Most people would easily associate the term ‘blockchain’ with cryptocurrency, but it is no longer confined solely to the digital currency. In fact, the technology has immense potentials in changing the ways the Human Resources operate.
Blockchain technology has been widely adopted and implemented by various companies on a global scale across industries. Its capabilities are being studied and extended to sectors such as healthcare, fashion, logistics, and a lot more.
It wouldn’t be long until the human resources and recruitment processes are going to be streamlined with this amazing technology.
So how can blockchain contribute to HR management sector? Here’s how:
1. Protection from cyber criminals
Human resources management deals with sensitive data. Payroll, banking, health insurance, and disciplinary records are among data received and stored by HR department. This information is at a huge risk of being exploited if no proper measures are taken to protect it.
Blockchain can block access to these data from cybercriminals. In fact, global audit & consultancy firm Deloitte believes that Blockchain has a huge role to play in the coming years.
Records stored on blockchain are decentralized, so hackers cannot access and corrupt this data. Moreover, any changes that are made will have to be authorized and verified with blockchain.
2. Transformation of recruitment and hiring process
Current conventional methods for seeking candidates’ information through pre-hire verification are painfully slow. Not to mention, the process is prone to inaccuracy and fraud. The major problems faced by HR managers include:
If employee records are stored on the blockchain, then applicants can offer their potential employers permission to access their blockchain-based employment data. This could include educational records, letters of recommendation, employment history, and so much more, thus making it easy and transparent for recruiters to conduct the screening.
3. Smart Contracts
It has been reported by CompTIA’s 2017 research that only 45 percent of the companies adopting blockchain technology is implementing smart contracts within their firms. Having smart contracts between an employer and its workforce would enable workers to get paid automatically, thus allow the distribution of wages to happen almost instantly, with no risk of frauds or delays.
Blockchain technology can be used for storing biometric data such as iris scans or fingerprints for record-keeping and for maintaining legal ID. This technology can be utilised for storing employee data and tracking attendance and expenses for wages and claims made.
Human resources could utilise real-time data to avoid any disputes or inaccuracies in records. This way, Blockchain can strengthen the element of trust in payment authorisation, thus decrease frustration and mistrust.
5. Auditing & Compliance
49 percent of companies that are already implementing blockchain technology use it mainly for compliance and for the purpose of auditing. With validated and accurate data stored on the blockchain, audit checks for compliance would be visible to those authorised and would also be easy to conduct. Blockchain technology would free up resources and time required to focus on core business objectives and goals.
See also: Cryptocurrency Challenge for Businesses
6. Targeting productivity gains
Enhanced ability to match employees’ skills as well as performance in jobs is proven to be a great asset to HR managers. Unfortunately, some companies are still lagging behind when it comes to managing their productivity gains. In this regard, blockchain technology can benefit small and medium-sized enterprises.
7. Mobility and cross-border payments
Blockchain can significantly benefit multinational businesses with the ability to create their own corporate currency which is blockchain-based. They can use this to transfer value across their business globally.They can carry out transactions globally, free of cost and friction.
8. Marketing & Advertisement
As per Juniper Research, advertisers may lose roughly $19 billion to fraudulent activities per year. This figure represents advertising on mobile and other online devices, which is projected to touch $44 billion by 2022.
“Click fraud” can be reduced in a dramatic way by utilising blockchain technology. This can ensure advertising and marketing executives reach their target markets with much ease.
The principles of blockchain are developed to prevent banking fraud. By using a system for monitoring the budget, advertisers can keep a tab on their investments right from initial transfers to the final publication. This can lower the risk of underperformance and overcharge.
9. Tax Information
The blockchain database is one of the safest and most reliable ways to store and track information. This database can be used to store vital information pertaining to income and purchases made. It can make it easier to track accurate corporate tax information. Even filing of taxes becomes easier with blockchain.
10. Automating taxes
Automating taxes and making them accurate is one of the greatest advantages of embracing blockchain technology for businesses.
The annual tax burden seems more like a headache for both employers and the workers, right from write-offs to estimation of taxes.
Meticulous tracking of expenses needs to be done to make deductions by saving receipts, which can be a frustrating experience. This is where blockchain can simplify the lives of people.
It is an accountable and fair system which lets nothing slip through the cracks, and thus, it can help track income and purchases, and reset tax rates accordingly.
11. Streamlining routine tasks
Blockchain makes everything efficient right from tracking payroll to issuing paychecks. The technology lets organisations send and receive funds in a secure manner almost instantly anywhere in the world. It can also cut down everyday tasks of managing contracts by implementing smart contracts automatically.
Blockchain technology has immense potential to transform the human resources management sector in a significant manner. Appropriate application of this technology can work wonders in increasing security and streamlining day to day activities of the HR team.
Aditya works as a Growth Assistant at AirTract.Com, a go-to place for all expert advice wherein people ask questions, write articles, share knowledge and experience. He has a Bachelor’s Degree in Computer Science Engineering and has been working in the field of Digital Marketing for the past two years. He is also a voracious reader and a big sports fan.