Could blockchain be used in HR?

September 17, 2018 Michael Grotherr

Blockchain. The technological phenomenon has seen a lot of popularity in recent years, mainly within the cryptocurrency and energy markets. But little is still known about the new technology and how it will impact other sectors in business.

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Blockchain, in simple terms, can be described as a decentralised distribution of computer networks which allow the flow of information to become automated. This makes it a reliable system to store data whilst eliminating the intermediary in transactions. The new technology can increase counterfeit security compared to existing systems, which is why banks are currently working to stay one step ahead of blockchain. However, it’s not just the financial market that is experimenting with, and benefiting from, blockchain. According to some experts, blockchain could be making its way into the world of HR. With this in mind, could blockchain influence HR at all?

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Will CVs and LinkedIn become obsolete?

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Blockchain transactions can safely store information. In the future, this could mean that candidate descriptions and employment history will no longer be constantly re-written, possibly eliminating the need for CVs. This also means that lengthy verification processes, where HR professionals need to request references for the candidate, may also be affected.

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It’s possible that HR could easily access public blockchains in the future, where performance information for candidates would be stored. Information like whether the applicant was promoted in their previous role or reasons why they left their previous role would be readily available to HR departments.

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As far as identity verification is concerned, public administrations still have authority in regard to banks and universities. Human resources departments rely on these services, but such verification could also be performed future through the database architecture of the blockchain. For example, the authenticity of educational qualifications and training would be verified. On the other hand, additional costs and bureaucratic procedures would disappear.

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So, is this a realistic scenario? Yes, but it has some drawbacks!

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As a technology platform, blockchain can store vital information, from birth certificates to tax returns. And by verifying this information in an extremely secure manner, blockchain also opens up direct human resource application opportunities, especially for human resources management and recruitment. However, the use of personal data and privacy is a sensitive area, especially since the implementation of GDPR, so companies have to be careful and not rush into blockchain projects.

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Why blockchain is still out of reach for the HR department

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  1. Blockchain is still very abstract. Currently there is no proper interface or way to visually personalise the user experience. In addition, most companies tend to adopt systems whereby applicants are in control of what they put on their own CV. Where personal data is concerned, people may be hesitant to input their own data into an unknown interface.
     
  2. Not all employees are registered on LinkedIn or other career platforms and therefore, are not familiar with digital platforms altogether. And because of privacy and the lack of user-friendliness, it is more likely that only a tiny minority will transfer their data to the blockchain.
     
  3. In our recent study with IDC, we discovered that employers are prioritising skills over qualifications when it comes to recruiting, suggesting that academic qualifications are no longer a necessity. Therefore, the need for blockchain to verify any academic qualifications may become obsolete further down the line. The benefits of blockchain in this area may only be used by large organisations that still use degree classifications as their criteria for applicants.
     
  4. Other sectors have not yet dealt with blockchain or even heard of it. The use of blockchain is growing but companies are still reluctant to adopt the technology, primarily due to it still being relatively new. 
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While blockchain may offer the technology to support human resources departments, it will take some time for employees to properly consider it as an effective tool in leveraging HR practices. It will take a while for HR to get involved with blockchain at all, let alone fully exploit the technology.

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Organisations shouldn’t be put off by this technology. Instead, they should spend some time researching whether blockchain could benefit their HR department and if so, how they can properly implement the technology.

About the Author

Michael Grotherr

Michael Grotherr is Vice President for Sales in Central Europe at Cornerstone OnDemand since 2017. He works from Munich and has extensive and detailed industry knowledge regarding strategic leadership, corporate development and human capital management, which he has acquired during his extensive career in the HR space.

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