consumers under data privacy law, there’s a trend toward giving employees greater right to know how their information is used and where it’s being sent so they have more rights to opt out.”
The Rise of Digital Identity Verification
Another emerging technology related to digital wallets is digital identity verification, a process used during the background screening of job candidates. The technology has become more popular amid the rise of remote work, a model that has contributed to the growth of identity theft and fraud, requiring more reliable and efficient ways to verify a job candidate’s identity.
One problem with identity verification is that accidental errors—such as manually entering the wrong date of birth for a job candidate—can go undetected and lead to erroneous background check results. But a second, more malevolent issue is fraud, or job candidates not being who they say they are.
Cohen notes that the incidence of bait-and-switch interviewing has been on the rise amid remote work, particularly in the information technology field.
“A job candidate will send their credentials in, will interview very well in a virtual format, but when it comes time to show up for work on day one, you find it’s a different person than who you interviewed,” she says.
Factors particular to new ways of working during and after the pandemic are causing a need for improved identity verification of job candidates, according to Blake Hall, founder and CEO of ID.me.
“Frequent data breaches also have given more bad actors access to Social Security numbers and dates of birth that can allow for easier identity theft,” he says.
Sterling is one background-screening provider that has created a digital identity verification solution to help address the problem, partnering with ID.me in the effort. The process enables companies to verify a candidate’s identity in multiple ways before beginning a background check, including verifying that a SIM card in the candidate’s mobile device is associated with their identity, scanning and verifying document images to confirm the candidate’s authenticity, and matching government ID documents to a candidate’s image through facial recognition.
“Identity verification has become more important as part of background checks today,” says Evelyn McMullen, a research manager specializing in talent acquisition with Nucleus Research in Boston. “But it’s also important those conducting digital identity verification do it in a candidate-friendly way. You don’t want to make the application process any more cumbersome for candidates, since many have a lot of options in the current job market.”
Dave Zielinski is a freelance business journalist in Minneapolis.
Illustration by Michael Korfhage for HR Magazine.
The Benefits of Digital Reference Checking
Advertisement
An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.
Advertisement