The demand for blockchain in HR is increasing, and we are here to explain why. Blockchain technology is quickly becoming a staple in many industries, including HR. Here are some of the advantages of using blockchain in HR, as well as examples of startups that are already using it. Blockchain technology can help with data management and other human resource activities. Certain HR areas are already adopting blockchain-inspired solutions. Rather than cryptocurrencies, there are several blockchain use cases, such as blockchain gaming. You will find the one most appropriate for your needs among the 4 types of blockchain in the best blockchain platforms as we saw it in enterprise blockchain examples.
Before we get started, here is a list of the best blockchain books in 2022 for better understanding. You may have heard about the blockchain talent gap and started to ask what is a blockchain developer. But unfortunately, you find some blockchain implementation challenges and security issues. Let’s take a closer look at whether this also applies to human resources.
Blockchain in HR
According to Gartner, blockchain will generate $3.1 trillion in business value by 2030. However, a significant proportion of these profits will be generated and efficiency enhancements in existing operational models and business processes. The true value will come from how it allows for a paradigm change in how societies, businesses, consumers, partners, and individuals interact, create, and exchange value.
In its most basic form, blockchain allows people who don’t know each other to exchange value in digital scenarios. In essence, blockchain provides trust in untrustworthy situations without needing a trusted central authority.
Blockchain technology is most recognized for its use in protecting the cryptocurrency infrastructure (e.g., Bitcoin) and ensuring secure financial transactions without the help of a bank or middleman. The technology, on the other hand, examines a landing in the human resources industry, which will undoubtedly affect how HR professionals handle huge quantities of personal data and apply various HR procedures. We already have several HR issues in which verifying identity and qualifications could be improved by using blockchain technology.
The rise of new HR technology has created a $10 billion global demand for HR software by 2022.
Deel, Bitwage, Papaya Global, and Chrono.Tech are a few of the firms that provide adaptive technology to manage employees while diversifying income sources so they may be kept and motivated.
How blockchain technology could impact HR and the world of work?
How can blockchain increase human resource management efficiencies? The consequences of the blockchain on HR aren’t just for businesses since blockchain transactions affect individuals as well as large corporations.
The use of the blockchain in HR has several benefits, including:
In addition to managing sensitive employee data, HR teams are responsible for executing some of the highest-volume financial transactions for an organization as well as handling sensitive employee data related to pay, healthcare, finance, banking, disciplinary records, performance records, expense reimbursement, and more.
All HR department’s data is vulnerable to exploitation, and as more businesses have data breaches, precautions must be in place to prevent fraud and maintain security. Blockchain technology is being praised as a solution to increasing cybersecurity crime.
Blockchain technology can aid in the prevention of both internal fraud and external attacks on sensitive employee records. The blockchain is restricted and controlled, with even those who have access unable to make arbitrary changes. This restricts both internal fraud and external hacks of important personnel records.
Recruiting is a time-consuming and resource-intensive process for the HR department, to the point that businesses turn to third-party agencies or recruiters to reclaim lost time. However, owing to their high cost, such solutions may be counter-productive.
Most of the candidate information often discovered during the recruitment process may already be found on the blockchain. A considerable amount of the procedure has already been automated. Resumes will no longer be necessary, and looking at qualifications, certificates, work history, and experience should be straightforward.
Blockchain’s potential to eliminate many of the third-party and back-office components of recruitment may make recruiters obsolete.
Multinational businesses may take steps toward adopting blockchain by developing their blockchain-based corporate currencies or “coins” that they can use to move value across their organization globally and transact with their supply chains. Central banks will also get involved, offering their blockchain-based means of exchange for converting into “official” currency.
More secure transactions that are encrypted and permanently stored on the blockchain make auditing and reporting easier. Payees will no longer rely on third parties such as banks to handle payments. Banks will also no longer be able to distort transaction values by trading real (government-issued) currencies, skewing their worth – and therefore changing their value.
Smart contracts for the contract or temporary workforce
A smart contract establishes enforceable and immutable rights and responsibilities for all participants. Immutable contracts in HR, for example, may immediately release funds from escrow once employees complete assigned duties, reducing costs to employees and alleviating cash flow problems for businesses.
