BLOCKCHAIN AND HR DEVELOPMENT

 Blockchain, a strange and unusual emerging technology, is here to convince businesses of its long-term benefits and competitive position in growth and organizational management. Blockchain, which powers Bitcoin and other cryptocurrencies, has grown in popularity and is now used in fashion, retail, healthcare, and other areas. Blockchain applies to HR and recruitment systems (Gavrilov, Orce Simov and Vladimir Trajkovik, 2020)

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Its ability to revolutionize HR and recruitment functions is attracting many firms. Many firms worldwide are using Blockchain's decentralized distributed database technology to accelerate, manage, and sophisticate their recruitment and HR activities. Blockchain can greatly affect human resource management, as we will see.

Recruiting

Traditional hiring takes time and resources. Thus, third-party recruiters are occasionally needed. The high fees, collaboration, and visibility issues of engaging talent management organizations are negative. Productivity is also questioned. Since Blockchain verifies candidate information and claims early on, this problem is solved. Directly authenticating resumes, grades, credentials, talents, and work experience saves a lot of back-office and third-party investment. Blockchain will reduce the number of recruiters needed as it streamlines back-office recruitment (Kişi, 2022).

ID Verification

Identity verification, bias, lack of transparency, and candidate prejudice may be major recruitment issues. Companies use Blockchain in HR to prevent such concerns and completely verify identities. Around 51% of Blockchain adopters use digital data for identity verification, according to a survey. The candidate's identification is validated against trustworthy institute data in this solution. After carefully checking an individual's expertise and background, qualification claims and compensation may be made effortlessly, freeing up HR to contribute value to the firm. Using Blockchain, a degree holder can encrypt and save their certificate without confirming it (Yi et al., 2020).

Referral process

Employee reference processes have evolved, and Blockcha

in is the biggest tool to change them again. The technology will store correct candidate employment data that HR may view and evaluate. This reduces the risk of document falsification and credential fraud and increases referral analysis transparency. In the end, Blockchain helps companies hire the best candidates (GE et al., 2021).

Attendance Management

A blockchain-based HR workflow may store and encrypt biometric entries from employees entering the workplace. Employee attendance data like fingerprints, IDs, and others can be organized and connected with employment management. HRs can see real-time data to track attendance and process wage claims because all data is on Blockchain. This simple employee attendance system will eliminate disagreements between employers and employees, enhancing confidence and fairness in payrolls, payments, and claims approvals (Sundhararajan, Kolivand and Vijayakumar, 2021).

Massive productivity gains

Blockchain will enhance productivity by allowing employers to verify applicants' talents and aptitude for jobs. With the correct talent acquisition balance, technology can help SMEs find the ideal professional. Overall productivity increases as locating the right staff becomes easier. Blockchain can reduce admin work for SME HR activities, including payroll, tax deduction, and PF calculations. This means administrative tasks focus on business growth and customer engagement (Gunasekera and Valenzuela, 2020).

Smart Contracts

Creating smart contracts between employers and employees is a major benefit of using Blockchain in business. Blockchain-enabled: Once the technology has a code to handle and condition money, smart contracts will automatically pay workers. Thus, workers receive their pay immediately without fraud or delays. Blockchain-powered smart contracts allow HR staff to add people to the payroll, outline terms, and adjust contractual validity. Freelancers working on multiple assignments can use smart contracts to receive regular payouts and a smooth blockchain contract system. Blockchain for the freelancing gig economy gives organizations and gig workers a hassle-free system. According to a study, 45% of early blockchain adopters have integrated smart contracts in their organizations (Khan et al., 2021).

Impact on Employee Lifecycle

Blockchain disrupts and optimizes the employee onboarding process for efficiency and productivity. The complete employee lifecycle is fully monitored and conducted with Blockchain, which expedites high-potential HR tasks, including interviews, reference analysis, payroll, data security, qualifications, and background analysis. Blockchain data allows organizations to strategically assign responsibilities based on all relevant parameters as employees change roles or apply for better positions (Choudhari et al., 2021). Technology streamlines the handover process with management teams when an employee quits. Blockchain capitalizes validated historical employee data while assigning roles to new hires, saving time and money.

