Is Blockchain in HR's Future?
How the shared experience of transactions can empower human resources.
Blockchain. The much-hyped technology is the backbone of bitcoin, the cryptocurrency that's enjoyed massive market gains recently. For business leaders and human resource professionals the blockchain impact on HR seems minimal, at least so far.
But by separating the cryptocurrency from its underlying infrastructure, a new value emerges. Here's how the shared blockchain model might fundamentally change HR.
Before HR teams can leverage blockchain technology, it's critical to understand the basics. First, remember that blockchain isn't inherently tied to bitcoin or to any other cryptocurrency. Instead, blockchain is simply a way of looking at digital transactions. Typically, digital transactions are shared among extremely small groups, for example buyer and seller. The problem is that if transaction data is compromised, it's difficult to determine who altered the data and for what purpose.
Blockchain, meanwhile, exists as a shared ledger of transactions. This means that all parties must agree to transaction parameters and that this information is publicly available to all members of the blockchain. From there, information cannot be deleted or changed, only added. New "blocks" of data are added in sequence, meaning that any attempt to alter the existing chain will impact every block down the line. That's the true value of blockchain: secure, transparent and shared transactions that can't be duplicated or obfuscated.
The HR Impact
So what does this mean for your business? First, the blockchain impact on HR isn't just for enterprises, since blockchain transactions work as well for individuals as for large organizations just like the cloud, size is no barrier to adoption. Specifically, leveraging blockchain offers a number of benefits, including:
- Identity: In today's job market, it can be challenging for potential employers to authenticate a worker and their capabilities. Employment screening firm, HireRight, reported that 85% of employers responding to their 2017 benchmark survey said they had "uncovered a lie or misrepresentation on a candidate's resume or job application during the screening process." In this environment, qualified workers can have a difficult time standing out and proving their credentials. This is made even more difficult in the gig economy environment, where a worker may have gotten appropriate training and education, but in unorthodox and undocumented situations. In such cases, it can be difficult for the worker to carry forward their education and training, and benefit from it in finding other roles. A decentralized repository that would allow authenticated sharing of credentials would go a long way toward solving this problem.
- Payroll: According to Deloitte, blockchain could help simplify overseas payroll by helping to reduce the impact of currency volatility. Already, agencies have sprung up to facilitate cross-border payments by converting currency to bitcoin, conducting traceable transactions and then reconverting digital cash to local currency.
- Educational or Training Certification: As stated by HireRight, cited above, and corroborated by Deloitte curs; employees occasionally exaggerate on their resumes. Deloitte noted that 58 percent of employers have discovered lies about previous employment or academic certifications. Blockchain offers a way to verify this information and puts control in the hands of candidates. Through blockchain, academic institutions can confirm specific data and then provide employers with a digital key to verify this transaction. It's a win-win as candidate data remains secure and businesses can be assured about resumé claims.
Bottom line? Blockchain isn't perfect. Its disruptive nature means that smaller entrepreneurs and businesses will emerge as first adopters, and seamless integration with HR tools will take time. But according to the Society for Human Resource Management, experts anticipate the arrival of blockchain-enabled HR technologies within the next two years. This helps guide human resource investment – adopting agile, cloud-based human capital management (HCM) and payroll services can now help prepare for the shared blockchain future.