The technology is expected to become a $20 billion business by 2024, and it’s developing rapidly.
Blockchain technology has changed the way we do business, and it’s only going to become more influential in the coming years. The technology is expected to hit $20 billion in revenues by 2024.
While some are wary about how fickle the market can be, blockchain entrepreneurs are focusing more on hiring and building the future applications of this lucrative business—and HR professionals should be doing the same.
“Blockchain will have a major impact on HR management by 2022,” said Jeffrey Snover, Distinguished Engineer and Lead Architect at Microsoft. “The ability to repurpose employees’ time will be a competitive advantage that stands out.”
From this, we learn that the process is already underway, and some small change is taking place in the HR world every time you buy cryptocurrency.
What Is Blockchain?
Blockchain technology is the most exciting thing going on right now. It’s not a new concept, but it’s been gaining popularity recently. This is largely due to the mass adoption of cryptocurrencies, which use blockchain as their main advantage in the market.
Today, blockchain has been used for buying crypto with a credit card which you can exchange for things like digital voting, music and video sharing platforms, and even the sharing of home data between multiple parties without a central authority.
The blockchain ledger system has so much potential that many other industries could also benefit from its use. Theoretically, any industry that involves payments or data can be improved by this technology—and there are already multiple examples of proofs-of-concept being implemented around blockchain. These include solutions for trade finance, supply chains, identity management, and healthcare records usage in general.
Blockchain Benefits for HR
As with many buzzwords, the term “blockchain” has been thrown around quite a bit in the past few years. We’ve heard it about cryptocurrency, social media platforms, and even supply chain management. But, what does this mean for HR? There are various use cases for blockchain in HR—one being smart contracts used for employee hiring and management processes like signing benefits paperwork or getting reimbursed for travel expenses.
Rather than have employees complete their forms and send them off to HR or their department heads individually, paperless processes can be automated through software that receives documents from an applicant’s device and sends it as an encrypted file over the internet to the appropriate human resources position at their company.
HR departments also stand to benefit from implementing blockchain solutions by streamlining data collection processes related to payroll records or company-wide survey results where multiple departments could have access to—and can easily manipulate—the same data sets.
Using blockchain in the Human Resources department would add another layer of control between individual employees’ responses, which would remain anonymous, while also tracking changes made by different users accessing the database over time.
Why Blockchain Might Revolutionize HR
Blockchain is designed to be shared and distributed with no single point of failure. This means that, unlike in the traditional corporate structure, there is no central authority figure who can change the rules of an organization to benefit themselves; a new rule can only take effect when all network participants agree on it.
There are also built-in incentives for accurate, secure record keeping. For example, if you make a mistake when entering an employee’s record, it will become easier to change that mistake in the future—because everybody else on the network can see it and point out the error quicker.
The newly hired employee could do this too. Of course, there would be the minor embarrassment of having your mistake recorded for future generations to see, but that’s hardly the issue.
As the Blockchain Market Grows, This Technology Will likely Have a Significant Impact on Business Processes Going Forward.
The blockchain is a decentralized, incorruptible digital ledger that can be used to create an online database of records and information that are distributed among participating nodes on the network. For HR professionals, this means that blockchain technology could improve transparency and data security in departmental processes and operations.
Hiring has become more challenging for businesses as verification of job candidates’ qualifications, and identity has become more important. Using blockchain to streamline the recruitment process will provide greater access to qualified candidates. It will also reduce the time spent reviewing applications, verifying education credentials, or checking references. HR staff will have increased access to hiring data while maintaining complete control over hiring policy decision-making.
HR employees often have to meet strict deadlines when handling large amounts of paperwork required for new hires, benefit enrollments, tax filings, and other personnel matters.
Blockchain offers HR teams a way to reduce the amount of paperwork involved by using smart contracts embedded in the blockchain to execute these activities automatically upon completion of specified conditions, using the same protocols that some companies use to automate buying cryptocurrency.
This reduction in administrative work could free up staff resources for higher-value tasks associated with more strategic HR functions such as employee training or professional development programs.
How Will Blockchain Change HR Functions?
By 2022, blockchain’s impact on HR has been well established. Blockchain technology will allow for more accurate and real-time data collection that makes it easier to make better hiring decisions; it’ll also enable companies to embrace a greater degree of diversity in hiring. In addition, blockchain would make employee records harder to hack and potentially store more information about employees’ benefits and compensation packages.
Employees will benefit from blockchain’s decentralization by having greater access to their data, allowing them to keep track of the information they need to exercise their rights as employees.
Additionally, blockchain could improve employee experience with things like company-sponsored health programs or create innovative opportunities based on these new features. Finally, how employers handle their confidential information may change as they explore ways blockchains can help protect them from hacks or tampering. This will be carried out using the same encryption processes that ensure that you get your money safely when you convert cryptocurrency to fiat.
What Are Some Issues With Blockchain?
With all the buzz around blockchain and its potential, it’s easy to forget that this technology is still in its early stages. Blockchain is not a magic bullet—instead, it’s like an innovative input method for a smartphone.
The most important thing to remember when researching the use of blockchain is that it’s not going to solve all your problems. You may find that it creates new issues that are just as difficult and costly, if not more so, than the ones you’re trying to fix in the first place. There are also many misconceptions about what business processes can be performed using blockchain technology.
One of the biggest ways businesses have used blockchain so far is for tracking physical goods during complex supply chains, but there are other uses such as identity management systems and digital voting platforms. Remember: no matter where you are in your understanding of this new technology or which way you’re looking at it—enterprise software or consumer-facing applications—there will always be surprises along the way.
Why Should Organizations Be Thinking About Blockchain Now?
While blockchain technology is still in its early stages, it’s evident that the impacts on human resources will be profound. HR functions are charged with the responsibility of collecting and keeping employment data and records.
To make informed decisions, they rely on this information, which often includes sensitive personal details such as age, disability status, or criminal record (in some countries). When this information is stored on a blockchain system, those who need access can verify the data without giving out their identity (because the data itself is encrypted), meaning that there are fewer opportunities for errors and fewer chances for leaks.
The market for blockchain technology has been steadily growing since 2016; by 2024, it could have a value of $20 billion. Although this estimate might seem shocking to some, when you consider all of how new technologies change their target industries—think of Facebook’s impact on media companies—it’s not hard to imagine how transformative blockchain could be for human resources.
More Businesses Are Turning To Blockchain to Secure Their Data and Improve Transparency and Efficiency in Their Organization.
With the rise of big data, cyberattacks, and growing concerns about data privacy, businesses are looking to blockchain as a solution. Blockchain cuts out the middleman—such as banks or other financial institutions—reducing the time it takes to complete transactions and making them cheaper by removing processing costs.
The structure of blockchain makes it secure: It is decentralized, meaning that there’s no central hub where data can be accessed or altered (like with a cloud server). Instead, it is hosted on thousands of computers around the world.
Every transaction relating to that document is added onto an encrypted digital ledger, which then must be validated by multiple parties before they can be entered into the system. This creates a ledger of historical records that makes it impossible for any one person to tamper with or change.
Because blockchain is public and unalterable once entered, this technology also has been used for more unusual applications lately. For example, diamonds just became certified using blockchain in July 2018 by Everledger, a company based in London.
This means that Everledger will now track each diamond from its source through to when it’s sold in stores. The diamond’s unique ID number can then be used to track where else in the supply chain each diamond may have traveled throughout its lifetime. This not only helps prevent fraud but also increases transparency within organizations using it and improves consumer confidence overall.