What I’ve immediately noticed is that web3 caters to a new way of working, a creator economy, and fundamentally shifts the employee-employer relationship. Ben Schecter of a16z summarized one framework for understanding the options for the future of work in the world of web3 as, “The traditional way to make money was ‘work-to-earn,’ but the future of income is ‘x-to-earn’ — play to earn, learn to earn, create to learn, and work to earn.”

DAOs create transparency between organizers and contributors

These new ways of earning are enabled through Decentralized Autonomous Organizations (DAOs) as opposed to traditional corporations and management structures. DAOs are member-owned and self-governed through smart contracts with no central authority, bringing together like-minded individuals to grow a project or initiative. Members are rewarded for participation, contributions, bounty programs, or finding other ways of adding value, and, in some instances, commit full time to working for a DAO. In practice though, not all DAOs are decentralized or autonomous. So, it is best to think of DAOs as internet-based organizations that are collectively owned and controlled by its members who are governed by foundational principles/rules.

Although most DAOs are open to anyone who would like to join, not everyone contributes equally. Goiser, a contributor to BanklessDAO, says, “In a DAO, acquiring trust through work is important. DAOs are looking for reliable contributors that can work independently in a way that respects the collective will of the organization.” This is a fair exchange, contributors are rewarded for working on projects that make them happy, and the organization reduces its development time and overhead by maintaining a leaner internal team. This concept of a company allowing external entities to grow its ecosystem by sharing proprietary information (code) publicly isn’t novel, and is most commonly referenced as open-sourcing, but the web3 approach upholds the open-source values of collaboration, transparency, and community-oriented development creating more utility in the world. What’s compelling is that web3 expands the gig economy to technology development (a person can drive for both Uber and Lyft concurrently, just like a developer in web3 can contribute to Company A and Company B), however, for DAOs to scale effectively and run efficiently they still require full time members.

Web3 better predicts on the job performance

Traditional companies invest large amounts of resources into structured hiring frameworks that aim to extract the right data and evidence to make sound hiring decisions, hit hiring targets and ideally predict on-the-job performance. Growth By Design Talent simplifies the concept of structured hiring in its most basic form, Requirements -> Assessment -> Decision. This approach forges internal alignment but also creates a better experience for candidates who are evaluating whether they align with the role’s responsibilities, goals and culture of the company. It’s a mutual assessment, with companies and candidates alike, relying on information furnished by the other party (resumes, Linkedin profiles, interviewers, career pages, talent brands, etc.), which aim to represent themselves in the best light possible. Neither party has first hand experience to rely upon.

It’s no coincidence that referrals are the least risky source of hire (outside of maybe boomerangs), because in most cases the referral is a known quantity to the referrer with first or second hand accounts of their on-the-job performance. There can be a higher confidence in the information’s trustworthiness because you trust the source (typically an employee), yet this doesn’t mean the information should be taken at face value. Referrals still need to be vetted just like candidates from any other source, and it’s why the assessment phase of structured hiring is so important in determining what is truthful. It’s the reputational facade both sides put up that needs to be addressed, and this is where the concept of trustless interactions in web3 turns traditional hiring on its head.

In web3 an individual’s resume is immutable, because all your contributions live on the blockchain. A DAO is by design open and transparent where anything about it can be publicly audited. Therefore, anyone can verify or research its code, decisions, culture, or core contributors and members. An individual builds their resume through community involvement and contributions to projects across the web3 ecosystem, which becomes advantageous in that they also gain insight into the cultures and values of the DAOs that represent those projects. Thus a new pool of viable candidates has emerged.

For a DAO looking to make a full time hire, it will in most cases look to its community first, where it can verify the quality of committed work through first-hand working knowledge, and better predict on-the-job performance. Additionally, a DAO can research an individual’s contributions across the whole web3 ecosystem to validate their knowledge and overall contributions. However, this doesn’t replace the need for an interview process to ensure mutual alignment in other areas such as culture, scope of the role, employment terms, etc., but the data and evidence hiring decisions are staked upon become far more trustworthy. There’s no misrepresentation in web3.

“Try before you buy” hiring in web3

Gone are the days where a hiring decision feels like an educated leap of faith where you only get to experience what’s behind the curtain when you mutually commit to employment. Born in tech is the decades old commerce trend of “try before you buy” employment. Companies and contributors experience what it would be like to work with one another, before committing long term.

Hiring is going to continue to evolve like it has over the past decades. It will be influenced by new generations, the future of work and new industries. DAOs will become more mainstream; flexibility and the idea of working across multiple projects may become more attractive to top talent; and remuneration will be tokens, NFTs, digital, fiat, or enhanced reputation (influencers). The concept of “try before you buy” hiring is speculative but a choice, and there are many issues such as health insurance, tax implications, financial risk and the applicability beyond developers to name a few, that still need to be addressed - which doesn’t make this approach appealing for everyone today.

What this does is offer a future of hiring where we can take the best parts of structured hiring and combine them with the trustlessness of web3 to create a hiring ecosystem in which the individual can experience what it’s like to work for an organization, and an organization can experience the on-the-job performance of an individual. Thus, creating a more aligned, engaged, and productive hiring experience fostering a more enjoyable working relationship.

Appendix:

Ethereum.org, What are DAOs? 

Future, Ben Schecter,  The future of work is not Corporate - It’s DAOs and Crypto Networks

BanklessDAO, Working for a DAO

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