[Web3 for HR] Why and how to create skills NFTs for HR use?
In early June 2022, LVMH group employees announced on Linkedin the creation of their first skills certification NFTs, as part of an experiment. This is one of the first use cases made public in this area. When the first capitalization of the CAC 40 (300+ billion €) starts to move on a subject, we can tell ourselves that something is happening. Immersed in a promising case study for the HR function, which Tomorrow Theory is proud to have accompanied.
Skills NFTs for HR: Anything New?
In 2019, Cointribune predicted the use of the blockchain for HR uses, and in particular the certification of skills thanks to NFTs. At the time, three startups were presented in connection with the subject (Talao, Talent Coin, HireMatch). Three years later, looking at the offer of these three players, it is clear that the market has made life difficult for them, since they have all pivoted in their activities.
Even today, very few companies are able to use a blockchain, either in their core business or in the processes of their HR function. If you’re hoping to increase your chances of getting hired with an NFT CV in 2022, I suggest you keep a hard copy or pdf, as it’ll be infinitely more helpful in finding a job!
But just because an innovation comes too early doesn’t mean it’s irrelevant. Especially since the blockchain offers very interesting advantages for the certification of skills or training. Thanks to the blockchain, it is possible to have elements whose authenticity, rarity and traceability are made public and deemed unfalsifiable. Above all, it is possible for any actor to create such elements.
To be very clear, if a skill NFT is created and issued by a person or organization whose credibility in the market is not sufficient, no NFT in the world will restore that credibility. On the other hand, it is possible to create interesting economic logic thanks to the decentralization enabled by the blockchain.
Why Create Skills NFTs?
When a company or organization decides to issue skills NFTs, then it can no longer be said that it is just anyone. The value of the NFT then becomes directly linked to the credibility of that organization. In terms of recognition, this opens up the field of possibilities. Today, only the State and educational establishments have the capacity to issue titles of recognition, whether certificates or diplomas.
But the economy is changing faster than the ability of schools to change their programs. In recent years, companies have emerged to play the role of high-speed schools. In a few weeks, they are able to prepare people for a given profession, for example in sales or in IT development. Far from being simple originals, these actors foreshadow a new economy, where the recognition of skills no longer corresponds to the pattern of long and academic education.
In just a few years, most skills certificates and diplomas will be hosted and consulted on blockchains, for the qualities mentioned above. These certificates will have various and varied origins, but it will be possible to check them at a glance to form an opinion on their credibility. Over time, there will probably even be credibility indices or notoriety scores.
As a recruiter, you will therefore soon be able to see the profile of a candidate in the blockchain, thanks to his NFT CV. This NFT CV will be made up of several NFT skills, from schools and organizations that have marked the path of this candidate. While on a CV you only have what is written to give you an opinion, with the blockchain you will have valuable metadata to increase your level of confidence in the validity of the information.
I don’t think these certificates will completely replace the value of a diploma in France in the coming decade, at least not for all professions. This should nevertheless be the case for certain unregulated high-tension professions (developers, data scientists, etc.). The more schools and organizations that play the game, the more relevant this market will be. To the point that in a few years, you will wonder how we did it before…
To go further, we can also cite the example of VAE, or Validation of Acquired skills through Experience. This French system allows experienced and self-taught professionals to have their skills recognized thanks to a title validated by the State. In a skills economy, not only would this practice be normal and encouraged, but above all, it would no longer be based solely on validation by the State.
If tomorrow, a candidate has all his skills and recognitions in the form of a profile in the blockchain, then it will become possible for recruiters to automate prequalification on a very large scale. Thanks to algorithms, it will be possible to check the credibility of each skill, then to match these skills with the positions to be filled. In just a few seconds, thousands of profiles can be reviewed AND verified, to identify the 5 to 10 most relevant profiles for the position.
Of course, this will imply that the offer is well defined, and not just a copy-paste of an old need. But if this offer itself is an NFT composed of several sub-NFTs of skills, then we arrive in a real economy of skills, playing legos to build a position and identify the best candidates. A healthy system will open to the greatest diversity, rather than strictly closing. This implies that skill NFTs will be linked by a form of intelligent relational database, called skill ontology. Good to know, it’s already a topic today :)
How do I create Skills NFTs for HR?
To create skill NFTs, there are several prerequisites, and above all, it is important to have a vision of what they will allow in the future. As mentioned, each skill NFT is of little interest if it is alone. On the other hand, aggregated with the other skills and recognitions for a person, we can then create a completely secure and credible profile in the blockchain.
To create skill NFTs, you must first choose the blockchain on which you want to evolve. The more mainstream the blockchain, the more interest there will be. Indeed, you would not like a CV to be read by only a tiny fraction of recruiters, for lack of a format that no one uses. Ditto for the blockchain.
We recommend blockchains like Polygon or Tezos, which, in addition to being scalable and widely used, allow transactions to be optimized, to be 500,000 times less energy consuming than the Ethereum blockchain. The environmental argument cannot be ignored when talking about building a new economy on a national or global scale.
Once the blockchain has been chosen, a blockchain address must be created to represent the certifying organization. This address will prove the origin of the skills NFTs that you issue, so make sure that it is specific to the organization, and not to a person. In a while, when the market has evolved, you will be able to certify in public registers that your organization uses this address to issue skills NFTs, which will gradually make the entire market more reliable.
From this address, you can create the smart contract(s) that will allow you to carry the skills NFTs. In these smart contracts, it will then be necessary to create metadata fields. One thinks of course of the name of the skill or training, the identity of the certifying body, the initials or the name of the learners, but also the date of certification, and especially the period of validity. This duration is used to define the date of obsolescence of the skill, which is critical to avoid creating an NFT graveyard of obsolete skills in the medium term.
