Will Blockchain Be the Missing Link in the Next Evolution of HR?
As a Human Resources professional, I often find solace in Anthropology; the study and understanding of humanity’s past to uncover and guide our future. It’s somewhat easy to see why as I carve a career into a business profession that has witnessed arguably the largest evolution of all in such a short space of time. The beauty of the HR profession and the professionals that contribute to it, in my view, is the constant asking of the ‘what next?’ question. And as a result, we’ve taken HR from a record keeping personnel function to one that now sits in the C-suite and guides the strategic direction of organisations worldwide.
But whilst we all fawn over the potential impacts of AI, the vast value that we can grasp through the correct harnessing of data analytics, and work on our ability to develop HR strategies; let’s take a pause for a moment. I completely agree that all of the above will, and are already shaping the future of our function, and I myself have been working hard to upskill in these areas to play my part in the next iteration. However, there’s an elephant in the room that is asking an awkward question ‘Are we all really there yet?’.
Whilst a lot of us have been granted the permission to a seat at the table, I still speak to fellow colleagues in other businesses who are using outdated HRMS’ and processes to match. In a recent IBM Institute of Business Value study on the key HR challenges to be addressed by Cognitive Computing (namely, technology like AI), CEOs responded by saying that overly complex HR processes and slow responses to employees were among the elements that could be addressed. And so, I ask myself if collectively, as a function, if we’ve really shaved off our defined past as the processual profession enough to allow for a unanimous view of our reformed selves.
So, back to my point about looking back to shape the future. If we’re still stooped in the process (which of course is necessary a lot of the time), then what technological applications can we use to at least show our businesses that we are trying? My answer: Blockchain.
A Quick Recap on Blockchain
One of the great things about Blockchain being so new is that in every article you’ll read about it, you’ll find a section like this one attempting to explain the technology in the simplest fashion. Here’s my attempt:
Blockchain is a ledger technology, otherwise known as a recorded track of transactions that happen between parties, storing movements in ‘blocks’ and creating a linked timeline of events. Its key difference to simple book keeping, however, is that Blockchain is a public ledger, meaning that every transaction is viewable and transparent. Parties can remain nameless as ‘Party A’ and ‘Party B’ for example, but the movement between the two is viewable. To form a ‘block’, a scrambled mathematic code is assigned to each, and if the data inside it changes, the code does too, breaking the chain until resolved.
You can start to see the benefits of employing such technology, namely; efficiency in time and man power – if the technology provides a trustworthy and verifiable data point to hand quickly, it removes the time taken for background checks. Security and transparency are also both key advantages, which, although sounding oxymoronic, is entirely possible with Blockchain. These three advantages might be familiar as frequently raised themes from employees as their expectations for the modern workplace.
Although this technology may seem somewhat… uninspiring, over a billion dollars have been invested in Blockchain technology over the last 4-5 years. Companies like IBM and Microsoft are taking big bets in Blockchain. And it is no wonder why; if you have read a few articles on the topic, you would have heard versions of a quote from IBM CEO Ginni Rometty: ‘Blockchain will be for trusted transactions what the internet did for communications’. Forecasts state that whole industries are in line for disruption; from transportation and consumer products with Blockchain’s applications to supply chain, to the industry set for the largest disruption –Accounting and Finance.
HR Applications to Blockchain
In my view, we can also add HR to the growing list of professions in line for disruption. And as I think about it, there are a few elements of our function that could pioneer its use.
One of Blockchain’s most logical applications to Human Resources is in recruitment, where the storage of credentials such as work history, identity and other fact based information that is required for checking before onboarding can be verified quickly in a block. Utilising Blockchain here provides obvious advantages to our current processes, namely the reduction in time to hire. This is an obvious potential win for both managers and candidates alike.
A highly sensitive HR data point is the footprint that employees leave within the organisation. To the point above, if recruitment track information pre-hire in a block, it makes sense to me to carry on with further blocks as the employee spends more time with the business. Contractual change? Put it in a block… Digital credentials? In they go too. Information points that are required for verification at any point throughout an individual’s career could be safely stored and visible and verifiable when required.
Payroll applications also make sense to me, and I won’t start the debate up again here about whether employee salaries should be published or not – that’s for another time! But, what I will say is that the technology would be there if companies would be willing to take the bold step.
So, Let Me Finish with This
Although Blockchain may not have the impact of Artificial Intelligence, the influence of data, or the attractiveness of strategy and decision making, it shouldn’t be discounted from the rest of the emerging technologies and themes congruent of the ‘future of HR’. By chipping away at frustrating processes and improving the efficiency of our function alongside the ‘cool stuff’, we can transition into another evolutionary phase, overcoming the demons of our past – and I believe that Blockchain can help by playing a leading role.