Why HR Professionals Everywhere Should Be Paying Attention to Blockchain

Blockchain was originally created as a way to digitally manage Bitcoin. While this may seem like it has nothing at all to do with HR, the secure and yet transparent ledger may have farther reaching applications than its inventor, Satoshi Nakamoto, intended.

Blockchain is a continuous ledger that stores bits of information, called blocks, after verifying them. Any transaction that moves through blockchain is recorded and is available for viewing to anyone in the particular blockchain network that has been established. This may become useful for medical establishments, financial institutions, and human resources, and those are just some of the obvious beneficiaries.

Blockchain Employment Verification

Employment verification is by and large a jaunty process at this point. While many aspects of recruitment and HR management have been transformed by technology, employment verification is still mainly done by calling references provided by the applicant. Even if hiring managers do find the truth regarding an applicant’s previous employment, they may never find out about performance at that job or about jobs that have been left off the resume.

Blockchain can be used to create a continuous record of a person’s employment. Instead of spending time calling references, hiring managers will be able to simply access candidates’ employment blockchains. While there won’t likely be any notes about employment, performance indicators like promotions and certifications are sure to be visible.

Payroll through Blockchain

Blockchain allows companies (or individuals) to send and receive money instantly. The system doesn’t rely on banks to act as middlemen, so it cuts out fees and waiting periods. Using this type of peer-to-peer system can make payroll much easier and faster.

Smart Contracts

Contracts in business today can be problematic, as they require honesty and effort from all parties. Smart contracts can take some of the risk out of contracts by automatically acting on agreed upon terms. This could make it easier to pay vendors, get paid by clients, and pay contractors, as the money will change hands as soon as the project or time period is completed.

Performance Management

Instead of using clunky annual performance appraisals, blockchain could streamline performance management. Employers, managers, and peers could all continuously provide input regarding performance, creating a more complete and accurate picture of overall performance for each employee. Instead of trying to find old notes about performance, HR managers could simply tap into a blockchain that contains a wealth of performance information.

While the applications for blockchain in the HR world are still under construction, the technology stands at an exciting precipice. This technology is more secure than most of the software in use today, yet allows many users to simultaneously view and alter information. Blockchain may be poised to change the way HR is managed in a big way.

The technology will likely work best and require less transitioning for companies that have already taken steps to digitize the way that human resources is managed. If you’re not using the most up-to-date HR software, visit our vendor match page so that we can help you get ready for these exciting changes.

Sources: