Blockchain has already disrupted the payments and insurance industry, but its effects on other business areas, such as HR, have the potential to be profound. Blockchain works as a secure, digital transaction technology that can be programmed to keep a record of virtually everything of value, making tampering with the records almost impossible. Blockchain removes unneeded “third party” transactions and intermediaries that ultimately create process inefficiencies.
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One example is global payroll and HR services vendor ADP, which is currently developing a blockchain-based payroll system to help accelerate payments for employees. The company believes that blockchain’s prospects in areas like identity verification and automated, secure transactions make it a good fit for paying employees around the world.
In addition to supporting employee payments, blockchain affords HR an opportunity for greater trust, value transfer, and transparency to be introduced in processes like talent sourcing and employee data fraud protection. Below are key areas where blockchain has the ability to revolutionize HR:
Talent Sourcing and Management
Two of the major challenges for benefits professionals are finding and attracting top talent, as vetting candidates is still incredibly time-consuming. An advantage of blockchain is that it holds data that cannot be deleted or changed, with the system requiring everyone connected to specific blocks to agree and allow data to be added. In return, this helps HR teams verify candidate credentials in a secure way by reducing the chances that credentials, such as an individual’s degree, will be changed or fabricated.
As recruiting becomes easier and faster, employers will find it more seamless to identify talent from a broader pool of candidates and to hire more relevant workers, diversifying their workforce. Blockchain technology also has the potential to help hire contract or gig workers by quickly verifying skills, knowledge, and experience.
Streamlining Routine HR Tasks
Blockchain’s network allows for the verification and automatic flow of information, ultimately creating more accurate and effective approaches to every aspect of HR. For example, employee onboarding requires a lot of time and manual tasks. If a new employee’s prevalidated credentials and information are kept on the blockchain, it could eliminate much of the time that HR spends entering new employee information into the benefits platform. Through the automation of routine processes, companies benefit from boosted productivity and more time for HR teams to focus on strategic tasks, like identifying ways to improve benefits programs to keep their top talent.
Fraud and Privacy Protection
HR is responsible for large volumes of sensitive, personal employee information. Security risks often stem from a lack of transparency in systems or data, but blockchain can help address these issues and prevent data from being stolen.
For example, while vetting candidates in the recruitment process, it can be difficult to verify information, as personal data can be stolen or faked, leaving the system vulnerable to fraud. Using blockchain, an organization can issue a secure, tamper-proof, prevalidated credential to an individual. Blockchain uses a consensus to establish facts that, in return, help eliminate fraud.
Given enough time, blockchain has the ability to leave its footprint on activities across the HR function, from protecting secure information to streamlining standard processes. The technology modernizes HR teams by helping remove time-intensive and manual tasks, strengthening the role of HR. From there, HR will have more time to be a strategic partner in an organization’s success.
Matthew Jackson is the VP of Proposition and Client Solutions at Thomsons Online Benefits.