Stopping the Job-Pocalypse: How Digital Job Credentials can Benefit Hiring
Getting job seekers into the right roles and incentivizing residents to develop skills both have huge implications for a region's economic productivity and residents' happiness. Online networking and application platforms have made hiring far more effective in the 21st century, but the use of artificial intelligence by job applicants threatens to undermine that progress.
Now, Verifiable Digital Credentials supporting Digital Learning and Employment Records, or LERs, are being used across the U.S. in hopes of rescuing the hiring process while making it easier than ever to reliably connect skilled workers with employers who need them. LERs are digital documents controlled by the holder and verifiable with an issuer’s cryptographic signature.
That means employers can trust that a diploma, certification, or past employment record is trustworthy without the shockingly laborious process of verifying it directly with the issuer — even when the credential is presented online. The possibilities for making hiring more efficient and effective are hard to overstate — but trustworthy credentials are bigger than that. Their adoption would make skills-based training courses more significant in the hiring process, incentivizing more lifelong learning and ultimately creating a more skilled workforce and vibrant economy.
A New Foundation for Digital Trust
Digital Education and Learning Credentials can now take the form of Verifiable Digital Credentials, or VDCs. VDCs are an innovation that uses cryptography to create trustworthy and non-duplicable digital documents whose source and authenticity are confirmed by cryptographic signatures that can be verified in person or online. VDC technology is already used to secure Mobile Driver's Licenses (mDL), which are being rapidly adopted in the United States.
These trustworthy digital documents are beginning to be used to record and verify educational and employment credentials, from one-off training workshops to certifications to advanced degrees. Systems using LERs to connect job seekers to employers are in the very early stages, but they’re being piloted in collaboration with employers and educators, such as by Alabama’s Credential Registry and the Colorado Workforce Development Council.
Fighting Credential Fraud
The first problem that LERs can help solve is one perhaps as old as civilization itself. As much as we would love to trust our fellow human beings, the fact is that job searchers, to put it politely, embellish credentials and experience at an alarming rate.
Depending on which study you read, anywhere from 25% to a shocking 70% of job applicants admit to lying on a resume. Surprisingly, according to a survey by ResumeLab, candidates with more credentials, like a Masters degree or a PhD, are significantly more likely to lie.
Actively rooting out such deceptions is unsustainably time-consuming – one medical firm surveyed for our Colorado project reported using 17 different systems to vet applicants. Advice for recruiters trying to detect fraud reflects the hopelessness of the situation, leaning heavily on nostrums like “trust your gut.”
Quite obviously, that’s not good enough. Hiring the wrong person is very costly, wasteful, and disruptive for any given firm - and it happens all the time, adding headwinds to entire economies.
The Recruiting AI-Pocalypse
The appearance of powerful “large language models” like ChatGPT in the past two years has added even more challenges to the job search and recruiting process. By making it easier to create materials like cover letters and resumes, LLMs have unleashed a flood of applications. According to recruiters and firms, as many as half of all job applicants are using AI for cover letters or other elements of their job materials.
The disjointed or odd output of many LLMs makes these AI applications relatively easy to detect (and reject) when a human reviews them. However, application spam is severely disrupting the work of recruiters seeking top-quality candidates and even increasing the risk of deceptive job applications since LLMs have a tendency to “hallucinate” data, even if an applicant had no intention to deceive.
“We’re definitely seeing higher volume and lower quality, which means it is harder to sift through [applications],” recruiting firm CEO Khyati Sundaram recently told the Financial Times. By making it even harder and slower to fill open roles, AI spam adds another drag on innovation, profits, and growth.
In some jurisdictions, AI can be used to screen and categorize applications (ironically helping to address the problem that it has created). In others, including the entire European Union, automating job application processing is tightly restricted.
However, under either circumstance, recruiters should aim to apply nuanced human judgment as often and carefully as possible. LERs help maximize human choice by making it much easier to confirm that the information an applicant submits is actually accurate.
How do Digital Credentials Work?
LERs and other Verifiable Digital Credentials are digital records with cryptographic “seals” that affirm their authenticity and prevent them from being copied or stolen. VDCs are stored and managed by digital wallet software similar to Apple Pay and can be presented over the internet, either sent as part of an application or integrated into a job marketplace.
For instance, a chef or server could attach a trustworthy food handler’s license as part of an application to a restaurant without the restaurant having to verify its validity separately. Digital credentials can also contain detailed information, such as an applicant’s performance in a course, making selecting between applicants easier than relying on self-reported claims. This combination of speed, reach, and trustworthiness means recruiters can reliably find the best applications without worrying if they’re misleading.
But LERs also stand to increase the quality of the talent pool itself over time, by making training more transparent and actionable. “What gets measured, gets managed” is a truism often attributed to management guru Peter Drucker, and it applies to individuals as much as organizations: a certification is more appealing to learners if it leads to a permanent, detailed, shareable record likely to have a real impact on their future.
Like many systems, LER adoption for job credentials has something of a chicken-and-egg problem: both credential issuance and credential acceptance have to be in place for either one to be effective. That’s a major reason states are leading the way: they’re in a position to push forward both sides of the market.
Building Better Job Markets
The path to fully implementing verifiable digital work and education credentials for job searchers may be a long one—coordinating educators, employers, and systems will be challenging. But LERs are based on existing open and interoperable technical standards, meaning there are already agreed-on “rails” for building them, and first movers won’t risk being left behind by future progress.
The trust created by better credentialing systems will help recruiters fight AI spam, put workers in the right jobs, and maximize the benefit of education. Early movers, such as the most innovative states, universities, and employers, stand to pull ahead of competitors who follow - both in shaping the future of these systems and in reaping their benefits.
If you’re interested in exploring the possibilities, please reach out: SpruceID is ready to help.
About SpruceID: SpruceID is building a future where users control their identity and data across all digital interactions.