We’ve discussed cryptocurrency and Bitcoin when it comes to paying employees. What about the backbone technology that makes digital currency exchanges possible?
Blockchain is an encrypted digital ledger which spreads information across vast networks of computers globally as opposed to through one central storage location. Records are organized into groups of data (blocks) and are distributed over networks – its decentralized database allows record details to be seen and approved for verification by everyone with access to the peer-to-peer network (chains). Currently, digital records exist for digital assets (currency) and digital ID verification.
As one of the rising technologies in the market, blockchain has the potential to disrupt multiple industries and make information exchange more secure, accurate, and efficient with transactions driven by ‘trust through consensus’.
Here’s how blockchain aims to disrupt processes in HR and payroll.
Verifying the qualifications of job candidates
To assist with the recruitment duties of sourcing and managing the talent pool, HR can utilize blockchain technology to assess the accuracy and verify the validity of a candidate’s qualifications, credentials, and certifications.
During the resume authentication process, verification is mainly conducted through reference checks. 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.
Maintaining a digital record of employment history
Blockchain has major potential on both sides of the employee-employment relationship, including the ability for people to maintain and control access to a comprehensive and trustworthy blockchain-based record of their education, work skills, and workplace performance. In time, all employment-related details associated with an employee would be available in one block – including security access, insurance, payroll, expenses, work performance, and employment history – essentially serving as their digital key. By providing potential employers with access to their digital passport, candidates will be able to share their value in the employment market, while giving companies the ability to match individuals to the most appropriate roles accurately and effectively.
Supporting employee mobility through international payment solutions
Sending out payroll payments electronically to overseas employees is costly and can take a long time to process due to intermediary third-party involvement. Factors such as frequent changes to exchange rates can add up as well.
Knowing this, blockchain provides a way of tracking financial transactions without a central authority. Blockchain tech will disrupt payroll by facilitating the management of employee mobility through the issuing of cross-border payments via an internationally-minded solution.
Blockchain technology is equipped to manage international expenses and tax liabilities, handling the conversion of bitcoin to be paid out in the employee’s local currency. There is also the potential for companies to create their own blockchain-based corporate currencies (or coins) that can be used to transfer value across the organization without third-party reconciliation costs.
Additionally, blockchain aims to improve upon cybersecurity in human resources through how fraud prevention and data protection are handled. Blockchain’s use of consensus to establish factual data helps to eliminate fraudulent data. Due to its decentralized storage base and distributed nature, blockchain’s very presence reduces the threat of cyberattacks upon data systems. Given HR’s involvement in high-volume financial transactions and responsibility for sensitive personal data, blockchain’s support in these areas is especially important.
Over to you
As blockchain moves rapidly to disrupt the current structure of how recruitment, people management, and payroll-related processes are conducted, company leaders should start to investigate and pursue the ways in which blockchain technology could be used to disrupt HR for the benefit on their organizations.