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One of the newest and freshest ideas to hit the HR scene is blockchain. The technology is still in its infancy as it relates to HR, but is quickly gaining momentum. HRIS leaders such as Kronos have already started to work on integrating blockchain technology into their HR software solutions.
Blockchain is technology that was originally developed as a ledger for cryptocurrency. “Blocks” of information are created when one party initiates a transaction and another party agrees to or validates the transaction. As blocks are added, it creates a chain, which is where the name “blockchain” comes from.
One of the most appealing aspects of blockchain is that that anyone with internet access can view and make changes to blockchains that have been created and can start blockchains. Though it seems counterintuitive, this decentralized structure is actually more secure than the centralized databases that we currently rely on.
Every single block of information that’s created is encrypted. In order to view the information, users have to be given a digital key.
The use of blockchain in recruitment could help to minimize falsification in work history reporting. At the present time, candidates can lie about education and previous employment. It’s tough for employers to verify information, there’s a lot of leeway for candidates to get creative about the details.
With blockchain, every block of information that’s added to a person’s work history must be validated by the other party (i.e. the school or employer). When the information has been verified, it will have a green checkmark or other indication. If information isn’t validated in time, it will be eliminated from the blockchain.
Hiring managers and recruiters can verify a person’s qualifications without ever contacting the organizations. This saves time and also protects candidates that don’t want to let their current employer know they are looking for another job. Additionally, letters of recommendation and certifications can be stored and viewed alongside key points of the work history report.
Money can change hands without the need for a banking system, eliminating wait times and fees. This can speed up payroll and save employers’ money. Since it’s not necessary to store employees’ bank account numbers and information, using blockchain for payroll may also be more secure.
Tracking performance using blockchain can assist with optimizing performance management and merit based raise systems. Since blockchain automatically creates a running log of information, it is a common sense solution for 360 degree performance tracking. Peer feedback and self assessments can also be added to the performance blockchains, if desired.
Many HR professionals predict that blockchain stands poised to be the next big transformation for HR. Finding a HRIS that is already set up to work well with blockchain can help get your organization ready for this change. By adapting to this up and coming technology, you may find your competitive edge and drive your organization into the future.