Less than ten years ago the HR industry was buzzing with an exciting new concept known as “cloud computing.” We were talking about security and hosting and potential use cases.
Now that’s all old hat. Hardly anybody uses on-site servers anymore, and if they do it’s because they have specific, unique needs that can’t be met in the cloud. These days we’re talking about AI and chatbots and sentiment analysis for employee engagement.
Tech is evolving, and it’s happening fast. And just like with cloud, soon AI will be standard practice and we’ll all be racing toward the next big disruption. What is that disruption? It’s Blockchain.
Most of us are familiar with Blockchain as a concept, even if we don’t quite understand how it works, and we probably all know someone who has invested in Bitcoin or another cryptocurrency.
But Blockchain is bigger than cryptocurrency. A recent Deloitte article described it this way: “Blockchain is to value what the internet is to information.” It makes value available to everyone on an even playing field by making transactions secure and transparent.
Here’s a brief rundown of how it works (you can find more detail in this article):
Blockchain is essentially a database distributed across a large network of computers, or “nodes.” Every computer accesses the same information (sort of like Google Docs), so that when one person makes a change, the change is immediately visible to every computer in the network.
Every ten minutes, the information in the blockchain is reconciled and stored as a new “block.” Basically, it's a digital ledger entry that can't be changed.
Blockchains may be either public (open and accessible to anyone) or private (accessible via a “key” which is provided by the owner of the information).
Since the blockchain is stored across a distributed database of computers, hacking is almost nonexistent. Changing information in the blockchain would require the hacker to override the entire network.
Voila! You can store transactions securely, give access only to the people who need it, and virtually eliminate the possibility of corrupted data. Just imagine what that could mean for the rivers of data your HR office handles on a daily basis.
The most common applications of Blockchain today are in the financial sector, with cryptocurrency leading the stampede. Cryptocurrency acts as a kind of incentive for individuals to join the Blockchain network, but in order to see widespread usage of Blockchain for business we will need the collaboration of a large number of operators who share and follow a code of ethics.
It will take time to put a structure like that in place, but here are five ways Blockchain could transform strategic HR management once we’re there (just to whet your appetite):
Daniel Roddy of Deloitte Consulting told SHRM that he believes Blockchain will make “self-sovereign identities” a reality. That means employees will be able to control who has access to their personal information, including historical data, personal identifiers, and job credentials like degrees and certifications. All of this information could be verified and stored in the Blockchain, and candidates could provide a digital key to employers and potential employers as needed when they apply for a job or begin onboarding.
The flipside of that equation is that it would also be easier for employers to screen candidates and verify information on a person's resume when they apply for a job. Once a piece of information has been recorded and stored in the blockchain, HR could access that record with a digital key to verify job history, education, and personal details.
International payroll has always been somewhat of a bugaboo for HR. It can be an expensive and time-consuming process, but with Blockchain, global payments could be transmitted instantly at relatively low cost. Using cryptocurrency, payments could be transmitted without the need for a bank to act as a middleman, and then converted to local currency.
Blockchain will make it possible to create unique digital identities for documents and contracts. That means documents can’t be faked and they could be programmed with specific stipulations that execute when the criteria have been met.
Taking the smart contracts one step further, imagine a world where contracts could be verified and shared openly and where payment would automatically be rendered upon completion of the contract conditions. It would streamline the process of negotiation, invoicing, and payment, creating higher levels of trust among contract professionals and the companies they serve.
It’s exciting to think about the possibilities, but the truth is that the technology still isn’t quite ready for widespread implementation. It’s coming, though. And companies need to be prepared.
So what should you do to be sure your HR department is ready? Deloitte suggests 3 next steps:
Blockchain is gaining traction fast. Cloud computing became standard practice in just a few years, and we’re seeing the same thing happening with AI now. Blockchain is the new kid on the block (pun intended), but it’s coming faster than you think. Now is the time to start laying the groundwork by watching the technology develop, building your business case, and putting a strong HR technology foundation in place so you’ll be ready to jump on the Blockchain train early.
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