When it comes to enterprise IT discussions, human resources (HR) technology has not gotten the same hype enjoyed by other technologies like blockchain, big data and the Internet of Things.
Despite being outside of the spotlight, HR technology has grown and improved steadily over the past year. A PricewaterhouseCoopers report showed that 73 percent of organizations have shifted at least one HR process to the cloud in 2017. Most users also report satisfaction regarding improvements in the services and support that HR technology vendors provide.
It’s no secret that workplaces and workforces are changing. Because of this, HR is now seeing new challenges arise in areas like automation, remote work, fraud and payments. As such, HR technology is now starting to look into emerging solutions such as blockchain technology to address these concerns. Known mainly as the technology powering cryptocurrencies such as Bitcoin, blockchains are now finding applications across a variety of business functions, including HR. There appears to be wide interest in a technology that provides decentralized, immutable and transparent record keeping.
For instance, Nick Macario, the CEO of the data exchange platform Dock, said, “Blockchain [technology] will impact every HR and recruiting system in the world. These legacy solutions are all powered by user data, which is currently centralized, creating fragmented experiences and inefficient systems. Blockchain [technology] will provide fresh, up to date, consistent data, which will move freely between apps.”
Here are three ways blockchain technology is proving to be an up-and-coming disruptive force in HR technology:
1. Fighting Credential Fraud
Despite the many ways organizations can validate applicants’ claims in their résumés today, many applicants still fib and embellish their credentials. Per Inc., 85 percent of companies have reported catching job seekers being deceitful about their applications. Blockchain technology can help thwart this by providing a means for credentials to be put on a transparent and immutable record.
Several universities are already exploring the use of blockchains to keep records of their roll of graduates. MIT, for example, launched a pilot program that gave select graduates the option to receive their diplomas digitally. Blockchain transaction records can be used to prove ownership of these digital diplomas. Having such mechanisms would make it easy to verify if one truly graduated from a particular institution.
A similar effort can be made for other professional details such as employment histories and even performance. Dock, for instance, allows users to consolidate their professional profiles and social network linkages and secure the information using the Ethereum blockchain. The platform allows professionals to effectively manage their professional online presence. It also gives them the confidence to share their credentials knowing that details can be readily verified through secure means.
Certifications and licenses can also be secured using blockchains. Accreditation bodies and licensing commissions could look into using blockchain technology to help minimize fraud and misrepresentation. The state of Illinois is already exploring the use of the technology for medical license issuance, for instance.
2. Facilitating Remote Work
Leading freelancing service Upwork reported that more than 57 million Americans were freelancing in 2017. More organizations have opened up to employing contractors to complement their full-time force. While there are already a number of services that support this ecosystem, there are certain aspects where blockchain technology can be of further use.
Blockchain-based job marketplaces are now gaining traction. For example, Ethlance offers a decentralized job marketplace that uses Ethereum as its blockchain. The service promises a zero-fee experience and charges only Ethereum gas fees for blockchain transactions. This is in contrast to most freelancing platforms, which charge fees to both employers and freelancers. Some even take up to 20 percent from freelancers’ earnings as their cut for facilitating transactions. These blockchain job marketplaces effectively cut out the middleman.
There is also much potential in the use of smart contracts to facilitate work arrangements. Smart contracts can be used to keep track of terms between employers and contractors such as scope of work, timetables and pay. Smart contracts can even be used to automate payments upon successful submission of work. This process effectively creates more trust between parties since the system assures their respective mutual compliance to the terms.
3. Paying Salaries Using Cryptocurrency
So far, only a few have taken on using cryptocurrencies to pay employee salaries. Japanese firm GMO Internet is among those already providing employees this option. For others, there is still a host of factors that prevents them from seriously considering the move. To start, there’s the volatility of cryptocurrencies. Unless the company does its business in cryptocurrencies, price fluctuations still make the move largely impractical.
However, in the case of remote work and cross-border payments, cryptocurrencies may actually be a valid alternative. Payments services like PayPal often charge high fees and disadvantageous currency conversion rates. Many offshore freelancers bemoan these charges since they are often the ones who shoulder the costs.
Cryptocurrencies, on the other hand, have minimal transaction fees. Even Bitcoin, with its relatively high transaction fees when converted to fiat, can still be cheaper than what remittance services charge. Cryptocurrencies can also clear much faster than conventional money transfers. If prices eventually normalize and if cryptocurrencies gain wider adoption in real-world transactions, there is a future for a crypto-powered payroll.
Enhancing Trust in the Job Market
While these efforts may seem to target improving specific areas of HR management, what they collectively bring is trust into the process. The use of blockchain technology to make credentials transparent could help change the culture of embellishment that has grown rampant among job seekers today. Organizations can benefit from this as they can readily get unbiased information about their applicants, allowing these companies to hire people who best fit their requirements.
The emergence of blockchain-based job marketplaces could also benefit job seekers as the transparency provided by the blockchains could create a more equitable market. Smart contracts could also help protect parties by guaranteeing the delivery of work and payments. Cryptocurrencies even offer a fast and secure way to transmit payments to offshore resources. By easing the concerns in these areas, employers and professionals could focus more on getting the job done. Trustful relationships allow for better synergies in the workplace.
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