When we think of blockchain, bitcoin is the most obvious name which pops in our minds. While bitcoin is the most prominent cryptocurrency that has managed to skyrocket beyond the $14,000 threshold, blockchain technology has tremendous potential besides only powering cryptocurrency.
Blockchain is going to completely transform businesses from all walks of life, this includes finances, tax liabilities, cross border payments and even payroll generation. In other words businesses which will benefit the most from blockchain technology involve processes which are slow, labor intensive and expensive due to the significant amounts of data collection required.
This inadvertently includes many HR tasks which were previously part and parcel of the job such as payments and money transfers. Human Capital Management software have already replaced many parts of human resources, such as recruiting, onboarding, compensate and even termination in a systematic and automated process which is entirely handled by a software.
What makes blockchain so useful over existing software?
This will make many ponder why blockchain technology will be preferred over existing HCM software. The answer lies in the innovative brilliance of decentralized virtual ledgers. Every record in the distributed ledger has a unique cryptographic signature which makes it an authentic historical record of all transactions which have taken place in a network. It’s a guarantee against any tampering made to the original data.
Cyber security and the overlap with HR functions
Given the voluminous data HR has to deal with on a daily basis, dabbling on sensitive financial information, blockchain will become substantially useful. The use of consensus to establish the validity of the truth can help separate fact from fiction, which means that fraudulent activity could be completely halted. Recent trends do highlight a disturbing rise in cyber attacks that rely on lapses in network security which can easily compromise the integrity of sensitive information.
Targets productivity
Blockchain targets productive workers and allows proper segmentation of workers in the office. The data generated on blockchain will match worker’s skills and abilities specifically to those jobs which would result in a higher productivity. It will also help small and medium sized enterprises (SMEs) with the recruitment process.
While larger businesses have both a well placed HR department and a bigger pool of candidates to choose from, the task is more complicated for smaller businesses. Blockchain helps to reduce this administrative burden on SMEs so they could focus their efforts on satisfying the customer and growing the business.
Cross border payments
Bitcoins and similar cryptocurrencies have proven that it is extremely feasible to exchange items of value over internationally, reliably and cost effectively. Contrast this with traditional multi signature processes systems which include cross border expenses which can make transactions a pricey ordeal. Blockchain can help replace these cumbersome systems and also ensure that employees remain obedient to rules of taxation which vary across different jurisdictions, cities and countries.
The future for HR most definitely lies with blockchain technology, particularly because companies like Microsoft and Google are jumping the blockchain bandwagon and are offering Blockchain as a Service (BaaS).
