Technology has been helping businesses kick their HR efforts into high gear. From automated processes that help streamline processes and create efficiencies that save businesses time and money to better-recruiting software that connects companies to higher quality candidates, HRMS technology is helping businesses be more competitive and use data to inform their decisions.
The future of blockchain technology is another technological advancement that HR stands to benefit from. Blockchain, according to Cake.hr, “can save businesses up to $4 trillion globally. And it’s all due to the fact that with Blockchains, there is no need to verify records, reconcile accounts or manufacture trust.”
Better visibility, reduced errors, and more streamlined processes could be an asset to many HR management groups across industries.
The biggest benefits of blockchain technology
While blockchain began as a way to process and transfer cryptocurrency, the business benefits of blockchain technology extend far beyond this. Blockchain’s main advantages, particularly for HR, include:
- Decentralized – Blockchain isn’t like a server where all the data is held in one area; information isn’t all held by one party or vendor. The decentralization feature increases the safety of data against forgery and tampering, which is incredibly important when it comes to HR processes, like storing and updating employee records.
- Distributed – The distributed nature of blockchain means that anyone with an internet connection can “host” blockchain with a computer. That means that if a few nodes stop working, the entire system doesn’t fall apart and become unusable.
- Credible – When first entering data into a block of blockchain data, it’s created by someone who has the at least change of introducing errors or leaving out information, since they are the original owners of the data and are likely using blockchain to increase reliability and accuracy. Since blockchain records are hard to tamper with, the credibility of the information is high all the way across the process.
- Encrypted – The decentralized nature of blockchain often has people concerned about safety. While it decreases the likelihood of fraud, it gives the impression that data is accessible to everyone. But an additional benefit of blockchain that each “block” of data is encrypted and can’t be decoded without a data key. This key is transmitted from the owner of the blockchain to the recipient for access, preventing any unauthorized access.
How blockchain technology can impact HRMS
Just how do these benefits translate to your human resource management?
Blockchain could enable a comprehensive digital record of employee experience and accomplishments. With these “blockchain” resumes, it’s much harder to forge or fabricate details. Many employers report that they find discrepancies in employee applications, including flat out lying about skill set or education. According to CareerBuilder, 58% of employers find a lie in the resumes they scan. Blockchain technology helps to reduce the possibility of mis-hires by reducing the ability to fabricating details and helping to confirm candidate accuracy and backgrounds without extensive background checks.
Smart contracts can easily be created with blockchain. According to Entrepreneur, “ agreements can be automatically validated, signed and enforced through a blockchain construct. This eliminates the need for mediators and therefore saves the company time and money.” This is very helpful for onboarding employees after an offer has been extended and a hiring agreement has to be signed.
Blockchain technology started as a financial ledger, so it makes sense that it would have a viable application in the HR payroll. For companies with international or distributed teams, it can be a hassle to transfer money abroad. There are also the bank and 3rd party fees to consider, which can make a dent in the bottom line over time. Businesses can ultimately employ blockchain technology to make it faster, easier, cheaper, and even more transparent when it comes to paying international employees. Blockchain allows employees to get the money in their accounts without the traditional relay with banks and exchanges who charge commission fees per transaction.
Imagine automated employee reviews run by a code or script. Blockchain technology makes it possible. Employees can receive regular auto-generated performance reviews based on supervisor-set appraisal metrics. This can help expedite employee training, learning, onboarding, and even enhance retention.
The future of blockchain technology has a lot to offer businesses, particularly in the area of HR. Isn’t it time the technological power of your human resource department matched the rest of your business? A lot of the IT that’s backed by businesses is applied to areas like marketing, sales, and accounting, leaving HR to lag behind from a tech perspective. The general processes of HR – from recruiting to payroll to benefits and compliance – haven’t changed much in the last few decades, and therefore the incentive to grow technology in that part of the business has been lacking. But HR is a key part of the business – it helps to lay the foundation of your company, both through the people who work to support and reach the business goals, as well as building the culture that keeps good employees around. Don’t let the lack of technology in your HR department hold your business back.