Disruptive innovation can change anything in the world. Through the use of “smart contracts,” blockchain has the potential to transform the entire way Human Resources professionals search for candidates, manage payroll, and train workers.
according to Coinwire, the decentralized ledger technology known as blockchain was first applied to the realm of cryptocurrencies. On the more positive side, a blockchain is a decentralized database of records that cannot be changed and shared in a distributed way across multiple nodes. Immutability refers to the fact that the information included in a block cannot be changed or deleted once it has been added to the block.
It is expected that the human resources sector will use a public blockchain network that does not require authorization to disrupt human resources sector services such as recruitment, payroll, and training. There are various applications that can benefit from using blockchain technology.
Blockchain-Based Employee Selection
According to the study’s findings, organizations experience an average loss of almost $14,900 due to one “poor hire” (Ahmed, 2019). When it comes to labor processes, there are two components that are sometimes misunderstood, and here are some ways blockchain technology can help businesses.
Credential Verification Using Blockchain Will Eliminate the Need for Conventional Resumes and CVs The use of blockchain technology will eliminate the need for traditional resumes and CVs by using a new open platform that allows rapid search and matching. The data stored on the blockchain will be up-to-date, and will include information about the candidate’s educational background, skill sets, awards, and honors. Verification of recommendations is made easy by using blockchain technology.
Employment history Blockchain technology has the potential to help businesses reduce the number of employment history fraud cases, which are often committed by former employers who have previously reviewed the information. The medical, pharmaceutical, and legal industries, where the stakes are greater and human lives are at risk, are excellent examples of the enormous consequences.
Streamline repetitive tasks
The use of blockchain technology has the potential to radically transform and improve many of the routine, day-to-day tasks of human resource management. Due to this streamlining, the productivity of human resource managers will increase, and they will now be able to concentrate more on other areas, resulting in cost savings for the business.
Keep Tabs in Payroll Despite the fact that almost all payroll systems in large and medium-sized businesses are now automated, Monitoring changes in the system, avoiding fraud, tracking time and attendance, payment alternatives, and benefit administration are all potential ways to make the system stronger. By using cryptocurrency as a medium of exchange for payments, the need for third parties like banks and other financial institutions can be completely eliminated, resulting in a high level of transparency.
Training: Blockchain technology has the potential to revolutionize the way companies teach personnel and the way people are motivated to learn new skills. When an employee successfully completes a training course or obtains a certification, a new block can be added to the employee’s history. This block is persistent and can be easily validated in the future.
Paper-based contracts, which currently require constant and manual attention, are expected to be replaced by digital “smart contracts” in the near future. Contracts that use blockchain technology may be considered smart contracts. The connection provides the parameters for the transaction, as well as the consequences if the parameters are broken. It can not only implement contacts, but also simplified additional activities based on “if and else.” For example, if something like this happens, then this salary will be triggered in certain situations.
It is important that the code supporting the contract is resilient, and it is also important to consider that the activities simplified by the contract are irreversible.
The use of technology in human resource management comes with various advantages as well as disadvantages. Truth and transparency are more accessible through blockchain technology, which is used in the recruitment industry. Technology in this context not only facilitates workers and employers to find each other but also contributes to the development of trust between both parties.
There are certain deficiencies or concerns that need to be addressed, and they need to be addressed quickly. One is to add “blocks” that include incorrect information or transactions, both of which are permanent. The second problem is that the technology is still in its infancy and needs further development. Concerns have been raised about the upscaling of blockchain implementation due to the fact that this is not fully implemented in any industry with its potential. Finally, it is of utmost importance to these companies to comply with GDPR requirements and protect the confidentiality of the data they collect. Due to the fact that the technology is a decentralized technology, the GDPR recognizes the existence of a gray zone regarding the security of personal data. For example, any entity or individual has the right to delete personal information if it is fraudulently characterized as the “right to be forgotten,” which violates the premise of the blockchain ledger. This right exists regardless of the information uploaded by the entity or individual.
In conclusion, Blockchain has the potential to operate as a significant disruptor in the field of human resource management, despite the fact that it must be normalized according to the demands and concerns of certain industries.