You’re not alone if you haven’t heard of blockchain. You’re not alone if you have it but are unsure of what it signifies. Blockchain isn’t the most recent technology (Bitcoin depends on it), but it is gaining popularity. Everything we do, both online and offline, including conventional HR procedures, could be disrupted by it.
A digital, decentralized ledger of, well, anything, is referred to as a “blockchain.” According to CB Insights, it may be used to track various kinds of information and is largely resistant to manipulation. You can either keep it to yourself or spread it around. Blockchain removes the trusted HR third party from transactions, doing away with unnecessary middlemen and generating efficiency.
This does away with usage fees and puts control of the process squarely in the hands of the information sender and recipient.
Imagine it being similar to Uber but without the intermediary. Access to a driver, scheduling a ride, checking that the ride actually occurred, and paying for the ride are all possible. Blockchains can be made public or private, according to Adam Bridgers, an attorney at Fisher & Phillips LLP. “Companies can establish their own private blockchains that never leave their servers,” he adds.
Who is making a test run?
Blockchain is being used and researched across several HR industries, despite its relative youth.
The usage of it for payments and records is being examined by banks. The technology was tried earlier this year to track freight by Maersk, the largest transporter in the world.
Several HR third parties, including shippers, Dutch customs, and the Department of Homeland Security, participated in one pilot. Walmart, the world’s largest retailer, uses it to monitor the flow of Chinese cattle through the supply chain. Blockchains are being set up in the field of education to safeguard and distribute student records, diplomas, and certificates. Blockcerts, a “permanent and tamper-proof infrastructure of trust,” was recently introduced by MIT.
Even the legal sector has joined the bandwagon. Attorneys are creating “smart contracts.” Once a deed is transferred or when the conditions of any form of agreement are satisfied, they release money from escrow.
How Will HR Profit from Blockchain Technology?
There may be countless applications for HR. Access to academic qualifications and certificates during the employment process could cut down on the time recruiters spend confirming information.
It might also make a ton of fresh information available.
According to Danny King, co-founder and CEO of Accredible, “By ignoring certifications people have gained post-graduation, you’re losing out on a highly useful data collection.” Blockchains can provide access to post-graduate achievements, and King forecasts that astute recruiters will be able to use blockchain to locate “diamonds in the rough.”
According to him, “Firms that can hire based on verifiable credentials can identify applicants that are neglected by other organizations that are relying just on traditional education and resumes.” This gives recruiting from a small talent pool a competitive edge.
A credential cannot be altered or spoofed after it has been added to the blockchain. Even though a fake credential may appear to have been granted, it cannot be verified against the original blockchain record. Even if the company issuing them is compromised, digital credentials would still be secure. Even if businesses or schools close, candidates’ records are still accessible.
Additionally, blockchains can be used to carry out rewards, events, or payments. The employee may be utilized to start the benefit when they become eligible for health insurance; the blockchain might start a pay raise when a probationary period is completed. Even managing employee contracts like non-compete agreements might be done with it.
According to Chris Szymansky, CTO of JazzHR, employers may soon utilize the technology to log sales representatives’ calls or do background checks.
Finally, it might be applied to grievances and employee reviews. According to Bridgers, former employers might hang performance evaluations from a chain. To speed up the intake process, ask a worker for access to their prior records. In union workplaces, agreements and contracts would be available to everyone. He adds that “some are even working on dispute resolution blockchains” for complaints.
Blockchain can conduct HR payroll for overseas workers more quickly and affordably while avoiding currency exchange expenses. Payments could be made in hours as opposed to days by eliminating the middleman.
The idea of a “self-sovereign identity” for candidates may be realized using blockchain technology. By supplying HR access keys while applying for jobs, people might have total control over the information about their life. Degrees, certificates, courses taken, grades, career history, pay, and other information may be included.
Obstacles to avoid
Szymansky is aware that blockchain technology is young. We are still in the early stages of the development of the internet, and yet we are still experiencing hacks, he added. “Today, the quality of code will have to be checked and secure.” “There is a chance that something will go wrong. Before blockchain becomes as widely used as the internet is now, it must first become more safe, user-friendly, and verified.
According to Bridgers, he questions whether blockchain will offer issues akin to those social media does at the moment. While looking at candidates’ social media profiles, companies occasionally find material they shouldn’t have seen; the same might occur with blockchain data. Will we in the future be debating whether we ought to grant candidates access to blockchain?
According to Bridgers, in addition to having the technology, we also need to have the cultural readiness to make the change in how we think about sharing information.