It is not necessary to put the full name of the learner. On the one hand because it becomes personal data subject to the GDPR, but above all because each NFT is linked to an address without the possibility of transferability, which removes the need to display a name on the NFT itself. The NFT will have been sent to the address of the person concerned, period.
From the smart contract, you can now define the list of persons concerned by the NFTs to be delivered. This is called whitelisting, or whitelisting. In fact, you can either send NFTs directly to relevant addresses if you have them, or create a process that prompts people to claim their NFTs when they are eligible.
In the second case, this is what you have chosen to do for LVMH, in particular in order to simplify the user experience. Very few employees have a blockchain address at the moment. It is possible to create a simple interface that allows users to connect by email, to securely and transparently create a blockchain address, communicating with the certification system. Creating and transferring skill NFTs to these addresses becomes child’s play!
This implementation suggestion can be adapted widely depending on the specifics. It has the merit of showing step by step how it is possible to go about initiating a skills economy at the scale of an organization. Again, in a few years, all these steps will be transparent, and you will be able to set up smart contracts yourself like you fill out a Google Forms. In fact, at Tomorrow Theory, we have already implemented this innovation, the demo will come soon…
To come back to the specifics related to the subject of skill NFTs, there are several use cases that are well known to training and HR professionals, and they should be clearly distinguished:
- Current or future skills NFTs. Today, a school or a company is able to certify that you have mastered a particular skill. No difficulty in this use case, except to ensure that the skills validation process is reliable enough to be credible. Thus, from now on, it will be possible to register all your future skills and training in the blockchain.
- Skill NFTs from past experiences or trainings. 5, 10 or 20 years ago, you developed extensive expertise on such and such a subject. But how do you recognize them? No need to blame the blockchain for this problem, it would arise even without it. The solution is therefore to find an acceptable solution in the real world, before converting it to the blockchain. In other words: who could credibly attest to the reality of these skills? In the near future, there will probably be organizations that can certify the credibility of a skill developed in a less traceable past than today.
- NFTs of skills developed in the private life. As for the previous use case, it will be a question of proving the validity of the skill in question. For this to be credible, the organization issuing the NFT must be credible. So same subject, I think that dedicated organizations will be created. Could be an interesting growth driver for schools and universities?
The example of HR Data Ambassadors at LVMH
To take the recent example proposed by the LVMH Group’s Digital HR department, it is more specifically a recognition NFT to the community of the Group’s Digital HR ambassadors, following a training seminar lasting several days. Each participant was given an NFT attesting to their membership in the group’s internal community. The NFT is valid for two years, nominative and non-transferable.
Tomorrow Theory was LVMH’s technical partner for this experiment, in coordination with internal teams, and made it possible to develop an intuitive web 3 platform for employees. On a platform in the colors of LVMH, employees fill in their email. If this email is one of the authorized emails, a crypto-asset portfolio is created automatically. The system is automatically informed of this creation, and transmits the HR NFT to the wallet. From this moment, the HR NFT is linked for life to the employee’s portfolio. At the end of the two years of validity, the NFT will display the information ‘expired’ but will not be deleted.
So that the employee can keep control of his wallet, he can export the private key to a common wallet manager, such as Metamask or Trustwallet. This innovation of use that is the intuitive web 3 interface shows that it is possible to embark employees very easily towards blockchain uses, without depriving them of the benefits of the latter.
This badge is a simple experiment for the LVMH group, whose blockchain strategy seems extremely advanced. The internal expertise on the subject is already very strong, and it’s a safe bet that we will quickly hear about blockchain innovations at LVMH in the months and years to come.
Towards the skills economy
There are more and more solutions around the world aimed at having skills recognized through blockchain. Last year, I told you about Braintrust in the United States, which now has several million users. Braintrust connects freelancers and companies through secure blockchain transactions. Moreover, the Braintrust network itself is governed by the freelancers active on the platform. A real web 3 initiative that goes beyond the HR framework, to become part of the skills economy.
A little further, in Estonia, TrustRecruit is a solution that offers a marketplace populated by CVs in the form of NFTs. The NFT CV describes the candidate’s skills, experiences, career goals and passion. Based on their preferences, their NFT CV is highlighted on the NFT CV Marketplace, where the AI matching engine matches the NFT CV to relevant job postings. On the other hand, employers and recruiters have the option to view CV details after paying the required fee. The fees collected are transferred to the owner of the NFT, which gives more power to the people who share their verified data.
Much closer to home, in France, Jacques Froissant’s recruitment firm Altaide offered a wonderful April Fool’s Day with the announcement of its Altaverse, a web 3 environment to connect candidates and recruiters. As with TrustRecruit, Altaverse would offer NFT CVs for candidates. The initiative goes even further, since it would offer job offers in the form of NFTs as well. Even though the Altaverse doesn’t actually exist yet, it’s a logical evolution in the market, and I bet it will be the norm in a few years.
And you, where are you in web 3 for HR?
Tomorrow Theory is our agency in valuing human capital through science and technology. We already support many companies like LVMH in the integration of web 3 uses within the HR function. Here are 10 real-world use cases we’re working on right now:
- NFT Skills Certification
- Creation of crypto-asset portfolios for employees
- Pedagogical engineering in virtual environment and metaverse
- Creation of employer brand experiences in the metaverse
- Creation of soft skills development platforms with automated recognition in the blockchain
- Conferences and training on web 3 and the metaverse
- COMEX awareness of web 3 and the metaverse
- Implementation of private blockchains for companies
- Help in identifying web 3 HR use cases
- Development of internal web 3 communities
I hope you enjoyed this new article. I will continue to develop use cases, to allow as many people as possible to appropriate them. Do not hesitate to contact me to discuss it, because the world moves fast, and tomorrow is not far away. Indeed, tomorrow is only a day away…
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