Innovative Applications of Blockchain Technology in HR
When we hear blockchain technology, the first thing that hits our mind is cryptocurrency. And why not? It is the base technology of the very first cryptocurrency, Bitcoin. However, blockchain technology has many other applications. Blockchain developers are now eyeing the human resources space and plan to improvise the sector manifold.
This article will discuss how a person with a blockchain degree is working on overcoming challenges HR professionals face in recruitment. It also highlights some of the innovative applications of blockchain technology developed by blockchain developers for the HR department.
Let’s move ahead with the article on the innovative applications of blockchain technology in the HR department.
Table of Content
- What is Blockchain Technology?
- How does Blockchain Technology work?
- Challenges faced HR department
- Applications of Blockchain in HR
- Plan of Action for CHROs For Harnessing Blockchain Technology
- Closing Thoughts
What is Blockchain Technology?
A Blockchain is a distributed ledger or database shared through computer network nodes. A blockchain keeps data electronically in a digital form. It collects information in groups called blocks. Blocks have a predefined storage capacity that, when filled, closes and links with other blocks to form a chain, hence the name.
The significant difference between a database and a blockchain is that the database stores information in table format. In contrast, a blockchain stores information in the form of blocks joined together.
The blockchain developer team says that the technology timestamps every block in the blockchain. When a block fills up, it is set in a stone, timestamped, and becomes a part of this blockchain.
How does blockchain technology work?
To know how to become a blockchain developer, it is first necessary to understand how blockchain technology works. The working of a blockchain is a multistep process. Before obtaining a blockchain degree, go through the steps below that represent blockchain technology’s working.
- An authorized person inputs a transaction into a block, and technology authenticates the information.
- A block is created for this information.
- Every computer node of the network receives this block.
- Authorized nodes verify the block and add it to the existing blockchain.
- The final stage of the transaction involves the distribution of updates across the network.
Challenges faced by the HR departmentrtment
The human resource department comes across many challenges. We have listed a few of those challenges for you:
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Talent supply problem
Recruitment and hiring of HR department face a significant issue of insufficient information of workers and inefficient matching.
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Labor cost
Intermediaries’ payment costs heavily on talent seekers even in an inefficient talent market. Besides freelancers, consultants, vendors, or end contractors receive payments after months. Such situations badly impact a business’s liability; some often face bankruptcy due to late payments.
Therefore, blockchain developer salary, is going to be high for the professionals working to remove such HR challenges.
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Candidate fraud
One of the major problems faced by recruiters is candidate fraud. Candidates often lie about their qualifications, experience, and other significant details in their CV.
Application of Blockchain in HR
The future of designing the next generation of digital workers lies in the hands of blockchain developers. They can add up some blockchain features to overcome these challenges.
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Background Check
Permitted applicants can acquire virtual credentials as tokens in a distributed blockchain network. These tokens store the applicant’s immutable work record. When prospective employers tap into this blockchain, they can eliminate fraudulent applications.
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Applicant Data
Employees’ data is encrypted and immutably recorded. Employers can access these data when shared with them in the tokenized format. Hence, they can gather all information on applicants.
- Smart Contracts
Blockchain developers can develop smart contracts that bind contract workers with businesses. These contracts create immutable rights and obligations for contract workers. In addition, such agreements can automatically release payments from escrow when workers complete the assigned tasks.
- Forget Information
Employees can exercise their right to be forgotten entitlement, delete the encryption key, and make personal information unavailable to others. Thus, even after obtaining a blockchain degree, you can keep it a secret and control your data.
- Money Transactions
Employers will no longer depend on banks or other intermediaries to process payments. Similarly, banks will no longer control money flow. Blockchain developers have developed ways to keep transactions encrypted and store them in the form of immutable data.
Plan of Action for CHROs For Harnessing Blockchain Technology
Blockchain developers have laid out many short, mid, and long-term actions that HR leads can include to ensure good positioning of the HR function. They can also follow and leverage blockchain evolution through a strategy with the following considerations:
- Approach
Plan a meeting with stakeholders and the IT department to review the potential of blockchain is revolutionizing the work environment. Assess its relevance to the present and future functional and enterprise business models. Analyze where blockchain can strengthen or improvise practical value proposition. Then, settle on a fundamental blockchain approach established on strategic or tactical relevancy to main operational functions.
- Blockchain Staff
Companies are ready to invest in the blockchain developer salary. However, there is a shortage of skilled and knowledgeable staff who can enable technology capabilities and components. In addition, how to become a blockchain developer should include understanding both blockchain and its application to upcoming business opportunities. Thus, companies must approach blockchain degree personnel who upskills their internal talent.
- Blockchain SWOT Analysis
Companies should undertake calculated research and development efforts to identify realistic use cases and learn how to support blockchain. Blockchain developers recommend companies, industries, or government agencies conduct operational risk meetings with CFOs and risk managers and develop a blockchain SWOT analysis. The HR department can learn a lot from pilot projects in finance and supply chain departments that carried out early experiments with blockchain technology. They can also explore the broader use of digital wallets, where employees can receive a part of their salary via digital assets – the prototype for leveraging blockchain abilities.
Closing Thoughts
Blockchain developers are trying to help HR get their organizations ready for a changing workforce. If you have a blockchain degree, you will know how blockchain technology can help them in a big way. Blockchain technology for HR is developed the same way as any new technology develops – by understanding the challenges faced by the HR community. Thus, constantly improvising this technology and making it more beneficial requires a regular connection between all the parties involved – the HR professionals, recruitment professionals, and blockchain developers. It can help revolutionize the HR sector completely.
Visit Blockchain Council to learn how to become a blockchain developer and finish certification programs for a blockchain degree.
