Even if you’re not entirely sure what it is, blockchain technology is probably one of those phrases you’ve heard tossed around the water cooler that leaves you scratching your head. Blockchain is most often discussed in reference to cryptocurrencies like Bitcoin. Essentially, blockchain technology is a network that helps to remove intermediaries like banks from financial transactions in an effort to decentralize trade and establish massive databases.
(If the concept is still fuzzy, don’t worry! Have your HR professional check out this video from Wired Magazine for more explanation.)
While cryptocurrencies may seem like a trend, blockchain is a technology that can be applied to a number of needs from voter fraud prevention to electricity distribution!
Leading experts like the World Economic Forum anticipate that blockchain technology is an inevitable reality of the near future that will affect more than just financial transactions.
Here are five ways that blockchain technology will impact HR management.
- Smart Contracts
Because blockchain is decentralized, it cuts out the middleman – and that’s true for more than just the exchange of money. Smart Contracts are not actually a new technology, but they are gaining momentum due to increased awareness of blockchain. By using a Smart Contract, your company forgoes the need for a lawyer and can directly engage in contractual obligations with a client or employee, obligations that are safe and self-enforcing due to the cryptography behind them. Check out this article for more information on the many uses of Smart Contracts.
Due to a large, decentralized database, blockchain could mean the end of a necessity for resumes, application programs, and other recruiting systems. A large database could mean that each candidate could give you direct access to their employment history and relevant personal information. Employers and candidates will no longer need an intermediary to exchange information and will be able to communicate directly.
- Tax Information
Blockchain’s database is a safe and reliable way to track and store information. Since the database can constantly store purchase and income information, corporate tax information can be more accurately tracked to make filing taxes easier than ever before. It can also help you avoid mistakes!
- Reliable Employee Information
According to the Society for Human Resource Management, blockchain technology could revolutionize the integrity of employee data.
SHRM claims that “the systems could make the concept of a ‘self-sovereign identity’ for employees a reality . . . The networks would reduce the chances of third-party companies providing inaccurate historical data about an applicant or employee.”
Your HR departments will now have the means to ensure that the most accurate information on your employees and employment history is stored.
- Cryptocurrencies and Payroll
We finally come to cryptocurrency. While it may seem like a gamble, most experts affirm that financial transactions via a decentralized network are safe and that they have only become unsafe when users try to recentralize their data.
Using cryptocurrency through blockchain technology will be the simplest way to exchange money with employees and clients across the world without the need for an intermediary.
Take it from Ashik Ahmed, CEO of Deputy: “[Blockchain is] cheaper and it’s more effective than standard time-intensive and people-intensive methods. It makes people’s lives easier.” Using blockchain could be the most efficient way to manage your payroll process.
If the details of blockchain’s many uses have left you wondering how this technology could be implemented in your business, give the HR experts at Commonwealth Payroll and HR a call today at (877) 245-1159.