What strikes your mind when you hear word Blockchain? Undeniably, It’s bitcoin, the best-known cryptocurrency, for which the blockchain technology was invented and still survives. However, with time, the technology is eyeing a landing in different industry verticals, making it accessible into almost every organisation’s operation.
Blockchain is poised to create $3.1 trillion in business value by 2030. It has become essential for the HR department to adapt to technology and shed its bureaucratic past and utilise the data at hand.
This technology is becoming mainstream and enabling a paradigm shift in the human resource space. From recruiters to senior leadership, every member of the HR department is continuously glazing over the components and capabilities of it to engage with the right talent in real life.
Though it has several use cases, and benefits, HR professionals find it challenging to understand the fundamental and functioning of Blockchain. But, by the time they will start using it, they will realise that it is a perfect match for human resource management.
Let’s have look at some of the use cases of Blockchain in HR
Key areas in HR that can be enhanced using Blockchain
We cannot doubt the technical performance of blockchain technology, and in the upcoming years, AI and blockchain are all set to boost HR productivity through its following use cases.
Recruiting Procedure, background and employment-history checks
In today’s recruitment system, it has become difficult for seasoned recruiters to identify applicant’s falsified employment history and education credentials. A report by CareerBuilder says that 75 percent of HR Managers lie in their CV about their job history and educational qualification.
While some of the recruiters manage to verify the information from Linkedin and other sources, these processes are a bit time-consuming at the same time. With help of blockchain technology, only the permission applicants for a particular position can access the virtual credentials inside a distributed blockchain.
This helps in eliminating the number of fake applications and provides the recruiting team with the entire record and work history of the applicants.
Employee data security and access
We all know that it is the HR of a company that understands your performance history and at same time, keeps track of your personal and private records. They are obliged to keep it safe and confidential with them only. So, how do they do so?
Employee records are always encrypted in the blockchain ledger whos access is restricted to only a few hired hands within the firm. However, the human resource team can share the details in tokenized form when asked for, but only with those who have verified permission.
It decentralises the data which acts as a key defence against hacks and frauds. Blockchain technology evenly spreads the data across an extensive network which mitigates the risk of being impacted by a single hacking event.
Blockchain smart contracts streamline contractor’s payment
A smart contract creates enforceable and immutable rights and obligations for all participants. Immutable contracts in HR can, for example, automatically release payments from escrow once workers complete assigned tasks, which smooths income for workers and cash flow for companies.
Immutable contracts in HR can, for example, automatically release payments from escrow once workers complete assigned tasks, which smooths income for workers and cash flow for companies.
With the help of Blockchain smart contracts, immutable contracts in HR can be paid out to the employees, contractors and vendors. The report says that the 45 per cent of the early adopters of Blockchain has already implemented smart contracts within their organisation.
Have a look at it’s working:
Blockchain’s smart contracts codes using a set of parameters in “if this, then that”(IFTTT) coding language. With the execution of this code, the payment processing gets completed.
The IFTTT code is linked with an instruction from the company’s bank account to the contractor’s bank account, which streamlines the payment processing.
After certain hours of work gets completed, this smart contract automatically pays the employee, contractor or vendor the correct payment (a ‘then that’ variable) by deploying the ascribed piece of remotely executable code.
Automate taxes & mitigate the strain of audits
The HR industry is trying their hands-on Blockchain’s powered-platforms that can efficiently manage the evolving tax laws and regulations across jurisdictions. It can automatically record and update employee tax considerations and provisions, thus making it a preferred choice for all the HR departments round the globe.
Annual audit hits every company across all the industry verticals, and blockchain technology has proved itself to be a life preserver for the HR department. With this tech stack, businesses can sustain an audit and eradicate time and cost spent on the document collection.
It’s cryptographic hashes feature, and source verification procedure securely shares the records with regulators in real-time and creates a strong barrier against the document manipulation and fraud.
Enhance employee experience in the dynamic expense reimbursement system
Blockchain offers a robust approach by analysing the employees’ performance so that the human resource team can better assist their employees by awarding them with appreciation letters for salary increment.
It also helps in the reimbursement of employees expenses as it is one of the most pain points for all the HRs within an organisation. It allows firms to create their own individualised cryptocurrency through which they can save their expenses on processing fees, accounting for international exchange rates, reducing in-house HR staff, etc.
Up to You
It’s high time that HR professionals should bid adieu to the labour and expense they used to put in their working strategy and become an early adopter of blockchain-inspired approaches.
Blockchain indeed has challenges in terms of cost and scalability, but it enormously overshadows the potential uses of it in the HR management system. With its sturdy positive records in almost every industry verticals until now, this tech is piloting and envisioning its use cases in the HR industry.
If you also own a company and are looking to implement blockchain and its use in HR functions, then hire blockchain developers in India for the best software development companies.