More often associated with bitcoin and cryptocurrencies, blockchain has the power to transform businesses like never before.
We have all seen and experienced what the Internet did to our lives and workplaces. It was a breakthrough that completely transformed the way we all communicate, making the world connect more seamlessly, overcoming geographical barriers and making work faster and easier. While technologies, such as data processing disrupted how HR looks at hiring, and record keeping for attendance, leave, payrolls and so on, AI, machine learning and blockchain technologies are the next big things that will change the way we work and interact.
Blockchain is the new kid on the block that is least understood, and yet, the most promising in terms of how it will impact businesses. In times when data and information are available in excess, the biggest challenge that faces businesses is managing and securing the flow of all this information. This is where blockchain makes its power felt. More often associated with bitcoin and cryptocurrencies, blockchain has the power to bring in a lot more transformation for businesses. It is an encrypted, digital ledger of public records organised into groups of data called blocks and distributed over networks
For now, blockchain is to value transfers (payments and capital market), what the Internet is to information, but it is set to transform how HR functions, with interesting implications on payroll, talent, skill management and more. A 2017 report —‘How will blockchain technology impact HR and the world of work?’—suggests that together with other emerging technologies, such as AI, machine learning and augmented/virtual reality, blockchain will be able to influence HR and businesses.
Here are the two areas in HR that experts believe are sure to get a makeover by blockchain technology.
Cross-border payments and mobility: Taking away the transactional challenges of supply-chain issues and the hassles of third-party reconciliation, blockchain-based currencies will ease out transferring values globally for businesses. According to the report, banks will also get involved, over time, offering their own blockchain-based means of exchange to support convertibility into official currencies. This will help organisations manage their multi-country workforces better by easing out the current tedious processes required for managing cross-border expenses.
One company that already offers the convenience of a hassle-free blockchain-based payroll system is Bitwage. It uses the technology to facilitate cross-border payments through its cryptocurrency, bitcoin. It allows employees or contractors around the world to be paid by organisations in their preferred currency, handling the conversion of bitcoin to local funds. Workers can use 25 different currencies to receive wages, and Bitwage promises to pay out within 48 hours, regardless of where workers are located.
Hiring efficiency: Information verification about a candidate is one of the biggest challenges faced in making hiring decisions. A survey by CareerBuilder revealed that a significant 58 per cent of employers have caught a lie on a resume. This means ensuring resume accuracy or candidate verification is one of the most concerning, time and money consuming tasks for most businesses looking to hire the best talent. With blockchain technology, recruiters will have access to digital candidate certifications (owned by the candidate, secured by a digital key and approved by the institute providing the certification) without having to deal with third-party employee-verification services.
For instance, the Massachusetts Institute of Technology (MIT) is piloting a diploma system that can be accessed by a digital key. The system allows MIT students to access and ‘own’ a secure and certifiable digital file of their MIT diploma; the digital diploma is provided in addition to a standard physical diploma.
While it may not be long before all of it becomes a reality across organisations of various levels and sizes, HR professionals for sure need to keep a close watch on how technologies related to blockchain are developing, for this is what will define the future of various functions within HR. HR will also need to constantly scan the market for vendors bringing in innovations and advancements merging AI, analytics and blockchain, to create solutions for the pain-points in existing processes.