One of blockchain’s chief benefits is the ability to authenticate and protect information. With today’s decentralized workforces, there is a variety of information possibly at risk, including payroll, insurance, health, and personnel data. Similarly, HR and enterprise recruiters want assurance that potential job candidates and their résumés are authentic and accurate. Blockchain technology has the potential to provide the necessary verification and protection of such sensitive workplace data.
Here are three Future of Work areas where blockchain technology could provide critical verifications and safeguards, particularly for the contingent and gig workforce — from the recruitment to the contracting and payment process.
Recruitment
As direct sourcing becomes more ubiquitous, the need for data verification grows because of the sheer volume of candidate information entering job portals. It can be time intensive for HR and enterprise recruiters to verify qualifications and references. Blockchain can help in the recruitment process.
- A candidate’s digital identity on a personal blockchain can save tremendous time authenticating a résumé and associated work experience. It serves as a single source of truth for that individual.
- Colleges and universities are now issuing digital degrees through blockchain that candidates can provide a direct link to on their résumés. This same concept of virtual credentials can apply to training certificates and performance reviews for future authentication.
- Reduce opportunities for fraudulent candidate information while providing greater confidence in using search engines and other aggregate technologies to automate candidate recommendations and selection.
In a Datatechvibe article, the author states another reason to embrace blockchain for recruitment purposes, “HR managers may become more predictive in anticipating HRM developments by embracing blockchain. They can replace vacant positions faster because the technology cuts the time it takes by leaps and bounds, and they can also improve the data’s legitimacy and dependability.
“Furthermore, they can scale quickly, resulting in a larger candidate pool and a larger data repository to collect data.”
Smart Contracts
When selection of job candidates for contracted or temporary work occurs, an enterprise can institute a smart contract on a blockchain. IBM describes smart contracts: “Smart contracts work by following simple ‘if/when…then…’ statements that are written into code on a blockchain. A network of computers executes the actions when predetermined conditions are met and verified.
“These actions could include releasing funds to the appropriate parties, registering a vehicle, sending notifications, or issuing a ticket. The blockchain is then updated when the transaction is completed. That means the transaction cannot be changed, and only parties who have been granted permission can see the results.”
Such employment contracts provide transparency and immutability for all parties and enable greater enforcement of their terms, conditions, and penalties. With a growing percentage of contingent labor, enterprises can initiate a smoother and more immediate payment system while also benefiting from a paperless process.
Payroll
With smart contracts in place, payroll is where blockchain can add immense value. Much of an enterprise’s most sensitive data resides in payroll — tax documents, pay stubs, benefits information, etc. Blockchain can protect these sensitive records from potential fraud and cybersecurity threats.
In terms of the payment process for contingent and gig workers, enterprises can establish a secure peer-to-peer network and use blockchain for near-instantaneous payment without the involvement of financial institutions. Thus, they can receive instant payment once their contractual obligations are met — without waiting for a pay period or invoice processing.
Blockchain is even more critical for international contractors and gig workers. The Future of Work is a global paradigm with accessible talent worldwide. However, some professionals cannot set up a bank account in their country. Blockchain and peer-to-peer networks solve that issue. In an article for Tech Target, Pam Baker, a technology and blockchain expert, says that with cross-border payments, “Traditional electronic payments (to the receiving country) can be stymied by local regulations and IT security schemes that blockchain payroll systems can overcome.”
Implementing blockchain technology into Future of Work processes will not occur overnight. Enterprises need to work with financial institutions, managed service providers, and other partners to adopt the technology and establish protocols. However, blockchain holds great promise as more organizations pursue digital transformations. The foundation exists to bring blockchain into HR process design. Like many things in business, communication and collaboration will be essential to blockchain’s implementation and realization.
