Blockchain & HR is the Future: You’re Absolutely Setting Yourself Up for HR Failure If You Don’t Do This
Wait – Before you accuse me of fear mongering or hyperbole.
I am dead serious.
I have seen quite a few concepts generate hype in my time.
Big Data – boy that was one!
But I am willing to go out on a limb and reiterate – you are setting yourself up for HR failure if you haven’t started learning about Blockchain and its potential benefits to talent management in your company.
Blockchain is Like the Printing Press, Engine & The Internet
I am borrowing liberally from my favourite Blockchain expert Richie Etwaru here but I am pretty sure he won’t mind!
Once upon a time knowledge was considered the domain of the privileged. Only a blessed few had access to the written documents available and were proclaimed “enlightened”.
Then the printing press came into the picture. Boom – it gave birth to books and anyone with two eyes and a sound mind could learn more than the sages and diplomats of old.
The same happened with the engine. Let’s face it – depending on horses was kind of “unscalable”. But power became the currency of the modern world when coal, diesel and petrol started fuelling everything from cars to factory equipment.
And last but not the least – the internet. What started out as a hobby project for the technically inclined is now considered as basic as food and water. And it has shrunk our wide world to fit our laptop screens.
Many do not know this – but Blockchain is that next big thing
The thing is, whenever human progress is stalled by a gap or a lack – something game changing and paradigm shaking is invented.
Many do not know this – but Blockchain is that next big thing.
It is all set to revolutionize the way we trust by eliminating chances of fraud, forgery and lies from all value driven transactions.
Blockchain Powers Bitcoin & Ether
Both have created quite a stir because they are cryptocurrencies or virtually untamperable digital currencies that have proportionate value in the mainstream global economy.
They are relatively stable, don’t require third party commissions when paid by the holder to the recipient and most importantly there is little chance of fraudulent transactions because information about “value transfer” or cryptocurrency transfer is maintained and updated by an entire distributed network of nodes.
Bitcoin and ether are already challenging the status quo of cash and banking systems. And more than 100,000 providers now accept payments in Bitcoin. Perhaps the greatest testament to the robustness of Blockchain lies in the fact that it is the technology powering what can be best described as the popular digital counterpart of economic assets.
There are many jargon heavy articles online and I could copy a few lines from them. But to the uninitiated – it would be gibberish. And I want you to truly understand and appreciate the importance of Blockchain.
In a nut-shell Blockchain is a de-centralized, distributed ledger of value transactions in which each record is dependent on the records that precede it, thereby creating a chain of validity which is extremely difficult to tamper with. (It gets simpler…read on)
Let’s consider an example here.
You want to hire a candidate for a sensitive position. One that requires a very specific set of skills. And there’s no single certification that can deem an individual qualified to handle the responsibilities. The learning needed to excel is earned as the candidate works on diverse tasks with various employers and is also pieced together from workshops or independent MOOC tests.
Yeah – one of those amorphous cases.
There is scope for lots of creative “story-telling” by applicants and you won’t know for sure – till your recruit actually bombs or performs well.
Wouldn’t it be nice if with one click of a button you could hold a conference with every manager who has ever overseen the candidate and actually get a green tick against the references? If they agreed that the records are true – you could hire the candidate feeling a lot more confident.
Right now this sort of reconnaissance is either too tedious or just plain impossible.
And that is where Blockchain comes in.
In a Blockchain setting, the applicant’s resume would be a series of blocks – each containing certificates, appraisal reports or recommendations from employers. As the candidate matured he would have more and more blocks appended to his identity.
The Blockchain and HR marriage is already being planned in earnest
The content of each block would be inserted by an authority figure – the company or the manager in charge of the individual. This ensures the verity of the records when they first enter the block. Once value is added, it is also encrypted to further discourage tampering.
But that’s not it. Every time a new block is added to the resume, it builds on the foundation of the existing blocks and carries their essence within itself. Result? It is almost impossible to make changes to one without impacting the others.
Now imagine copies of these blocks are available to everyone – all managers and companies and recruitment agents. Even if a persistent applicant made changes to his Blockchain, they wouldn’t be relayed to the other chains in the network and the anomaly would be detected as soon as a consensus happened.
There are four main characteristics that sum up Blockchain:
1. Decentralized – In Blockchains value doesn’t reside with one intermediary – like a bank or a recruitment agent. Because of this feature, forgery and tampering are deterred. Anyone with malicious intent would need to change thousands, potentially millions of copies of data. Not fun!
2. Distributed – Since any individual with internet access can “host” Blockchains using a computer, if a few nodes do stop working, the entire system doesn’t crumble.
3. Credible – When value first enters a block, it is inserted by someone who has the least chance of introducing a deliberate error or omission. Going back to the resume example managers would add the certificates and performance reports to the blocks. Good luck with getting them to rate you higher than you deserve.
