Blockchain was originally devised for the digital currency Bitcoin but its uses are becoming increasingly diverse. For example, it is reported that IBM, Samsung, Visa, Walmart, Microsoft, Toyota and Barclays are already using blockchain in various ways, while it is predicted to be the future of HR. So, how might blockchain revolutionise the world of HR?
What is blockchain?
Blockchain allows parties to enter into transactions with one another based on mutual trust, without the need of a third party (for example, a bank). Transactions create ‘chains’ which cannot be added to, altered, or deleted without the permission of both parties. It also creates the opportunity for ‘smart contracts’ – codes that can be programmed to take specific action when certain conditions are met (for example pay at the contractual rate when an employee works contractual hours). The automated aspect could include employment contracts, payment and tax obligations, among other things.
Blockchain is not only of potential benefit to financial transactions. It can help any situation which requires parties to verify, move or share data.
How can blockchain help HR?
Although there are a number of ways in which blockchain might enter the world of HR, it is anticipated that the main impact will be in relation to payroll and recruitment.
Blockchain could have significant time and cost advantages for payroll, particularly for payments made internationally. Paying employees overseas is expensive and can take a long time to process. Intermediary banks and third parties often take advantage of hourly fluctuations in exchange rates. This has an effect on both the employer and employee.
A blockchain solution to this already exists – Bitwage. Bitwage uses blockchain technology to facilitate cross-border payments using Bitcoin. Employees can ultimately receive whatever currency they choose and Bitwage handles the conversion from Bitcoin, guaranteeing payment within 48 hours regardless of where the employee is based.
Verifying education and employment information on a candidate’s CV is a constant HR hurdle. Blockchain could provide a much quicker way of checking credentials.
Blockchain based CVs could provide a secure database of people which accurately records their experience and skills. Job candidates would hold the power to release an existing ‘chain’ which is already, for example, cross-signed by a university, verifying a degree. An HR system could then link to that record and accept the information as verified.
This would make this stage of the recruitment process more transparent and efficient, removing the unscientific task of a human searching on pages such as ‘Linkedin’. It would also allow companies to ensure they are approaching the right people, irrespective of age, gender, ethnicity and nationality.
In fact, APPII launched what it called the ‘world’s first blockchain career verification platform’ in 2017.
Blockchain may not change the face of HR immediately. However, it is clear that it is anticipated that it will have a significant impact in the years to come.
If you would like to discuss anything raised in this blog in more detail, please get in touch with your usual Brodies contact.
On October 30, 2018