Starting in 2017, the world saw a major disruption in currency with the abrupt rise of Bitcoin. Bitcoin is an electronic payment system based on mathematical proof. The idea was to produce a means of exchange, independent of any central authority, that could be transferred electronically in a secure, verifiable and immutable way. This is the year that the world’s attention and imagination was finally captured by this industry as a result of its breakneck growth and the seemingly limitless possibilities it offers for a modern life. This is an industry whose growth surprised many and disruption will affect many in the upcoming years.
Though many saw the abrupt rise and fall of this currency, the technology behind it will remain constant for future years. This technology is known as (blockchain). Blockchain can simply be explained as a decentralized open ledger system of adding, verifying and then recording transactions between peers in a transparent, efficient and irreversible manner. Blockchain technology is the first known man-made creation that is impossible to compromise, sabotage, or change by any other human or single entity once it is put into play (I’m sure all readers in HR are smiling after hearing that!) Blockchain organizes information into groups of data called blocks and distributed over networks. In other words, it is a decentralized digital database that allows everyone in a “chain” to see and verify the details of every record in the network.
Blockchain has four defining features:
• Decentralization:
Blockchain is an open ledger that is created to accept, verify and then add transactions, with no central core or building where its infrastructure resides. It is the technology that gives every user with access to a computer and an internet connection the opportunity to participate and become an active stakeholder in any service or industry.
• Immutability:
Once a transaction is accepted, verified and then stored on any blockchain, it cannot be undone by any entity whatsoever; not even the creator of the blockchain can change the values and inherent data of such a transaction.
• Security:
Blockchain is such a limitlessly faceted technology with no single point of failure that hackers, no matter how skillful they are, cannot inject any malicious software on it that does not get rooted out immediately.
• Immense Computational Power:
Blockchain is completely immune from any attempt by any regulating entity in the world to shut it down.
I’m sure many of you are wondering how we can use this type of technology to make our lives easier at work? Out of the many uses we will talk about in this article, the largest potential benefits comes from blockchain’s ability to support HR’s organizational capabilities. Organizations that implement blockchain become more transparent, democratic, decentralized, efficient, and secure due to these primary advantages:
• Data is distributed: the technology runs on computers provided by volunteers around the world, so there is no central database
to hack.
• The process becomes public: Anyone can view it at any time because it resides on the network.
• Data is encrypted: Blockchain uses heavy-duty encryption to maintain security.
With that being said, how is it being used?
In terms of the hiring and recruitment process, access to academic credentials and certifications could reduce the amount of time recruiters spend verifying information. Through blockchain technology, you will see significantly less time spent on calling employers to verify backgrounds, as well as less money spent on outsourcing background checking services.
Blockchain can provide open access to post-graduate accomplishments. Also using the concept of blockchain technology, we would have a real database of resumes, owned by the candidates themselves but where their qualifications and achievements are verified, and accepted, by the companies they had worked for in the past and the schools in which they attended.
In terms of benefits administration, when an employee becomes eligible for health coverage, blockchain could be used to initiate the benefit and when a probationary period is satisfied, the blockchain can trigger an increase in wages. It could even be used to administer employee contracts, like non-competes.
In terms of payroll and contracts, experts believe blockchain also could have advantages for payroll, particularly for payments made internationally. Global payroll can be costly and often delayed because of the many intermediary banks and third parties involved in the process. Blockchain’s ability to simplify and standardize payments by eliminating the middle man may make it attractive to payroll managers. Everything from tracking payroll and issuing paychecks to managing contracts is more efficient with blockchain. The technology allows companies to send and receive funds instantly and securely anywhere in the world without using a bank as a go-between, and without the corresponding fees that apply.
It can also eliminate many of the day-to-day tasks of managing contracts by implementing smart contracts, which can automatically carry out predetermined terms. Both parties would be guaranteed that the other side would uphold those terms without having to spend as much time ensuring proper oversight.
Wrapping it up:
While most experts agree that blockchain will be used by HR for hiring and managing purposes at some point, it’s not a common — or even a trending — practice yet. There are still many details to be ironed out. Unlike financial applications, recruiting, resumes or job histories don’t have any current scenarios in which the history is currently trusted. What this means is that HR’s use of blockchain technology will likely be confined to verifying and documenting education and training — at least initially. However, having a secure network of these “Blocks” creates limitless possibilities in other areas this could revolutionize in the future. What started off as a means of decentralizing currency has truly paved the way for a technological revolution in modern-day business operations everywhere.