Blockchain and HR technology: what does the future hold?
Blockchain is a new trend that is changing how businesses operate and improving efficiency across the board. A blockchain is a decentralized database where a transaction needs to be approved by multiple members before it can be added to the chain. As blocks are added to the chain it creates a permanent trustworthy record of events and a basis for future activity.
A blockchain operates on a peer-to-peer basis where the middleman validation is removed from transactions which saves time and costs. Blockchain is a new technology but its application to HR will challenge old ways of doing business. Here are three areas where blockchain will make an impact to HR.
1. A faster recruitment process
The validation of education, prior job responsibilities and skills on resumes can be costly and problematic. When companies close or are absorbed into larger entities employment history can become difficult to find and corroborate. Education can take time to confirm as outside agencies need to review a school and degree to give assurances. Blockchain could help to bypass these issues by creating transactions at the time that they occur. A university could enter or confirm items on the blockchain. Once a degree is confirmed by other members it then requires no further validation so a candidate can be vetted more quickly. An equivalent process can occur for job responsibilities and skills with team members and managers creating and validating skills and experience on a user’s profile.
2. Lower expat costs and faster temp payment
A traditional expat package will cost a company 2.5 times an employee’s salary. There is a high level of self-funded expats throughout the world as employees and contingent workers move on a temporary basis to a higher paying country. The blockchain example of Bitcoin has revolutionized payments across borders by removing the middleman providers like banks. We expect to see more of this functionality incorporated into HR technology as companies look to lower salary conversion costs. Expat employees will also benefit by being able to directly access their salary instead of waiting for it to move from a home bank to a host country bank. Freelancers and temps will enjoy faster payments by companies. We expect to see blockchain making its way into HRMS as a part of existing payroll modules.
3. A changing HR technology landscape
Many of us are used to a predictable HR landscape with a variety of vendors and products. An HRMS supports HR teams in meeting company goals and enhances how employees and managers get things done. Blockchain could disrupt all of that due to the structure of its technology. It’s predicted that one day all of the data related to an employee could be attached to an employee in one block. HR will need to modify processes and techniques to be able to effectively use data. It’s still a future vision but startups are actively pursuing how blockchain could be used in this manner to benefit HR.
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