“Is HR ready for Blockchain?” It’s about time HR professionals looked deeper into the usefulness of Blockchain Tech in the HR department. Blockchain technology is a distributed ledger that has transformed the exchange of information through the Internet. The impact of Blockchain in HR functions, mainly recruitment, talent management, and skills development are indisputable.
At its core, Blockchain allows for authenticity and a secure exchange of value. You cannot tamper with records on the Blockchain ledger. The Internet has dramatically transformed the exchange of information over the years. Similarly, Blockchain aims to change how we exchange value.
Corporate giants Microsoft and IBM are already invested in Blockchain technology. However, the practicality of this emerging development hasn’t been felt by most midlevel companies we are yet to see the practical application of this emerging technology.
In this article, we demonstrate how Blockchain can influence your company’s HR departments
Pros and Cons of Using Blockchain in HR
1. Considerable Reduction in Back-Office Overhead Costs
HR disruption has brought about significant changes in the profession, with board recognition; HR managers can now give their input and make meaningful decisions at the round table. Similarly, HR technology allows businesses to share data on a global scale. Companies that embrace Blockchain no longer require back-office assistance.
With the arrival of the Blockchain network, you do not need the traditional tools of formal transactions such as fiscal receipts and bank reconciliations. You can now make instant settlement on the Blockchain. Companies that have adapted to this development have reported millions of dollars annually.
What does this mean for your business?
It proves that Blockchain technology is the future of business transactions for companies ready to break the chain of formalities and lots of unnecessary paperwork ideal for companies that want to beat the competition.
2. Easy Hiring
Employee turnover is one of the most challenging areas that HR deals with every often.
Blockchain’s impact on HR hiring minimizes employee traction through applications’ verification process to eliminate unqualified hires and bring in only what the business requires in terms of quality, job specification and job requirements when it comes to applicant verification. Most recruiters agree that hiring is a tedious but essential task for any business.
With the new technology in HR management, the efficient record-keeping capacity proves quite beneficial to both the candidate and the recruiter – by providing a complete and reliable record of employers and potentially qualified candidates.
For instance, qualified candidates can place their resumes detailing their education, skillset, and workplace performance on the Blockchain. Recruiters, on the other hand, can use advanced Artificial Intelligence and analytics to match the right candidates to specific roles as required instantly.
Studies reveal that Millennials and Xennials stay at jobs for a minimum of two years, and they want to move to the next big thing. The young generation prefers a portfolio career rather than a lifetime specialization at one or two jobs. With Blockchain HR, managers can adapt to these trends and stay ahead of the cultural changes.
3. Reliable Background Checks
Job candidates have complete access and control their saved data similar to bitcoin users’ control over their bitcoin balances. This makes it easier for recruiters to perform background checks effectively. Professional bodies can also verify candidates’ certificates on the same platform.
To have recruiters verify the certificates, a candidate must give authorization codes to access the documents on the Blockchain using a public digital key. This technology eliminates third-party companies that provide inaccurate data to recruiters.
We’ve witnessed how Bitcoin has revolutionized global currency without leaving any paper trails. And for the most part, it is embraced by top financial institutions. Similarly, since the advent Blockchain is synonymous with finance. As companies shift towards global entities, cross-border payments become inevitable, and Blockchain technology helps to streamline the process of payments with faster, reliable paying systems.
Intermediaries and third-party partners make global payroll extraordinarily costly and time-consuming for businesses. Blockchain cuts the middleman by eliminating overheads and standardizing payment processes. Users of this technology confess that this technology “not that difficult.” The only possible setback is government laws that differ across the board.
5. Data Protection
The HR department maintains and stores a wealth of sensitive data. In line with the regulation of data protection, companies need to comply with the General Data Protection Regulation (GDPR). In this regard, HR is tasked with securing the high-volume of records that are prone to cyber-attacks. Blockchain technology handles such instances with ease and security of the encrypted storage platforms.
Although BT (Blockchain technology) has received numerous applause and praise in the media fraternity, it has its challenges, and you cannot ignore the core problem areas – some technical, others environmental, and a little bit of common sense.
Here are some red flags to consider for Blockchain adopters to reflect on.
The underlying blockchain technology lacks fundamental and universal protocols that made the Internet collectively accessible (HTML, and TCP-IP, etc.). Its promise of decentralized transactions without third parties and intermediary authority stands untested therefore amounting to an experimental, idealistic pipedream.
Without a sound business model- Blockchain still works, but it’s untested and therefore not reliable.
1. Blockchain Computing System
The blockchain storage system works in the same way a standard computing system works. It verifies transactions following the same protocols and performs similar operations, records data into a blockchain – which, in essence, works the same for other computing systems.
“There is no paralleling, no synergy, and no mutual assistance. There is only instant, million-fold duplication.” A blockchain user says.
2. Extreme Volatility
Blockchain technology faces extreme volatility. A perfect example is the fluctuating Bitcoin prices from day to day. Extreme fluctuations come from the distributed blockchain technology and the cyber currencies that are new to the market. Therefore, all stakeholders adopting to BT will experience the volatility.
Blockchain technology is relatively new to the market and still a hot cake within the IT community. Because it also relies on virtual currencies, hackers and internet users have found a way to bypass protocols and use unauthorized transactions.
A good example is the digital anonymity that exists in decentralized Blockchain and virtual currencies, which have become a target for all illegal transactions.
“Silk Road,” is an excellent example of a darknet market where internet users visited to make illegal blockchain-based transactions. But it was shut down by American Authorities; nonetheless, internet users continue to defraud decentralized technology for its lucrativeness.
4. The problem for Regular Internet Users
Storing Blockchain-based virtual currencies is a tough call for the non-tech savvy folk. This technology only benefits people that understand its use and how to save millions of dollars in annual savings with Blockchain technology.
If you do not know how to navigate the Bitcoin currencies, you will face challenges creating a bitcoin wallet and securing your wallet in safe-cold storage. Therefore, this could be a potential problem as eavesdroppers target cryptocurrency exchanges.
At the moment, only a few companies have adopted the use of Blockchain technology. Experts hope that the benefits of this technology will eventually spread and become profitable for all users who embrace it in the future.
So far, the implications of its use in HR cannot be ignored. Companies must, therefore, adopt Blockchain into their HR functions to enhance efficiency in all critical services of the department.