22.07.2022 Human Resources Tech

Exploring blockchain applications in HR

HR blockchain

Authenticity verification, paperwork, compliance represent some of the challenges for the human resources department. As blockchain proves to be efficient and complementary in daily tasks, it has the potential to revolutionize the way human resources professionals work. Let’s dive through blockchain applications in HR!

A quick reminder on blockchain. To be clear, a blockchain refers to a distributed database – also called ledger – used to store and interlink data electronically in blocks in digital format. It essentially helps maintain a secure and decentralized record of transactions, which thus automatically generates trust among the stakeholders. Now, how can this benefit the HR department?

Recruitment processes can be time-consuming, if not challenging, for HR professionals as they have to go through a certain number of CVs. The latter is a long process as every credential appearing on a CV has to be verified, so as to ensure the candidate’s legitimacy. And this is when blockchain technology comes into play. Blockchain enables recruiters to rapidly and instantly access any applicant’s history all in one place.

Since blockchain is reliable and transparent, recruiters can be ensured that these data credentials are trustworthy. Hence, the gathered data encompass diplomas/certificates, contact information, previous work experiences, any appreciations, among other relevant information. In consequence, blockchain can help recruiters gain precious time and make better decisions in their hiring process.

As of today, most companies still rely on paper contracts. The introduction of “smart contracts” will eradicate traditional contracts as we know them so as to make them seamless. Once a smart contract’s preconditions are entered, it is instantaneously executed. Also, if payroll conditions are completed on the smart contract, salaries and promotions are automatically transferred to the employee. This can be achieved through biometric (fingerprints or iris check) data storing regarding each employee’s attendance.

On the human resources department side, this clearly facilitates the management process in terms of attendance verification. On top of this, it also enables them to save time on administrative processes, such as the data on new contracts, tracking the number of employees, or any tax-related processes.

Although blockchain technology presents various advantages, it still requires time to be fully adopted in HR daily tasks. Moreover, blockchain technology alone is rather limited and, to reach its full potential, would need to be combined with other technologies, such as AI or machine learning.