Blockchain in HR
Appropriate human resources presence can make or break any company. From payroll, employee development and sourcing new talent, this department is responsible for the company’s organizational wellbeing, as well as its institutional growth. However, current human resources practices are yet another aspect of modern business plagued by lack of trust, isolation of huge swaths of data, as well as an overload of middle parties. Given the nature of the modern, interconnected globe, many companies transcend borders in their activity, as well as in their hiring. In the recruitment process, both individual jobseekers and multinational corporations can be guilty of intransparency and fraud by easily hiding valuable pieces of professional information in order to leverage their position.
The danger of misrepresentation of information on a candidate’s CV could not be more real - a report by HireRight from the middle of the decade has estimated that up to 85% of surveyed employers have spotted lies on their candidate’s resume. By opting for storing professional information on a public ledger in the new era of blockchain recruitment, an employee, can be provided with a digital ID which will then store all valuable data about career trajectory, essential certificates, or even salary progression, easily accessible to potential employers.
As we progress into the future we can see more institutions including schools, governmental buildings and industries working together in order to provide clearer insights and transparency into the murky world of modern professional recruitment. They will do so by all providing their piece of information of a particular candidate’s journey to be stored immutably on a decentralized ledger. For example, during the educational process specific qualifications and grades can be imprinted on an individual ID of a student which is then stored on the blockchain. Opting for this early on will allow each employer to truly assess the educational progress of a candidate. Alternatively, a business entity can have its own ID where those applying can easily access vital business data, including honest labour turnover rates, Glassdoor-esque ratings, or key performance indicators. The more businesses and jobseekers choose to transfer their information on encrypted, widely accessible public ledgers of blockchain, the more the whole industry will also benefit from generating real insight and making better business decisions, while also helping to address societal issues such as gender wage gap, or real diversity.
Blockchain and Payroll
With the rise of decentralized workforces, specialist agencies and freelancers, many companies lose a significant amount of capital processing payroll overseas. With an army of intermediaries including banks and payment platforms, most are quick to capitalize on transfer fees and even the most minute of changes in exchange rates. Opting instead for a blockchain-based payroll system could help companies save key resources when distributing their salaries and satisfying outstanding cross-border invoices by handling all exchange mechanisms on a decentralized ledger that bypasses third parties.
It’s also easy to envision how hiring freelancers and managing contractors can be improved with the use of blockchain HR and especially smart contracts. A quantifiable verifiable smart contract can for example be agreed upon between a one-time contractor and a company, with the payout happening automatically once the job is complete. This technological tweak has exponential capabilities for improving the growing demographic of self-employed professionals and freelancers who offer their varied skills in the open talent economy of today. With the use of a decentralized, globally spanning payment network, we can also foresee how not only capital will be saved but also productivity will increase, if we consider how blockchain can be used to automate and reduce the burden of routine, data-heavy process such as VAT administration.
Blockchain HR can have radically beneficial impact on many aspects of this crucial department. On one hand, it can help out by automating and securing many of the mundane processes including payroll and tax documentation. Whatismore, the immutable, responsive aspects of a decentralized ledger can bring a new level of transparency and decision-making to recruitment, which can benefit both the corporation and the individual.