Blockchain in HR: A Disruptor?
If blockchain's capabilities are used to the fullest extent, it could completely transform the future of the industry
At the start of this year, blockchain turned ten years old and it continues to gain momentum. It is predicted that by 2020, over 50per cent of large enterprises will adopt blockchain-enabled technologies. According to research by Statista, investments in blockchain technology will reach $2.3 billion by 2021, which is tremendous as it was only $335.5 million in 2017.
As we have seen, blockchain has been shaking up the finance world for quite some time. It has now turned its sights to the HR sector, where departments are embracing the technology with open arms. The blockchain is a digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Each "block" of data is bound to each other using cryptographic principles, or a "chain." Simply put, blockchain is a decentralized database. The opportunities are endless in incorporating blockchain technologies in various HR processes, especially when it comes to recruitment and talent acquisition. If blockchain's capabilities are used to the fullest extent, it could completely transform the future of the industry.
So, let's examine the ways blockchain is poised to change the way HR is conducted and managed:
- The Recruitment Process Will Be Streamlined
What usually comes to mind when one thinks of the recruitment process? It usually entails mining applications, conducting interviews, and negotiating for salaries. A major part of the recruitment process, however, is verifying the actual information a candidate provides. This is usually done by checking references from previous employers and validating education information.
Blockchain can help streamline and make the process more efficient – by creating a "candidate verification system" of sorts, employers can flesh out employee profiles and essentially create a sophisticated HR ledger. The system can help verify education, work history, performance, a number of other data points which could ultimately determine if a candidate is a good fit for an organization. The referencing process will become more transparent - thus allowing organizations to hire the right pool of talent best suited to their goals.
- Traditional Resumes Might Be a Thing of the Past
As mentioned before, blockchain will transform the way organizations screen and select candidates. Blockchain technology has the potential of making classical resumes and career networking websites like LinkedIn, Naukri.com etc. obsolete and redundant. Companies will eventually have a database filled with the "digital profile" or "digital footprint" of individuals. Recruiters and hiring managers then can pull up a public blockchain to get to learn more about an individual's digital footprint. It is even possible that blockchain can store performance indicators, such a why a candidate was promoted or left a particular organization.
- Job-Matching Will Becoming Easier
Blockchain has the potential to make a future job- and culture-matching easier for potential candidates. If a candidate is not ready to enter the job market just yet, the companies that they are interested in could potentially track their professional development and match with future job opportunities. With blockchain, it does not have to be a tedious process to search for a job.
- Securing HR Data from Within
One of the biggest advantages of blockchain is security. While we have read countless horror stories of credit card information or password data being breached from external resources, HR departments have to worry about company data breaches from within. The HR team can help rectify this issue by leveraging blockchain's security measures.
- The Payroll Process Will Be More Efficient
Blockchain technology can especially be a useful tool for organizations that conduct payroll overseas. Many areas in the payroll process tend to be outsourced to third-party organizations. By adopting a decentralized, secure ledger, the necessary parties have a method of validating information more efficiently, therefore cutting out the middleman. With overseas payroll, it can be a lengthy process due to multiple banks and third parties involved, as well as shifting currency exchange rates. Blockchain solutions can effectively reduce the fees for employers and the wait time for employees. A win-win situation for both parties.
The list above is only just a sample on how blockchain can transform the HR industry. The possibilities are endless – it is certainly an exciting time!