How HR Departments should start to think about Blockchain
by Melisa Joeleo It Consulting ServicesFor the uninitiated, blockchain is a decentralized system that allows
encrypted information to be shared. The data cannot be modified, and
the blockchain technology it sits on acts as a ledger, keeping track of
what is added. Although cryptocurrency is often most closely associated
with blockchain, industry uses are endless. Fashion companies will be
able to tell in real time if a leather jacket they produced for cold
weather is only worn above 50 degrees. Patients will be able to hold
their electronic health records and give access to providers, not the
other way around. Likewise, HR departments
will no longer need an official transcript from recent college
graduates; blockchain can validate if the former student received their
diploma at that institution. Jeff Mike, vice president and human
resources research leader at Bersin, Deloitte Consulting LLP spoke with
Employee Benefit News about what HR executives need to know about this
emerging technology.
Employee Benefit News: Who are the major blockchain vendors in HR? What are utilization rates like?
Jeff Mike
Jeff Mike
Jeff
Mike: Since blockchain is early in the development cycle as far as HR
applications go, there are a number of startups working on the application of the technology in HR.
In addition, a number of the main human capital management and payroll
providers have started to look into the blockchain applications as
part of their long-term strategy.
EBN: HR is notorious for being
slow to adopt technologies. Chatbots are very trendy in HR technology
right now, but most consumer-facing companies have already deployed
them. Is it realistic that HR departments are going to adopt a
decentralized ledger to handle their job functions?
Mike: It’s
likely that HR will need to embrace a new mindset with regards to
decentralized records as the financial and health care ecosystems
increasingly adopt blockchain technology. Whether it’s blockchain or
another technology, the notion of decentralized ledgers and increased
individual control of data is here to stay, especially with the advance
of the gig economy and non-traditional employment scenarios. HR needs
to start learning more about blockchain and decentralized ledger
technologies and how they could change the way HR manages data and
delivers services to organizations and to individuals.
EBN: Likewise, are recruiters leaning in? Who within the HR space is leading the charge to blockchain?
Mike:
One of the earliest applications of blockchain in HR is in the
verification of credentials, education and backgrounds. Naturally this
applies to recruitment, so there is a lot of discussion about blockchain
in talent acquisition.
EBN: As individuals move around and
continually job hunt, will blockchain signal to HR that their employees
are making moves? I imagine Company A would want verification through
blockchain that a prospective candidate really did get that job
certification through Company B, causing some lack of privacy for the
jobseeker.
Mike: I’m not sure exactly how the technology would
track current employment. I suspect that an individual’s private record
would contain current employment information for purposes of payroll
and benefits. The idea behind blockchain is that the individual “owns”
the record so there would be no reason to contact the employer for
verification once the ledger entry has been made. I recommend checking
with someone who has a deeper knowledge of the technology to verify this
particular implication.
EBN: Are employers asking about blockchain, or are vendors trying to sell it? What does the space look like?
Mike:
I’m seeing more inquiries from employers trying to get ahead of the
curve (as well as analysts trying to capture the next hottest trend in
HR). We need to be careful in HR not to get sucked into overhyping yet
another technology before it’s ready while preparing ourselves for a
broader introduction into the field. The idea of distributed ledger
transactions and identity is going to continue to pick up as our
economic systems continue to decentralize and focus more on individuals.
For example, smartphone developers are currently working on
blockchain-enabled devices that will enter the ecosystem in the
relatively near future. HR should pay attention and work with the
vendors to start preparing for this new technology.
EBN: What are the implications of HR departments using blockchain? Will it replace HCM systems or integrate with them?
Mike:
Right now the potential applications are broad, though again it’s
important to be pragmatic about them and not overhype the technology
before it’s ready. Blockchain offers the potential for a more secure,
verifiable digital identity that is owned by the individual rather than
an organization. Any application that involves a centralized database
record could be affected by blockchain, from core human capital
management, to payroll, to talent management and wellness and benefits.
Given the progress in development of blockchain in financial
transaction applications, it’s likely that payroll-related activities
and verification of credentials and background will be the early
applications.
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Created on May 24th 2018 02:15. Viewed 293 times.