Four Reasons to Be Excited About Blockchain
If you keep up with HR technology, then you already know everyone is talking about blockchain.
It’s one of the hottest topics across most industries today—and human resources is no exception.
Like job boards in the early 2000s and data analytics a few years back, blockchain has the potential to be the latest disruptor in the HR industry.
Sure, some of it is speculation. Not every application of blockchain technology is available today.
But there’s no question that HR leaders are already beginning to see blockchain evolve in key areas of their business like payroll, recruitment and records management.
So, if you’re reading this and don’t know what blockchain is or how it’s going to impact your business, strap in because I’m sharing four reasons everyone in HR should be excited about this new technology.
But first, let’s answer the most basic question:
What is blockchain?
Blockchain is a tool originally designed to facilitate transactions for cryptocurrencies—most notably, Bitcoin. In theory, blockchain seems confusing. But it’s actually quite simple. And that’s because there are plenty of other uses for the technology outside of cryptocurrencies.
In its simplest form, a blockchain is a string of records.
Picture it like that little security window between you and a bank teller.
You have a $50 bill you want to deposit into your account, so you place it in that little glass box and close the window on your side. Now, objectively, anyone—you, the teller, the bank manager, even other customers—can validate that there is, in fact, $50 sitting in that glass box. It’s that confirmation that allows the teller to open up their end of the glass box and take the $50 out.
See? Pretty simple, right?
Now, picture there are multiple other transactions happening in their own respective glass boxes all around you at the exact same time. And the “bank” confirms each one in the same way: by the collective agreement that there is actually the item of value — whether it be money or in the case of blockchain in HR, something as simple as a CV — in the “glass box.” It’s this string of records that acts as a ledger of information with the ability to transform your HR department.
Here are four reasons you should be excited about that transformation.
1. Managing Payroll Will Become Much Easier
One of the biggest headaches for any HR department can be managing their payroll. And with the growing distributed workforce, it’s becoming more challenging by the day. We all know the pain of volatile exchange rates and the slow processing of payments — which ultimately can lead to a pretty poor employee experience.
But, the good news is that blockchain has the ability to make the payroll process a whole lot easier.
“In a world where time is money, blockchain payroll solutions could mitigate the costs of cross-border payroll by reducing the fees for employers and the wait time for employees. Blockchain’s structure ensures security through a decentralized ledger, can provide payment to employees in real time, and can manage shifting currencies as a result of cryptocurrency.”
In other words: blockchain technology could allow HR teams to create their own currency to speed up transactions and dodge the costs of cross-border payments. Employees would be able to convert the created currency into real currency.
Companies like Bitwage, who focus on blockchain-based payroll, are already making waves in the HR industry. Bitwage allows workers to use 25 different currencies and promises to deliver their wages within 48 hours.
Global payments won’t be the only thing getting easier, though. 20 percent to 30 percent of the workforce are contract workers today. And blockchain will positively impact them as well by allowing for immediate payments. That means contract workers can eliminate their dependency on third-party payday lenders, while also giving them flexibility and the ability to better manage their money.
On top of all that, blockchain allows you to track financial transactions, manage tax liabilities, and eliminate the need for third-party reconciliation.
But, as I said before, blockchain isn’t just about money anymore …
2. You Can Accurately Verify and Store Candidate Data
At some point in your HR career, you’ve gone through the laborious process of verifying a candidate’s qualifications. You’ve done the reference checks, collected transcripts, and verified employment history. Well, blockchain will soon be able to help you with all those tedious tasks, too.
“A blockchain-centric verification process could allow employers to develop databases of comprehensive employee profiles that compile authenticated data related to their work history. This system could significantly cut down the time it takes to select fit candidates for an open position. Assessments would be made based on the skills a candidate has been verified to have, not just the skills they chose to highlight in their resume, thus eliminating the need for extensive skill checks during the interview stage. Instead, talent professionals can focus their efforts on the critical factors of evaluation during hiring, such as assessing for cultural fit and goals alignment, ultimately saving time and money.”
So, blockchain will verify information and give you more time to focus on other areas of your job.
Sounds like a win-win.
And, by analyzing all the stored data, blockchain will help you match candidates to roles more effectively. Also, information stored in blockchain cannot be changed. So, companies no longer have to invest time or money in third-party verification agencies.
But blockchain in HR doesn’t stop at recruitment — it can also help with your employee experience.
3. You Can Enhance Your Employee Experience
As you now know, blockchain can store all of your candidate information. But blockchain also captures every change in an employee’s experience.
Take a look at this breakdown from Elizebeth Varghese:
“Records like this make it easier for leadership to understand an employee’s skills and career goals. As a result, they’ll be better equipped to provide them with opportunities to enhance their career. Additionally, the use of smart contracts offers your employees easier access to accurate information, making for a better overall employee experience.”
But more accessibility doesn’t necessarily mean less security. In fact, one of the best uses for blockchain in HR has to do with better data privacy for your employees.
4. You Can Keep All Your Data Secure
As an HR department, you’re privy to a variety of financial transactions and sensitive personal information. And in today’s world, unsecure storage systems are prone to a cyber attack that can lead to identity theft and fraud. But, with the emergence of blockchain in HR, your information is much more secure. Because blockchain is decentralized, there is no single point of failure. So, data cannot be changed from a single computer. In addition, all network participants have their own security keys. So, if a record is altered, that key becomes invalid and the system notifies the peer network.
Ultimately, the security around blockchain keeps your employees’ sensitive information safe from theft and fraud.
Some Good Advice
Blockchain in HR is the next big thing. And while it may not be ready to fully implement right now, it’s important to prepare yourself for the future.
“Are there risks in the early adoption of any technology? Yes. But the risks of not investigating, and investing, in blockchain could be even more dangerous. Some good advice for HR departments internationally, is to start the discovery journey now, or struggle to play catch up later. To actually capture the competitive advantages, will take turning early prototypes into more mature proofs of concept — and moving on from there … blockchain technology seems to be here to stay.”
So, sit down with your HR/talent acquisition team and discuss your ideas around implementing blockchain technology in the future. If your team isn’t up to speed on the technology, use this information to educate them. Because blockchain is coming to HR and recruiting.
And it’s time to get excited.