A few years ago, only a handful of companies employed blockchain developers. Today, blockchain knowledge is one of the hottest tech skills on the market. Human resources professionals might think their relationship with blockchain begins and ends with recruiting tech-savvy employees. But as more HR-focused blockchain tools hit the market, that won’t be the case for long.
Blockchain is a public, decentralized ledger of records, or blocks, that are linked together on a network using cryptography. It’s a secure way to store information or transactions between two parties. Bitcoin was the first innovative use of blockchain technology.
Blockchain tools can help HR pros handle all sorts of tasks. From identity validation and background checks to referral systems and payment processing, blockchain technology offers an incredible variety of improved tools for HR departments in the know.
Not every office task needs a blockchain fix, of course. The World Economic Forum published a useful guide to help executives decide which challenges might benefit from blockchain-powered solutions.
With so much to learn about this emerging technology (and the changing regulations surrounding it), HR professionals must find balance to leverage the power of blockchain without crossing the line. Keep an eye on these four areas of blockchain and HR over the next few years:
1. Ironclad Identification and Credentials
Soon, the most effective security protocols could also be the simplest. By creating systems that appear simultaneously open and opaque, blockchain tech can provide maximum security in both the physical and digital worlds.
One company, ShoCard, already makes this possible. Users can create IDs in the ShoCard app, including sensitive documentation, and then the app hides their personal information so no one can access it without the user’s permission. With that done, users can share necessary identification information with employers or other third parties, like banks or utility companies, quickly and easily. The information is shared with only those authorized by the user.
2. Painless Payment Processing
Most of the talk around cryptocurrency centers on its role as an investment tool. In some cases, however, digital currency options could help companies pay their employees more directly, eliminating middlemen and allowing workers to keep more of their own money. Solutions like this could appeal to businesses with foreign employees or employees without traditional bank accounts.
WorkChain.io, for instance, accelerates the payment process by giving workers access to their funds as soon as they complete tasks for their employers. The companies paying the wages, meanwhile, don’t have to deal with payroll processing fees. Employees retain more control of their money, companies spend less, and both sides enjoy a better partnership.
3. Remote Hiring for Real Workers
Remote workers are common, yet remote hiring processes continue to give HR departments fits. New smart contracts on the blockchain allow companies to complete the entire hiring process anywhere, at any time.
Smart contracts are bits of code that execute commands automatically when external conditions provide the go-ahead signal — without the need for either party to tell the program to do anything. Horuspay, a payroll blockchain company, gives businesses an option to work with payroll vendors anywhere in the world. When one side completes a prerequisite task, the system enforces the next steps. Blockchain makes agreements with third parties more secure, more private, and more affordable.
Related: Why the Future of Work Is Remote
4. Smarter Candidate Matching
Today, candidates and companies typically find one another on job boards. That could soon change, especially as more businesses turn to contractors and freelancers to fulfill their needs. New blockchain technologies can gather data from potential workers and companies looking to hire and then match the sides so each can deliver what the other needs.
Fortunately for recruiters, blockchain already offers many of these advantages. HireVibes helps job seekers by connecting them with companies that need their skills. Unlike other recruitment mediums, HireVibes shares referral rewards with chosen candidates. Peer-to-peer referrals build HireVibes’ “decentralized autonomous community.”
These four areas will see some of the biggest leaps in blockchain over the next few years, but several other HR functions will also see improvements. Portable private information, efficient communication processes, cheaper alternatives to longstanding fee-first functions — the time for disruption is ripe, and blockchain will be the vehicle upon which that disruption arrives.
Eager to learn more? The Society for Human Resource Management provides more information for anyone who wants to learn more about blockchain’s functionality and potential. Next, check out what Ashik Ahmed, co-founder and CEO of global workforce management platform Deputy, thinks about the future of blockchain in taxes and LinkedIn.
Not a blockchain expert yet? Don’t worry — most companies won’t start asking HR departments to engineer software anytime soon. Keep up with HR and tech publications, think about processes that could use some improvement, and talk to company leaders (technical and otherwise) about the potential benefits of blockchain and HR.
Peter Limone is the president and CFO of Innovative Employee Solutions (IES), a leading nationwide employer of record that specializes in payrolling and contractor management services for today’s contingent workforce. Founded in 1974 in San Diego, IES has grown into one of the city’s largest women-owned businesses and been named one of its “Best Places to Work” for 10 years in a row.