4. Encrypted – The concept of having sensitive information in open computers may not sit well with people. But each block of a Blockchain is encrypted, reduced to a meaningless sequence of numbers and can’t be deciphered without a key. This key is passed on from the owner of the Blockchain (the one who is looking to be trusted) to the recipient of the Blockchain (the one who’s looking to trust).
There’s a lot of technicality involved in the Blockchain perpetuation process.
But as with most great technologies, you don’t need to bother about the nuts and bolts. You can simply leverage it to change your world.
Why is HR Crying Out for Blockchain?
It’s estimated that Blockchain can save businesses up to $4 trillion globally. And it’s all due to the fact that with Blockchains, there is no need to verify records, reconcile accounts or manufacture trust.
Pop quiz. Which vertical of a business has the most labour-intensive processes, the highest incidents of administrative drudgery and the sorest lack of trust? Yes, you got that right – the department that deals with volatile humans – HR.
Adopting Blockchain will not be a walk in the garden
With the peer-to-peer backbone of Blockchain Human Resources can digitize data, ensure its integrity, make do without cumbersome reconciliations and spontaneously spot errors or falsifications.
The refrain of “HR is lagging behind” is justified. Most companies do not want to change the way they vet, onboard and retain talent because they are reluctant to give up what’s worked in the past.
When you put a name and face to data, it is suddenly a lot more difficult to embrace abstract innovation.
The pressure to stand out in a sea of applicants may tempt job seekers to be less than honest on their resumes
Adopting Blockchain will not be a walk in the garden. But it doesn’t force employees to alter their behaviour and neither does it impact company talent’s interpersonal dynamics in any way.
It simply streamlines and expedites. In a sense it is the perfect HR advantage. One that can transform the landscape unobtrusively in a matter of months.
3 Practical Instances of Blockchain and HR
The Blockchain and HR marriage is already being planned in earnest.
Many agile companies have started making infrastructural adjustments to accommodate the technology and reap the rewards.
Blockchain in Recruitment
We have covered this use case early on in the discussion. With Blockchains not only will candidates have a comprehensive digital record of their experience and accomplishments (even the ones like overtime and extra credits that are difficult to document right now), companies looking to hire them will also have everything they need to evaluate their fit and the information will be auto-validated.
According to CareerBuilder a staggering 58% of employers find a lie in the resumes they scan. And so many other minor changes and additions go unnoticed. Thanks to Blockchain this possibility will be significantly reduced without introducing overheads like exhaustive background checks.
According to employers, the most common lie they catch on resumes: Embellished skill set – 57%
Most importantly, businesses will be able to confidently match candidates to positions because often a physical resume can’t articulate everything an individual is adept at and abilities stay untapped.
Blockchain in Payroll
Heard of Bitcoin? Blockchain is the technology that’s behind the cryptocurrency. HR has to jump hoops when transferring money abroad. If a distributed team is the norm then several slabs of bank and intermediary fees quickly add up to bite into resources with a sharp sting. This is unnecessary.
Blockchain aim to change the way we perform core HR processes including payroll, recruitment, competency management and learning
Since Blockchain operates on the tenets of trust and abolition of the middleman culture, payments in currencies other than the recognized international options can save businesses a lot of money.
The intended recipients of the crypto salary (value) would get the money in their accounts, on time, as they do through traditional channels and businesses would bypass the relay with banks and exchanges where a hefty commission is charged for each transaction.
Blockchain & Automation
Since Blockchains deal with digitized data, many aspects of HR that have remained largely implicit can be made explicit and thus both transparent as well as conflict free.
When Human Resources starts using Blockchain, digital process management opportunities will open up with smart contracts. For example, employee evaluation can be a code or a script that’s embedded in the chain.
As a cross-industry disruptor, Blockchain has the potential to reshape the HR technology landscape
So every time salary is paid and this information is updated in the blocks, the system can auto-trigger a performance review for the concerned worker. The whole task becomes automated when the review request is connected to an appraisal software. Imagine how handy this can be, especially during onboarding which stretches for up to a year and requires close supervision of talent for best chances of retention?
* * *
As HR explores Blockchain, more and more gaps can be plugged with the technology. Its convenience will make it indispensable. The only caveat is: the business should come first.
Blockchain should be adopted in problem areas that can actually benefit from its introduction. If it is used as a broad-spectrum solution or treated like a fad – there is a distinct possibility of undermining its potential and tagging it a hype.
Bonus Stuff👋: Who are the most reputable blockchain experts in the world?
🔗Gavin Andresen – The developer that worked most closely with Satoshi Nakamoto during Bitcoin’s early days but was forced off the core team.
🔗Vitalik Buterin – Russian programmer, co-founder of Bitcoin Magazine, and controversial creator of Ethereum.
🔗Sunny King – Creator of Primecoin and Peercoin. Considered the father of Proof-of-Stake. Little is known about this blockchain genius.
🔗Amir Eslampanah – Cryptographer, Buterin classmate, and lead developer at Goldcoin. Inventor of Golden River mining algorithm.
🔗Charlie Lee – Former Google employee, creator of Litecoin, and for some unknown reason, SegWit supporter.