Blockchain technology has transformed many industries and processes, and it’s about to impact human resources management in the nearest future too! It has the power to alter the way HR experts approach their everyday tasks.
Demand for this innovative technology in HR departments is on the rise as its capabilities can be extended to various sectors to simplify and improve its operations.
Read on to learn more about five ways blockchain technology can revolutionize human resources management!
- Enhanced data security and protection from cybercriminals
HR departments typically handle vast amounts of sensitive information like personal and financial data on employees. Information relating to pay, health insurance, finance and banking, and performance records can be stored, and therefore exposed to a certain risk.
Blockchain technology can elevate managing confidential data. It can transform data security as the information stored on the blockchain is decentralized and secured through cryptography.
And as an added layer of security, every change that’s being made requires authorization and verification. This is especially important when it comes to delicate information like medical conditions or disciplinary records.
The adoption of this technology significantly reduces the ability of cybercriminals to gain access to sensitive data, making it extremely difficult to tamper with. Organizations from all industries could take advantage of blockchain to secure employees’ data and identify potential data breaches.
- Transformation of recruiting and hiring process
Recruitment requires significant time and resources like financial investment within the HR department. Many companies turn to third-party agencies or recruiters for this reason, but their services usually come with a substantial fee.
Blockchain technology can help organizations streamline sourcing and managing talent. Instead of going through dozens of resumes, it would enable employers with access to verified data stored on the blockchain including grades, degrees, work history, certificates, and experience.
Applicants could acquire virtual credentials in a distributed blockchain network and provide potential employers with permission to access their records. Unalterable records of their work histories would eradicate the chances of inaccuracy and fraudulent applications.
With this innovative technology in place, the verifying process would be more efficient and secure as the need for third-party background and employment history checks would be eliminated.
This way, it would be easier for HR managers to find the right talent for the right role.
Advanced tech solutions like blockchain could enable the building of the next generation work platforms, eliminating bias, spam, third-parties and their fees, and lack of visibility of available workers.
- Paying workers in cryptocurrency
Blockchain is widely associated with Bitcoin and its mining. With the right hardware, bitcoin mining is a profitable business, and as a result, it got mainstream attention. And since Bitcoin hit its all-time high in 2021, it’s no wonder more and more people are exploring mining cryptocurrencies as an income source.
But blockchain isn’t confined to this use only. There are other advantages to this technology that can make HR processes more efficient. Facilitating payments to the workforce is one of them.
Employees want to access their money as soon as possible and move it with ease, and that’s where blockchain technology comes in. With cryptocurrency payrolls, there is no need for intermediaries to process the payments.
Also, the transactions on the blockchain are encrypted and unalterable, and therefore more reliable.
This is especially important when doing business with underdeveloped nations where banking systems aren’t trustworthy, and the currency is devalued. Crypto-based payroll systems could provide a competitive edge to companies looking to attract more skilled workers across the globe.
- Introduction of smart contracts
Smart contracts between the employer and employees would enable instant payments for the workers. And what’s even better, the risk of delay or fraud during transactions would be eliminated. This has particular importance for gig and contract workers, as their work and invoices are usually manually verified, so they have to wait to be paid.
The use of blockchain and smart contracts can automate this process, so payments can be distributed instantly when the criteria for which the wages are earned are met.
Once the worker completes the assigned task (e.g. deliver cargo safely at its destination), the payment is released automatically. Without uploading workers onto the payroll system, HR teams will have more time for more important tasks.
The gig economy is on the rise, so the adoption of blockchain and smart contracts could help companies attract more talent and expand their business.
- Simplifying international payroll
The world is becoming increasingly globalized, and the remote workforce is growing. For this reason, cross-border payments are an important topic in HR departments. Due to multiple intermediary banks, currency fluctuations, and third-party vendors, paying international employees is time-consuming and expensive.
The international business would benefit greatly from blockchain technology, as it simplifies this process and eliminates the need for intermediaries. As a result, the cost of cross-border payments is reduced, and they are completed almost immediately.
The introduction of blockchain-based corporate cryptocurrencies would only ease this process further for the HR and finance departments. And of course, the employees would benefit from faster, more secure payments with no changes in exchange rates.