The Benefits of Using Blockchain in HRMS
Human resources management involves processing a large amount of very sensitive personal and financial data. HR departments can receive and store information related to payments, health insurance, finance and banking, disciplinary records and more. All of this is at threat of being exploited. With the blockchain, the ability of criminals to access this data is reduced. In many cases, it is virtually eliminated. Since the records stored on the blockchain are decentralized, there is no single place for hackers to access and corrupt the data. In addition, any changes made must be authorized and verified. Blockchain is a decentralized database that allows for secure transactions between parties without the need for a third party. It has been used by many companies to store data securely, and now it’s being applied to HRMS.
Why Should You Care About Blockchain Technology?
There are several benefits to using blockchain technology in HRM systems. First, it provides a more efficient method of storing and sharing data than traditional databases. Second, it creates a system where employees can access their own records, making it easier for them to manage their personal information. Third, it makes it possible for organizations to track employee performance and reward good behavior. Finally, it helps prevent fraud and identity theft.
What Are the Advantages of Using Blockchain in Human Resources Management?
Blockchain technology has been used in various industries to solve problems. In the case of human resources management, it offers several advantages. First, it allows companies to store and share data efficiently. This means that there will be less need to spend money on storage space and bandwidth. Second, it gives employees control over their own information. Employees can access their own records and make changes as needed. Third, it prevents fraud and identity theft. It also makes it easy to identify who is accessing company data. Fourth, it makes it possible to track employee performance and rewards good behavior. Finally, blockchain technology can help prevent fraud and identity theft by creating a secure environment.
How Can Blockchain Help HR Professionals?
Blockchain technology is not just limited to the use of cryptocurrencies. It can also be applied to other areas of business, such as human resources management for.
1. Recruitment
Blockchains can be used to save any kind of data and hence blockchain can be used to store degrees and certificates. The document can be digitally signed and validated the first time, then it becomes part of the blockchain for future reference. Likewise, other transactions such as employment history can also be stored on the blockchain. Since the blockchain is secure and immutable, transactions cannot be tampered with. Once a common blockchain is set up, job seekers can share the key with their employer to access blockchain data and verify details. This makes the recruitment process faster and significantly reduces costs. For workers, it reduces the effort of maintaining and sharing a resume for each job. The employer can quickly find the closest match without the third-party recruiter sifting through hundreds of resumes and then making calls to see if the employee is a match. Additionally, by using smart contracts, the recruitment process can be automated. For repetitive employee tasks such as taxi driver, food delivery, babysitting, etc., the employer can set the rules which can include educational qualification, work experience under the smart contract, including hourly wage. Some psychological tests even help assess a worker's IQ and EQ, which can be coded to select certain personality type employees. If the employee matches all the criteria which can be verified in the job details on the blockchain, the contract can be self-executed and the individual can be assigned. Going forward, this aims to replace legal documents with proper regulations in place. As the data on the blockchain is fully encrypted and timestamped, this ensures the privacy of personal information. Only the employee himself can share the information with the participant of his choice.
2. Talent Management
Employees can add any skills or abilities they have acquired over time, including any references and reviews of their work. It will also help reduce the number of frauds, as employers can see past timestamped revisions instead of the resume. The employer can also know about possible offenders and thus ensure a safe working environment.
3. Time and Workforce management
Employees tend to track time separately and feel that employers are unreliable in tracking time and consider payments to be untimely. Blockchain can improve timing accuracy. The worker can be verified by the biometric data which can be stored on the blockchain and the time can be tracked after verifying the credentials of the worker and no changes can be made to this time by any party. Additionally, the smart contract can be used to block employer funds and direct payment can be issued once the time registration is confirmed by consensus. Easy and quick access to funds can motivate workers and build trust across the system.
4. Compensation
For organizations dealing in multiple currencies around the globe, blockchain can help make the payments to the employees using crypto currency or using tokens that can be exchanged for local currency and help save the conversions, tax and paper processing workload. Smart contracts can be set up to automatically update the compensation after the probation period is over or after the employee receives an increment. This transition can be made for B to B also.
Conclusion
Although blockchain technology is proven, there are few concerns such as regulatory support for its widespread adoption. Moreover, for the full exploitation of this technology, few changes are necessary, because the economy must be digitized; for document verification, the diplomas issued must be digitally verifiable. Requires users to keep keys; if it is the key, data recovery is not possible. Such shortcomings must have a workaround. All in all, there is a lot of room for this technology to grow and make life easier in the field of human resource management.