Data and Transaction Security

Blockchain technology is notoriously connected with secure transactions and banking. However, personal account, job history, financial, and capital market information may be communicated to a receiver or system. Blockchain promises cyber security, making future transactions of most confidential data leak-proof so third parties cannot steal or alter it. Blockchain cryptography assures employers and employees of safe, risk-free transactions and payments. Data breaches are reduced by low HR process risk (Saxena and Gayathri, 2021).

Blockchain synchronizes and decentralizes massive, high-volume financial records and sensitive personnel data. Blockchain excels at HR's urgent engagement in this amazing job. Blockchain data prevents fraud by providing unanimous facts. Technology-enabled decentralized data distribution protects SMEs from non-transparency, cyber dangers, and fraudulent transactions.

Blockchain disrupts the capital market most often, but it also transforms HR and the workforce. Companies around the world have realized Blockchain's potential to improve HR and recruitment processes. As mentioned above, existing firms' HR systems must consider Blockchain's key benefits—trusted verification, transparency, and productivity gains—to maximize its power.

References

•        Choudhari, S., Das, S., Parasher, S. and Gangwar, D. (2021). Sub Contractor Life Cycle Management In Enterprise System Using Blockchain Technology. 2021 6th International Conference for Convergence in Technology (I2CT). doi:https://doi.org/10.1109/i2ct51068.2021.9417981.

•        Gavrilov, G., Orce Simov and Vladimir Trajkovik (2020). Blockchain-based model for authentication, authorization, and immutability of healthcare data in the referrals process. Ukim.mk. [online] doi:http://hdl.handle.net/20.500.12188/8179.

•        GE, C., SHI, H., JIANG, J. and XU, X. (2021). Investigating the Demand for Blockchain Talents in the Recruitment Market: Evidence from Topic Modeling Analysis on Job Postings. Information & Management, p.103513. doi:https://doi.org/10.1016/j.im.2021.103513.

•        Gunasekera, D. and Valenzuela, E. (2020). Adoption of Blockchain Technology in the Australian Grains Trade: An Assessment of Potential Economic Effects. Economic Papers: A journal of applied economics and policy. doi:https://doi.org/10.1111/1759-3441.12274.

•        Khan, S.N., Loukil, F., Ghedira-Guegan, C., Benkhelifa, E. and Bani-Hani, A. (2021). Blockchain smart contracts: Applications, challenges, and future trends. Peer-to-Peer Networking and Applications, [online] 14(1), pp.2901–2925. doi:https://doi.org/10.1007/s12083-021-01127-0.

•        Kişi, N. (2022). Exploratory Research on the Use of Blockchain Technology in Recruitment. Sustainability, [online] 14(16), p.10098. doi:https://doi.org/10.3390/su141610098.

•        Saxena, R. and Gayathri, E. (2021). Cyber threat intelligence challenges: Leveraging blockchain intelligence with possible solution. Materials Today: Proceedings. doi:https://doi.org/10.1016/j.matpr.2021.06.204.

•        Sundhararajan, M., Kolivand, H. and Vijayakumar, K. (2021). ICASISET 2020: Proceedings of the First International Conference on Advanced Scientific Innovation in Science, Engineering and Technology, ICASISET 2020, 16-17 May 2020, Chennai, India. [online] Google Books. European Alliance for Innovation. Available at: https://books.google.lk/books?hl=en&lr=&id=wmleEAAAQBAJ&oi=fnd&pg=PA43&dq=The+Blockchain+Attendance+Management+&ots=gk75JE817c&sig=2g6P-y5iBBfXd7M2W1HpOechYD8&redir_esc=y#v=onepage&q=The%20Blockchain%20Attendance%20Management&f=false [Accessed 3 Apr. 2024].

•        Yi, C.S.S., Yung, E., Fong, C. and Tripathi, S. (2020). Benefits and Use of Blockchain Technology to Human Resources Management: A Critical Review. International Journal of Human Resource Studies, 10(2), p.131. doi:https://doi.org/10.5296/ijhrs.v10i2.16932.