HR Processes To Undergo A Radical Shift With Blockchain Technology
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The applicability of blockchain technology has evolved manifold, having already moved beyond cryptocurrencies and the like. Being a decentralised digital ledger, it is being tested and adopted by a variety of businesses in several different industries, all around the world.
In light of that, it is quite evident that with blockchain, information exchange is never going to be the same again. It has opened up a world of opportunities and possibilities, with real-time information sharing, collaboration, and cross-border payment transactions, thereby making crucial advancements at the workplace.
The capabilities of blockchain technology are far-reaching and can be further leveraged in sectors like logistics, healthcare, fashion, and more. Some of the primary reasons behind the massive popularity that blockchain has gained in the recent past are the information security, credibility, and ease of access that it provides. Transactions of all kinds, involving the exchange of information, contracts, records, cryptocurrencies, and more, are stored and maintained in a public ledger, that is completely anonymous to those who aren’t directly involved.
An October 2017 report from CompTIA found that early adopters have already been utilising blockchain for digital identity (51%), asset management and tracking (49%), regulatory compliance/auditing (49%), distributed storage (48%), smart contracts (45%), and cryptocurrency/payments (44%).
While blockchain has been primarily identified as an enabler of secure transactions in the BFSI sector, it is interesting to note that Microsoft and Accenture have partnered with each other to address a more humanitarian cause - ID2020. Having created a blockchain solution that acts as digital identification for refugees, the two technology giants will together be able to provide access to education, banking, healthcare, housing, and more, to around 1.1 billion people worldwide.
How Can HR Benefit from the Blockchain Technology?
Since it is a decentralised, distributed system, all the information stored on blockchain can be accessed from anywhere, and at any time, while being secure, authenticated, and verifiable, with appropriate visibility. Being a platform possessing such enhanced cybersecurity capabilities, it is also changing the way payment transactions are carried out, with the added potential of helping streamline and amplify key aspects of HR processes, in an efficient, error-free way.
- Talent Acquisition and Onboarding
One of the most important areas where blockchain can find a high potential of applicability is Talent Acquisition. Any information stored on the blockchain is unalterable, so no piece of data can be modified or deleted. In this space, this means that a candidate’s background information, including his resume, educational certifications, work experience, salary slips, and the like, are carefully validated. Equipped with that level of trust, organisations no longer need to invest time in third-party agencies to check for information accuracy. Candidates have complete ownership of their data and can store and share it with employers, whenever they need, through a secure platform.
With blockchain, the entire onboarding process has become almost completely paperless. KYC identification and documentation is faster, verified, and accessible, on a real-time basis. When coupled with Machine Learning, organisations can, in fact, filter through validated and qualified resumes, get accurate candidate suitability predictions, and expedite the search for the perfect candidate.
- Travel & Expense
In the example shared above, on ID2020, the technology used biometric data, such as a fingerprint or iris scan, for legal ID and record-keeping. Similarly, blockchain can use employee data (fingerprint, face recognition, and iris, for instance) to track attendance and expenses, which can be used to process claims, with enhanced visibility to the HR, in real-time.
- Payroll Processes & Final Settlements
A PwC UK report on ‘How blockchain technology could impact HR and the world of work’ suggests that organisations have the potential to create their own corporate currencies, and manage employee mobility, including international expenses and tax liabilities.
Blockchain also offers cross-border payment flexibility, while eliminating errors, third parties, and multiple intermediary banks. Remote employees can benefit as well since payroll processing is done on a real-time basis.
Additionally, it eliminates back office functions and helps realign the focus on core business functions and objectives. It presents multiple benefits in terms of cost and time saving, for the organisation, thereby contributing towards the business outcomes, and even strengthening the role of HR as a business partner.