Human Resource Management Implications of Blockchain Technology

Disruptive innovations can change everything in the world. Through the use of “smart contracts”, blockchain has the potential to completely change the ways Human Resource professionals search for candidates, manage payroll and instruct workers.

In accordance Coinwire, the decentralized ledger technology known as blockchain was first applied to cryptocurrencies. On a more positive side, blockchain is a decentralized database of records that cannot be changed and shared in a way that is spread across multiple nodes. Immutability refers to the fact that information included in a block cannot be changed or removed once it is added to the blockchain.

It is expected that the human resource sector will adopt a kind of public blockchain network that does not need authorization to disrupt services in the human resource sector such as recruitment, payroll and training. There are many different applications that can benefit from using blockchain technology.

Employee selection by Blockchain

According to the findings of the study, on average, an organization suffers a loss of almost $14,900 due to a single “bad hire” (Ahmed, 2019). When it comes to the hiring process, there are two components that are sometimes misrepresented, and the following are some of the ways blockchain technology can help businesses.

Verification of identification The use of Blockchain will eliminate the need for conventional resumes and resumes The use of blockchain technology will eliminate the need for traditional resumes and resumes by using a new open platform that enables fast searching and matching. The data stored on the blockchain will be up-to-date and will include information about a candidate’s educational background, skills, honors and awards. Verification of recommendations is made easy by using blockchain technology.

Employment histories Blockchain technology has the potential to help companies reduce the number of cases of employment history fraud, which is often perpetrated by former employers who have previously investigated the information. The medical, pharmaceutical and legal industries, where the stakes are greater and human lives are at risk, are excellent examples of where this has enormous consequences.

Streamline repetitive duties

The use of blockchain technology has the potential to radically transform and significantly improve many of the day-to-day, mundane tasks of human resource management. Due to this streamlining, the productivity of HR managers will increase and they will now be able to concentrate more on other areas, resulting in cost savings for the businesses.

Keep tabs on payroll Despite the fact that virtually all payroll systems in large and medium-sized companies are currently automated, monitoring changes to the system, avoiding fraud, tracking time and attendance, payment options and benefits administration are possible ways to make the system more robust. With the use of cryptocurrencies as a means of payment for payments, the need for third parties such as banks and other financial institutions can be completely eliminated, resulting in increased levels of transparency.

Training: Blockchain technology has the potential to revolutionize both the way companies train their employees and the way people motivate themselves to learn new skills. When an employee completes a training course or obtains a certification, a new block can be added to the employee history. This block remains in place and can be easily validated in the future.

Smart contracts

Paper-based contracts, which now need constant and manual attention, are expected to be replaced with digitally enabled “smart contracts” in the near future. Contracts that use blockchain technology can be considered smart contracts. These connections set the parameters for transactions, as well as the consequences that would follow in case the parameters were violated. These are able to not only enforce the contacts, but also the extra simplified activities based on “if and else.” For example, if something like this happens, this salary will trigger under certain circumstances.

It is important that the code underlying the contracts is resilient, and it must also be taken into account that the activities facilitated by contracts cannot be undone.

The use of technology in human resource management comes with a number of advantages as well as disadvantages. Facts and transparency are made more accessible via blockchain technology, which is used in the recruitment industry. Technology in this context not only makes it easier for employees and employers to find each other, but also contributes to the development of trust between the two parties.

There are certain drawbacks or concerns that need to be addressed and they need to be addressed soon. One of them is to add “blocks” that include incorrect information or transactions, both of which are permanent. The other problem is that the technology is still in its infancy and requires more development. Concerns have been raised about the scaling up of blockchain implementation due to it not being fully implemented in any of the industries to the full extent of its potential. Last but not least, the company attaches the greatest importance to complying with the requirements of the GDPR and protecting the confidentiality of the data it collects. Due to the fact that it is a decentralized technology at its heart, the GDPR recognizes the existence of gray areas regarding the security of personal data. For example, any entity or individual has the right to remove personal information if it is fraudulently characterized as the “right to be forgotten”, which violates the premise of the blockchain ledger. This right exists regardless of whether the information was uploaded by the entity or the individual.

To summarize

In conclusion, Blockchain has the potential to act as a significant disruption in human resource management, despite the fact that it needs to be normalized in accordance with the demands and concerns of certain industries.