Blockchain technologies are already impacting companies’ digital transformation journeys. For me this prompts the question: How will blockchain technologies’ impact HR?
According to Deloitte, in the last 10 years HR technologies have seen their fair share of change. HR solutions have moved to cloud platforms as organizations recognize the importance of integrated and simple HR processes with mobile access. In line with employees’ consumer-grade digital services expectations, HR departments are transforming their structures, processes, and technologies to ensure a five-star employee experience. HR departments’ ability and agility to innovate, to continually reinvent the customer experience, and to embed advanced analytics and social media will be further challenged over the coming years
How can HR make use of blockchain technologies?
What is blockchain technology? The World Economic Forum defines blockchain as an open, decentralized database of every transaction involving value: money, goods, property, work, and many others. Blockchain technologies can help organizations realize digital transformation and drive innovation. They provide capabilities to realize transactions in a peer-to-peer network in a distributed fashion.
According to a PwC roundtable of HR professionals and blockchain scientists, the impact of blockchain technologies on HR and the workplace will be transformational.
HR areas that may be impacted by blockchain technologies include:
- Talent acquisition: Verifying candidates’ background info and assessing their potential for a specific role currently requires significant resources – both time and financial investment – but blockchain eliminate the need for third-party background verification (provided candidates allow permission for potential employers to access their data). Furthermore, candidates’ experience can be matched more accurately to the job requirements during the sourcing stage. If the candidate is not a “fit” for a currently available position, employers can track candidates’ development and match them with future job opportunities. Younger workers, characterized as digital natives or the Internet generation, are more relaxed with sharing personal information. Thus, they are unlikely to resist (and even to like) allowing employers to use blockchain technologies for background verification.
- Happiness at work: Matching the right profiles with the right positions at the right time is a win-win for all. Employee happiness is more important than ever. So, why not use technology that enables this? Matching a job to the employees’ skills and aspirations brings success, self-satisfaction, and happiness to the employee while creating a positive impact on business results through increasing creativity, productivity, and innovation. Blockchain technologies are a critical tool that can help realize these benefits.
- Payroll and mobility: As the world is increasingly globalized, the distributed workforce is growing, and cross-border payments become a critical topic for HR departments. Currency volatility, with even hourly changes in exchange rates, can have an immediate effect on both the employer and employee. An international blockchain solution for payroll can offer a faster solution than existing models. Companies in the future may use blockchain-based coins as their trademark currency for international transactions. This may ease cross-border expense management for both HR and finance departments.
- Security: Blockchain technologies offer benefits in high-volume financial transactions and maintenance of a wealth of sensitive personal data, areas HR is heavily involved in. Blockchain’s use of consensus helps prevent fraud and protect data. The issue isn’t how blockchain technology works for HR; what matters is that it establishes trust in transferring information.
How does blockchain establish trust?
It does this through consensus: Blockchain records cannot be deleted or overwritten but only added. When a new block is added, the change is visible to everyone with permission to access the blockchain. If they don’t agree with it, it will be not accepted. This means no single actor can make a change alone. Trust is distributed and shared, rather than residing with any single source or person.
What are the benefits of blockchain technologies in brief?
- There’s no need for a third-party or central authority for peer-to-peer transactions, which reduces third-party costs.
- The decentralized system without intermediaries reduces risks for security but increases transparency, auditability, and regulatory compliance.
- It allows real-time and fast value transfers.
- Since blockchain records may not be changed, re-ordered, or removed, they reduce documentation liability.
- It simplifies the operation of collaborative scenarios.
We started talking about disruptive technologies and how they can be used in HR a while ago. Today blockchain is considered one of the most disruptive technologies. HR is responsible for companies’ most sensitive data – that of its employees – and by using the latest technologies, HR has the opportunity to create better places to work, in line with the requirements of business and changing employee expectations. HR needs to invest in blockchain technologies as part of its overall digital transformation journey.
Learn about other ways blockchain is being used across business and industries in “The Blockchain Solution.”