As the pandemic accelerates ideas about the future of work, the one receiving less attention than usual is blockchain. Widely known as the digital ledger used to track Bitcoin transactions, the blockchain has a range of uses to protect information.
For HR, this is such moment-rich data as we’ve ever seen, but it comes with significant risk. Last week’s announcement of two separate cases in which HR officials redirected funds from employee payments to personal bank accounts raises new questions about how blockchain can be used as a safer method to everything from employee compensation to the protection of personal information.
Blockchain as a technology is the focus of greater investment, with tech, media and telecommunications companies most willing to invest at least $ 5 million in it this year, according to a report from Deloitte. As it gains popularity in the life sciences, healthcare, energy, and other sectors, it raises the question of what kind of impact blockchain can have for businesses looking to implement its use in HR functions.
Benefits and compensation
The most obvious benefit for HR is the security of compensation transactions, as only the sender and receiver can see the information. When it comes to entrepreneurs and workers in the odd-job economy, the blockchain opens up the possibility of paying in cryptocurrency, which helps avoid the complications of exchange rates and banking in foreign markets. . It also holds great potential for eliminating the time-consuming manual tasks associated with payroll systems.
Another advantage is that it can automate tax processes to maintain regulatory compliance with ease and keep records cleaner than traditional processes. This can limit the risk of an audit and make the process easier if needed, as HR can securely share tax records with auditors almost instantly, eliminating costly document collection and verification processes.
Additionally, sensitive employee benefit information is more completely secure and access to benefit information can be provided outside of standard company systems without compromising security.
Hiring new employees presents a variety of challenges when it comes to selecting candidates. Checking resumes and finding references can be time consuming and difficult. Blockchain, however, offers the possibility of creating employee registration systems that are secure and guarantee a higher level of accuracy than highly embellished resumes.
By allowing a potential employer to access their employer’s history based on the blockchain, applicants can submit information with a higher degree of confidence that their information is secure and that other applicants will not be able to. present themselves fraudulently to advance in the process.
The hurdle here continues to be complexity due to GDPR, which requires a person to be able to change their personal information at any time. On the employer’s side, we are concerned about what goes into the file. Proprietary information, for example, is not something employers will want to share. While this has some advantages for recruiting, the disadvantages are still significant, but they are still being worked out.
Japan’s human resources company, Persol Group, is working with electronics giant NEC to develop a blockchain-powered recruiting app that would help streamline recruiting processes, but it’s still just around the corner. in its infancy because the developers are still in the proof-of-concept phase.
LILY: Realities of blockchain in recruiting
For entrepreneurs and workers in the odd-job economy, receiving their wages almost instantly becomes more of an expectation than a benefit. Blockchain can play a key role in automating payment processes. This requires the establishment of criteria that must be met for the salary to be earned. Once all the criteria are met – for example the work of a graphic designer is published – payment can be made automatically.
Protect employee data
Whether it’s health insurance records, bank account numbers, retirement accounts, or salaries, there is a lot of sensitive employee information in HR. Protecting this information is essential to maintain trust in HR and the business. By placing a large portion of these transactions on the blockchain, information is decentralized, meaning bad actors cannot access large amounts of employee data in one place and any changes to it must be verified. .
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