Find out how organizations may someday use blockchain in HR
Last year, a small number of universities, including MIT and the University of Texas, started to use blockchain technology to issue digital certificates — a move that could eventually profoundly affect the hiring process.
Blockchain technology is possibly best known for its connection to Bitcoin. The technology essentially is a ledger of records — such as monetary transactions, or potentially evidence of degrees, certifications and other qualification-related items a job candidate might want an employer to see.
Once a blockchain is set up, nobody really owns or manages it; a person could, for example, potentially establish a presence on a pre-existing blockchain system and use it to keep a record of their academic and non-academic experience, such as certification or enrichment courses, throughout their lifetime.
The individual wouldn’t necessarily be maintaining the blockchain record; universities, training providers and other official entities would upload documentation to the person’s blockchain as proof of, for example, program completion.
If the technology becomes a more widely used credential source, instead of having to request transcripts and other official documentation, job applicants would just need to send potential employers their private key — a password that, along with a link to their record, would let HR professionals access all the information the applicant’s blockchain record contains. (Identity is encrypted on the blockchain, so the information can otherwise be kept private.)
Because the blockchain record would include academic and nontraditional learning experiences, employers would get a chance to see a more robust depiction of a candidate’s abilities than a resume would likely offer — which could help HR professionals better assess whether or not the person would be a good fit for a role.
There are a number of other ways companies may be able to use blockchain in HR — such as:
Blockchain use could help prevent applicants from submitting false information
The technology’s structure is often cited as the reason it’s secure. Blockchain systems confirm items came from a legit source using identifying numbers that are associated with users.
Each item added to the blockchain is bundled with items the system previously confirmed came from an authentic source, which helps verify new items. Because that’s happening across the entire network for a number of transactions, blockchain is thought to offer more security than verifying information from a single database, located on one company’s server. Hackers can breach server security. Mistakes can be made when information is entered in just one place.
Blockchain could help streamline HR responsibilities
Programming actions to occur when specific conditions are met — the principle behind blockchain smart contracts — could allow HR professionals to automate a number of processes, such as transitioning temp-to-hire workers to full-time employees with a different pay grade after they complete a probationary hiring period. If integrated into a company’s HR management system, a blockchain smart contract could potentially trigger employee recognition program awards or additional benefits, such as extra vacation time, to be disbursed once an employee reaches a certain tenure or other level.
Payroll services may also benefit from using blockchain in HR
Reviewing invoices and issuing payment to contract workers, suppliers and other external parties can be time consuming. Organizations could potentially use blockchain smart contracts to ensure payments occur automatically when the work is complete; services are also available that offer a blockchain system-based platform employers can use to issue payments directly to short-term workers, eliminating the need for a bank to be involved.
For additional thoughts on helpful HR technology use practices, view our blog posts on technology used to enhance the employee experience; improving the way you recruit online; utilizing talent rediscovery software to find qualified candidates you may have missed and innovative ways companies are using AI in recruitment.