“Blockchain” has become more than a buzzword in the past two years or so, as it continues to gain more influence in corporate settings.
A blockchain is a decentralized “chain” of immutable electronic ledgers that hold “blocks” of transactional data. Anyone has access to this information and can participate in and monitor a blockchain network. However, participants cannot change the information contained in blocks as they are encrypted to turn the data into indecipherable character strings.
In the context of work and employment, a blockchain can effectively remove bias among employers when it comes to candidate selection. Applicants, meanwhile, cannot inflate the importance of past achievements, much less falsify entire work histories. And in terms of corporate policymaking, a blockchain ensures that employees are treated fairly and have access to reliable tools and information to do their jobs well.
The following section presents just a few benefits of blockchain technology on human resource (HR) planning and operations management.
Better Hiring and Employee Retention Practices
With easy access to a blockchain-enabled credential database, HR practitioners will find it convenient to conduct background investigations on applicants. They can protect their organizations from liabilities without having to call their applicants’ former employers and such. Applicants, meanwhile, don’t have to go through the tedious process of filling out forms.
Another benefit is that a blockchain promotes fairness concerning incentivizing employees. It does away with traditional testing and interviews to keep biases from seeping in.
A blockchain can specifically help with the following HR activities:
- Quick and nonintrusive background checks: HR employees need only to rely on a database to validate an applicant’s identity or educational records.
- Resume verification: Blockchain-based curriculum vitae (CVs) cannot be modified at a later time. This capability prevents job hunters from forging or embellishing their employment details.
- Effective job matching: Skillsets, smart contracts, and work histories—all good and bad—can be recorded in a blockchain. HR representatives can depend on this information to gain insights into the abilities and characters of the persons they wish to hire.
- Objective employee evaluation: Standardized assessments and benchmarks for promoting employees may become moot when a blockchain is introduced.
Improving Communication and Cross-team Collaboration
Operational inefficiencies cost businesses around 20–30% of their annual revenue, according to International Data Corporation (IDC). Blockchain use may be the solution to change all that by improving internal workflows and processes. Blockchain technologies, for instance, can support goals related to:
- Validating tasks and orders from higher-ups: Nothing is lost in translation with a blockchain. Blockchain databases track task assignments, especially during crunch time or even in life-threatening circumstances.
- Seamless sharing and cross-referencing of critical data: Blockchains can positively impact organizations where data can make the difference between life and death. Healthcare providers, for instance, can use a blockchain system to streamline the exchange of medical data for treatment strategies and insurance claims, among others.
- Reducing risks and security incidents: The blockchain architecture is, by nature, impenetrable to cyberattacks because of its use of cryptographic hashing. Sensitive data at rest and in transit is kept safe, unlike in traditional storage devices. Disruptive hacking incidents are impossible, if not rare, with blockchain use.
Doing Away with the Middleman
Blockchain use eliminates go-betweens, which leads to higher transparency and trust between stakeholders. The same can be said for organizations and their customers. For instance, blockchain technology can help with:
- Significant cost reduction: Vendors can save money on the transfer of goods and services to their customers. They can keep track of the process through a blockchain to find out if there are potential issues, such as mishandling or theft, along the way.
- Enhanced privacy and data protection: Through blockchain frameworks and apps, consumers can know how marketers use their information.
- Better supply chain transparency: With a blockchain, providers like artists and farming coops, as well as marketers and third-party vendors, know where they stand in the supply network. They know how much products and services cost and how much they’re supposed to earn from them.
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“The potential for blockchain to become a new open-standard protocol for trusted records, identity, and transactions cannot be simply dismissed,” Mckinsey & Company noted in a report last year. Indeed, blockchain has the potential to transform all corners of society.
As the examples show, blockchain technology has the power to revolutionize outdated employment and operational models. After all, it’s high time to evolve these models, as organizational structures and work arrangements rapidly shift.
However, some regulatory oversight may be required before blockchain use becomes a norm for most organizations. Until then, it’s realistic to assume that the technology won’t become a significant player in this space just yet. It does offer a lot of promise, though.