Can Blockchain Help Improve Efficiency in HR?




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Blockchain and HR Department

Previously, we talked about how artificial intelligence (AI) and Blockchain can combine to shape multiple sectors. Can Human Resource (HR) also benefit from either of these emerging technologies?

Blockchain, in particular, can have a significant impact on how HR functions. Since the technology transforms how we exchange value online, its implications in talent management, recruitment and skill development are undeniable.

Discussions over the impact of Blockchain have already begun. When organizations such as the Society of Human Resource management start to ask questions such as “is HR ready for Blockchain?” you know it’s time to look deeper into ways through which Blockchain can be useful for the HR department.

What’s the fuss with Blockchain?

At its core, Blockchain is a distributed ledger. It also allows for transparency and secure exchange of value. You just cannot tamper with data on the Blockchain ledger. And in the same way, the internet revolutionized the way we exchange information, Blockchain is on track to transform how we exchange value.

Reports show that big companies like IBM and Microsoft are investing in Blockchain technology. However, we are yet to see the practical application of this emerging technology.

The blockchain is still in its early stages of development. Even then, companies that want to avoid the scramble that is inevitable in the coming years as the technology advances need to start now.

In this article, we will take that journey into discovering how Blockchain can impact your company’s HR departments.

Significant reduction in back-office overhead costs

Over the last few years, disruption has been the name of the game in HR technology. Experts predict that there is a good chance that this will continue. About two decades ago, discussions about the latest disruptive technologies for business would have focused on Internet Protocol (IP).

At the time, the internet’s IP was allowing businesses to share information on a global scale. Now, companies that want to stay ahead of the curve are looking into Blockchain. The reason is simple. The blockchain can remove the need for a back-office.

Basically, on a Blockchain network, there is no requirement for traditional components of a transaction such as receipts, purchase orders, and reconciliations. Settlements on the Blockchain are instantaneous. Studies show that companies that reduce back-office overheads can create billions of dollars in annual saving. This, therefore, means that Blockchain technology is ideal for companies that want to beat the competition.

Easy hiring

One of the areas with the most traction at the moment in terms of Blockchain’s impact on HR is hiring. When it comes to applicant verification, most recruiters will agree that hiring is a tedious but vital task for any business.

Blockchain’s record-keeping capacity can benefit both the candidate and the recruiter. How? Well, by providing a comprehensive and trustworthy record of employers and candidates. For instance, candidates can have their skill level, education and workplace performance on the Blockchain and recruiters can use advanced analytics and AI to match candidates to specific roles almost instantly.

Blockchain in HR Department

Better adaptation to cultural and behavioral changes

Several industry leaders believe that Blockchain can help HR adapt to cultural and behavioral changes. HR departments can do this by using Blockchain to update candidate records. Blockchain can also be useful in tracking general trends in the gig economy.

Studies show that younger people change jobs more often. Compared to their predecessors, most of them prefer a portfolio career. With Blockchain HR can adapt as well as stay ahead of these cultural changes.

Reliable background checks

Job candidates can have full control over their data the same way a bitcoin user has control over their bitcoin balance. This makes background checks easier for recruiters. For example, certifying bodies can verify candidate’s certificates on the Blockchain. This can make it easy for recruiters to conduct a background check. To get verification data on the Blockchain, the candidate can give the recruiter access to the certificate using a public digital key. With this, the problem of third-party companies providing inaccurate candidate or employee data can be a thing of the past.


Since the advent of Bitcoin, Blockchain has been synonymous with finance. However, as more companies transition into global entities with an increase in cross-border payments, a technology capable of streamlining the process is vital.

Intermediaries and other third-party players make global payroll costly and time-consuming. By cutting off the middle man, Blockchain can standardize payment processes and reduce expenses. Furthermore, experts say that Blockchain for pay is “not that difficult.”

Some companies in Silicon Valley are already using Blockchain based payroll systems for their cross border payments. The same can with other companies. The drawback would be the different regulatory issues from various governments across the globe.

Secure and Reliable data protection

The HR department in most cases is involved with a wealth of sensitive personal data. This comes at a time when companies need to comply with regulatory requirements such as the General Data Protection Regulation (GDPR). Furthermore, HR is also responsible for high-volume financial transactions that are vulnerable to cyber attacks.

With Blockchain technology and the use of consensus protocols, cases of fraud can be squeezed out with ease. Transparency and accountability can also be achieved. This is possible with Blockchain’s secure cryptographic encryption. The results will be better-prepared companies in the event of cyber attacks. Plus, Blockchain’s flexible data structure can help companies comply with regulatory requirements such as the GDPR.

To sum up…

There are only a few practical use cases of Blockchain in the HR department at the moment. However, most experts believe that Blockchain’s benefits are so high such that the technology will pervade entire businesses in the coming years. So far, what’s clear is that the implications of its use in HR cannot be ignored. Already, experts predict that Blockchain will come to HR in the next two years. For this reason, companies need to start thinking of how to include Blockchain into their HR functions. The next step is to create prototypes that can enhance efficiency while targeting the most valuable use cases.

What do you think about the impact of Blockchain in HR? Talk to us in the comment section if you have any questions or suggestion about Blockchain in HR.