Every company in the world must be thinking of ways to make use of the disruptive force of blockchain technology. While the financial sector has dominated the headlines over the past couple of years, other industries are beginning to embrace this technology in a bid to democratize markets.
The talent management market has emerged as one of those non-financial sector industries that could benefit significantly from using the decentralized ledger system that blockchain provides.
The human resource industry, in general, has evolved over the years, moving from the traditional paper-based application and processing system to the digital/email-based system, before later moving to the cloud via professional networking platforms like LinkedIn.
And now with the emergence of blockchain technology, which has revolutionized many industries, the human resource industry appears to be next line as companies look to tokenize the talent management market.
How can blockchain improve the HR industry?
In the human resource industry, talent identification, selection, and processing require employers and employees to engage in a lengthy process of data verification. From verifying the candidate’s educational qualifications to work experience, including consulting referees, this can be time-consuming during staffing.
It has also become extremely difficult to accurately verify that whatever appears on a candidate’s resume is a true reflection of their ability. Many have claimed that the entire process is flawed, with some institutions, as large as, Ernst & Young, eliminating degree requirements to introduce new candidate profiling structures.
This might have come as a surprise to some people but considering how complex the market has become, it makes a lot of sense. In today’s market, even less-qualified candidates can get their resumes furnished by professionals that have specialized in providing resume writing help, thereby making it more difficult for recruiters to separate the wheat from the chaff. As such, some employers have been forced to introduce new structures into their recruitment processes.
However, this all could change with the help of blockchain technology. Blockchain provides an encrypted network of blocks where individuals and companies can share information securely thereby enabling recruiters to verify employee data including educational performances and career achievements.
In a report published by Deloitte in June last year, GarETH Brown and Norman Smit highlighted some key areas of the human resource industry that blockchain could disrupt in the coming years. Payroll was among the primary areas targeted with the co-authors saying that blockchain could effectively eliminate the global challenge of international payments that employers and employees endure.
“The long-term inefficiencies of overseas payroll payments can add up. Currency volatility can have an immediate effect on both the employer and employee. Hourly changes in exchange rates are routinely taken advantage of by intermediaries. So time is money, and an international payroll blockchain solution simply offers a faster solution than existing models,” Brown and Smit wrote in the report.
Many companies are already accepting Bitcoin (available on Coinbase) and other cryptocurrencies as a form of payment, so the path to implementing a blockchain-based payroll platform looks clearer than it did a few years ago.
How blockchain can help in the recruitment process
However, the most exciting development in the HR industry about blockchain could be the growing list of educational institutions that are now beginning to provide their certificates on the blockchain. This will assist employers in verifying educational qualifications of short-listed candidates. Instead of contacting educational institutions attended by each pre-qualified candidate, employers will simply be able to get this information from the blockchain network, thereby making the process quicker and less costly.
In addition, this will also give “employees a comprehensive, trustworthy blockchain-based record of their education, skills, training and workplace performance,” says a report published by PWC UK. The PWC report also adds that blockchain technology could enhance fraud prevention and cybersecurity in the HR industry.
The talent sourcing market has been one of the most affected by fraud and cyberattacks following the emergence digital recruitment platforms. Prospective employees have been swindled by malicious individuals and fake corporations pausing as recruitment agencies while employers have ended up recruiting the wrong persons. However, the security of blockchain technology could protect SMEs from falling on the traps of potential cybercriminals. Blockchain technology could limit the threat of cyberattacks thereby helping to secure user data and company systems.
And in the spirit of bringing blockchain to the human resource industry, companies have already launched cryptocurrencies to try to disrupt the market. ChronoBank is one of the first to make the move. It already has 710,013 coins in circulating supply and at the current price of $11.55 per coin, ChronoBank (TIME) now has a market cap of $8.2 million. This is after plunging from a market cap of over $35 million attained early this year.
ChronoBank wants to revolutionize the entire HR industry by “disrupting the HR/recruitment/finance industries in a comparable way to how Uber disrupted the taxi business and how Upwork represented an evolution in freelancing.” The company’s primary focus is to create a revolution in the short-term recruitment in key professions. But this could later be broadened to cover a wider addressable market.
Conclusion
In summary, the HR industry has embraced technology since the dot.com bubble. This has brought with it many challenges including cybercrime, fraud, and bottlenecks in international payments. However, with a global network of decentralized blockchains, the human resource industry could be ready for disruption. ChronoBank is one of the few that have seized the opportunity to create a revolution in the workforce market.