Blockchain is one of those programs that has figuratively, and literally, revolutionized the world. In addition to finding applicable use across nearly every industry — although it is predominantly being used in the financial services industry at the moment — this technology is at the forefront of technology.
If companies want to get ahead of the proverbial curve, they need to consider how they can deploy it in the HR department, especially when it comes to hiring new employees.
What Is Blockchain Technology?
Simply put, blockchain is a digital ledger of sorts. It was originally designed for the Bitcoin industry. According to BlockGeeks, this technology allows information to be distributed but not copied. Don and Alex Tapscott, authors of Blockchain Revolution (2016) define this technology as:
“At its most basic, the blockchain is global spreadsheet — an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
SAP provides a high-level explanation of blockchain and its uses, such as Bitcoin.
What Are the Benefits of Blockchain in HR?
According to Deloitte, searches for blockchain technology have increased by nearly 2,000 percent, making it one of the most desirable technologies for companies today.
Naturally, this technology has many benefits for the HR department. Namely:
- It involves disintermediation and empowerment. Thanks to blockchain technology, HR departments can transmit documents — often containing an employee’s sensitive information — without worrying about interception from a third party. Consequently, new hires can control what information they want to transmit.
- It is transparent and immutable. Simply put: when there’s transparency, there’s trust, which is key to new hires. Both the new employee hire and the employer can see what each party is doing. Immutable means that the documents can be seen but not altered, which preserves the integrity of the information being transmitted.
- It is cost-effective. Blockchain technology, according to Deloitte, “eliminates third-party intermediaries and overhead costs for exchanging assets. Therefore, blockchains have the potential to greatly reduce transaction fees.” Naturally, every business is looking for ways to increase efficiency and decrease costs, which makes this technology the perfect fit.
- It reduces waste. One of the most difficult things for HR departments to do is streamline processes. This can cause chaos and waste. But, by streamlining data processes into one system, blockchains reduces waste.
PWC acknowledges the significance blockchain has and will continue to have on Human Resources departments. As a result, the “ability to validate information could transform the way employee data is managed; information about qualifications, experience, medical and personal records and tax data can be created, securely stored and trusted by everyone in the chain.”
Blockchain is not the only technological advancement greatly affecting Human Resources in the past decade. Learn how organizations are Using Big Data for Talent Acquisition.