Blockchain technology is poised to change traditional HR practices.
The simplest explanation of this technology is that it provides a secure way to view data in real-time. Data blockchain technology records is difficult to change.
The technology was popularized in 2009 by Satoshi Nakamoto which used it as the foundation for creating the cryptocurrency, Bitcoin. This revolutionary application of the technology facilitated advances in cybersecurity and online financial transactions.
HR efficiency can be improved using the security blockchain technology provides. A report published by PwC explains how blockchain technology can be used in HR. Highlights from this report, as well as general perspectives on the topic, are presented in this article.
Back-Office Functions Will be Eliminated
PwC defines back-office functions as the intermediary functions of a transaction. Such functions include reconciliation, providing a receipt, and providing a purchase order. Removing these intermediaries provides 2 main benefits to businesses.
Firstly, the time taken to complete transactions, and other administrative tasks, is greatly reduced. Reduced transaction time creates more time for employees to spend on other important business functions. The HR team can plan more training sessions to improve employees’ skills. Employees can also attend more conferences and external training opportunities to keep them current.
Secondly, it reduces business expenses. One would think that removing the intermediary functions would result in the loss of countless jobs. Companies are avoiding massive job losses by merging these functions and training these employees to take on roles in enterprise risk management and financial analytics. Both functions are crucial for business success.
Hiring Processes Will Be More Effective
Hiring managers will be able to access a database of potential employees. This database will contain a comprehensive, trustworthy records of these person’s education, skills, training and workplace performance. Dubbed the “value passport”, this useful information increases a hiring manager’s ability to find the right talent for positions. It also increases the potential employee’s ability to showcase their best skills.
Productivity Will Increase
It is felt that better matching people with positions will improve productivity. This will be particularly helpful for small and medium-sized enterprises (SMEs). The small size of these companies often makes it difficult for recruiters to find the best matches for positions. Blockchain technology will generally help people work in roles best suited for their skills.
Cross-Border Payments Will Become Easier
Cross-state and cross-border countries can use block chain technology to create their own currencies. These currencies can make it easier for inter-company and supplier transactions to be performed. The system they use would ultimately allow for the created currency to be converted into real currency.
Verification process across borders will also become more efficient. Multi-signature systems will become a thing of the past with the implementation of smart contracts. Smart contracts allow agreements to instantly be validated without the need of a mediator. Credits is an example of a smart contract solution built using blockchain technology.
Additionally, a somewhat “global currency” will make it easier to remain compliant with tax laws for various countries. Such applications require further research, but they’re worth mentioning.
The Likelihood of Fraud is Greatly Reduced
HR handles a wealth of personal data for employees. Unsecure digital storage systems for this data are open for cyber attacks that lead to identity theft and fraud. This is particularly true for SMEs. Blockchain’s cyber security application mitigates against these challenges. It also limits employees’ access to data thereby preventing the likelihood of internal fraud.
New approaches to improve workplace efficiency are introduced each year. Blockchain is one of the most recent digital solutions that can greatly improve HR functions. Research is continuous, but it’s highly likely that some of the applications mentioned in this article will soon become mainstream. Keep abreast with the latest updates so that you can apply them in your organization.