Compliance and regulations
Employees may simply enforce their “right to be forgotten” rights granted by legislation such as the EU’s General Data Protection Regulation (GDPR) by erasing the encryption key and rendering their personally identifiable information unrecoverable. HR will have greater power to use blockchain in the future to guarantee that workers have control over their data as more strict rules.
Companies using blockchain in HR
One of Japan’s largest employment service firms, Persol Career Co., needed a more efficient way to verify job applicants’ work qualifications. IBM Garage created a private blockchain ledger with IBM Blockchain technology that enables HR managers from a group of businesses and HR organizations to check applicants’ working history and performance while also allowing candidates to submit and share their resumes with select employers or across the network.
AWS Blockchain can also be a good example with its numerous use cases. Amazon Web Services’ AWS Blockchain is a blockchain project for on-demand cloud computing provided by Amazon Web Services to individuals, enterprises, and governments on a metered pay-as-you-go basis. The initiative began in the first quarter of 2019 and currently provides four solutions to its partners and customers. Amazon Web Services offers a ledger database if you need a central ledger that documents all application data changes and maintains an unalterable record of them. This database is fast, permanent, and cryptographically verifiable, so there’s no need to build complicated audit tables or set up blockchain networks. Suppose you want a permanent and verifiable ledger while still allowing multiple users to interact without the need for a trusted central authority. In that case, AWS provides a fully managed, scalable blockchain service.
No matter how useful the services of big companies like IBM or AWS are, blockchain-based HR startups may offer the most suitable solution for you.
HR blockchain startups
When Bitcoin became popular, the term “blockchain” entered common usage – a cryptocurrency that differs from conventional money in that it uses distributed ledger technology rather than fiat currencies. Since then, it has expanded into a variety of applications and is changing HR and workplace management processes all around the world.
Beowulf: Streamlining workplace communication
This 2019 startup uses a decentralized cloud network to simplify internal interactions in various business settings. Among its solutions are private corporate communication, distance learning, remote worker healthcare, and ready-to-use software development kits (SDKs) for specific communication features. The company also has its operating system to change how digital workplaces function.
Beowulf has several well-known clients, including the Vietnam University of Science, Asia Life Insurance Group (AIA), and the U.S.-based cybersecurity firm OPSWAT.
The BeSure Network: Validating workplace safety protocol
BeSure is a 2017 startup that aims to eliminate cases of unverified workers working in hazardous/hazardous environments. Its blockchain technology pulls auditable safety and compliance data from various sources, putting workplace safety on steroids for businesses. Managers (for example, factory floor supervisors), employees, and regulatory bodies can all access data safely.
To keep your business safe, the Sure Network offers smart contracts and automated data entry to make it easier. The system was launched last year and is now in beta testing with backing from multiple safety organizations in the United Kingdom.
Etch: Enabling instant payroll
Etch was founded in 2017 and is a blockchain-based payroll solution that allows individuals to receive pay at their leisure. The money is credited in ECH tokens, which are kept in a digital wallet. Employees can spend money at millions of locations worldwide thanks to the funds an employer deposits, and the Etch card may be used to access cash.
These are exciting times for HR tech start-ups. People process management is being revolutionized by new concepts such as blockchain, AI, and complex analytics. Blockchain, in particular, has now graduated from the incubator and is ready to be applied in real-world situations.
Like other things, implementing blockchain-based solutions to address some of the HR mentioned above issues will take time. Implementing blockchain-based solutions to tackle some of the HR problems will be a slow process.
The first wave, which will likely include blockchain-based candidate verification, is a simple use case. Another option could be real-time employee payments that are less spammy since we can manage our career profile.
The second wave of blockchain-at-work technology might focus on improving talent markets, enhancing the visibility of work, and workers and matches. It could also be about increasing market trust.
The third wave might be about considering the nature of the organization. If we obtain a larger liquid pool that can be utilized for projects, we will have fewer permanent workers with long-term employment contracts. So maybe we’ll see more autonomous organizations and a greater focus on networks of teams.
The good news is that we have the ability to build the next generation of digital workers, and there are certain blockchain characteristics we may include into our digital work platforms that might make things better.