Blockchain technology is changing the way businesses operate and innovative companies are already seizing a first-mover advantage by adopting it.
IBM, Samsung, Visa, Walmart and Barclays, to name just a handful, are already seeing the benefits of blockchain to track supply chains, create ‘smart’ legal contracts and simplify financial transactions.
With the ability to maintain an accurate record of validated information, providing a shared and immediately available ‘one version of the truth’, blockchain is lauded as the most revolutionary form of technology since the birth of the internet.
What does it mean for HR?
Let’s start with recruitment. If you’ve ever used an online job board, CV database or professional networking site such as LinkedIn, you’ll appreciate how the ability to find people with the right skills and experience can help you identify potential candidates for positions you need to recruit into.
One element that can cause confusion is the vast number of ways in which people describe their skills and experience. If you’ve ever tried to hire a project manager, for example, you’ll have found that this catch-all term is used to describe the various management of projects ranging from building a nuclear power station to arranging the office Christmas party.
One way in which blockchain technology can simplify the work of identifying potential candidates is to provide a database of people with experience and skills codified to accurately record their abilities.
At the moment, after finding a suitably qualified person to recruit, HR professionals have to confirm that the individual is who they say they are, holds the qualification they state and has, in fact, held the roles they have included in their CV.
You only have to run an internet search for the words ‘CEO’, ‘CV’ and ‘scandal’ to appreciate the implications of an ineffective reference check.
Some universities have already started to look at using blockchain as a means of verifying the educational qualification level of their alumni as an accessible record. With institutions being able to verify education in this way, we can start to gain an idea as to the positive impact blockchain can have on detecting fraudulent applicants and the knock-on effects of this on business.
A more rigorous approach using blockchain technology has the potential to turn workforce planning from a laborious annual exercise into instantly accessible and live business information. This will allow companies to understand exactly how many staff they need to recruit and where, who the right person is for that internal promotion, and whether staff allocated to that important project have the correct competencies.
In the HR world, this could also impact on compensation and benefits. Blockchain has the potential to provide a more robust approach to pay scales with defined salary increases for key skills or capabilities that are held at a premium in the market, or for allocating performance-based bonus awards in a more measurable way.
Of course, all of the mentioned applications are based on speculation and theory and, as with any technology, blockchain must overcome several obstacles including a significant shift in attitude in the way people work.
Regardless of the rate of progress, blockchain will certainly have an unavoidable effect on the way we do business and HR professionals should continue to monitor it carefully during 2018.
Sam Fletcher is head of intelligence at 6 Group