The Future Relationship Between Blockchain Technology & Human Resources

“Blockchain” is a term that you may be hearing a lot of lately, but what exactly is a blockchain?

Simply put, a blockchain is a chain of blocks that forms a digital ledger. Instead of being stored within a single database, blockchain information is distributed across a large peer-to-peer network. Once information is recorded in a particular block, it is virtually impossible to change. Any changes to the information must be recorded by creating a brand new, timestamped block that is connected to all previous blocks. This prevents the possibility of erasing past information.

Because of its various methods of accountability, blockchain technology is very useful for keeping track of information in a digital format. In 2017, the World Economic Forum suggested that we can expect up to 10% of the world’s gross domestic products to be stored on the blockchain by the year 2025.

Although blockchain technology is new to most of us, it has been around since 1991. It was first developed to maintain digital timestamps on documents. This technology resurfaced in 2009 as a way to securely track Bitcoin transactions. Blockchain technology continues to be refined and repurposed to make everyday processes easier for a variety of industries. Any field that relies on obtaining accurate information will benefit from the future advancements in blockchain technology.

A Brief Introduction to Blockchain Technology

Blockchain technology is an effective way to keep information digitally protected. Each block has three parts--the data, the hash, and the hash of the previous block in the chain. The data is simply the information that is stored within each block.

The next component of a block is the hash. The hash acts as the block’s unique identifier; no two blocks can have the same hash. Each block will also contain the hash of the previous block. This is what connects each block in a particular blockchain. The only blocks that do not contain the hash of a previous block are genesis blocks, which are the first blocks of each blockchain.

How do blockchains protect secure information?

Blockchain technology includes numerous security measures that prevent tampering. If a block in the chain is tampered with, its unique hash will change. This will disrupt the chain and render each subsequent hash invalid. In order to successfully tamper with a blockchain, a hacker would have to change the hashes of each block within the chain to make the hacked blockchain valid.

Blockchain technology has a consensus algorithm called proof-of-work that slows down block creation. Proof-of-work uses cryptographic encoding to create new blocks that must be validated by the peer-to-peer network. Within peer-to-peer networks, each member receives a copy of the blockchain, and each member must approve any changes to the information. If any information within the blockchain seems suspicious, the members of the peer-to-peer network will reject it.

All in all, a hacker would have to go to great lengths in order to alter or falsify information in a blockchain.

How Can Blockchain Technology Serve the HR and Staffing Industries?

Although blockchain technology first gained popularity as a method of keeping track of Bitcoin transactions, blockchains can be used to store many different types of important data. For instance, blockchains can be used to store land titles, medical records, loan information, digital IDs, copyrights, and other forms of personal and business information. Due to the accuracy and ease of accessing this information, blockchain technology has the potential to revolutionize the human resources and staffing processes.

In the staffing and human resources sectors, blockchain technology will make the verification of employee information much easier. How awesome would it be if there was a blockchain database available to a peer-to-peer network of HR professionals? This could be a private blockchain that enables hiring managers to access and verify candidate information throughout the hiring process. Each candidate’s blockchain could be passed along and updated among the hiring departments of each company that they work with throughout their careers.

These blockchains could store identification verifications, employment & certification information, salary histories, educational information, reference statements, past incident reports and more. This would streamline the interviewing, hiring, and on-boarding processes by reducing the load of paperwork and phone calls that must be completed in order to verify data.

Fudged resumes and exaggeration would be a thing of the past due to the difficulty of altering past blocks. In fact, it is possible that resumes themselves would be obsolete since this information would be easily accessible through the blockchain database. Each candidate’s blockchain would simply be updated as they move throughout their careers, highlighting their experience, accomplishments, and attained skills. A blockchain database for HR professionals would eliminate the occurrence of bad hires and may uncover great talent that goes overlooked due to poor resume writing skills.

Blockchain technology will also make the payroll process easier. Companies such as WorkChain.io are developing technology that allows for immediate, on-demand payroll processing. According to this company, processing payroll using blockchain technology will be easier and more cost-effective. It may also contribute to the growing prominence of gig-based working.

Blockchains can also be beneficial for employment candidates. Public databases could be used for storing information about your company that potential candidates may find necessary when deciding on an offer. They may be able to find out more about your employee retention rates, salary rates, and statistics about their possibilities for promotion within your company. Blockchain technology will require transparency from everyone involved in the hiring process. Hopefully, it will lead to establishing better matches between potential employees and employers.

The Future of Blockchain Technology

All in all, blockchain technology will make it easier for everyone to access trustworthy data. Blockchain technology is not foolproof, but it is being continuously refined and repurposed in order to provide more cost-effective services for a variety of business processes. It will be interesting to watch this technology continue to develop and make our lives easier.