Human Resources & Blockchain Technology

Technology is cool, right? Don’t you just love the drop-cap T at the start of this paragraph? It’s a new feature in’s Gutenberg Editor. You just click a button. You can do it on any paragraph, every paragraph, if you want. It works well on the first paragraph, but any more would be overkill, right? That raises a key question about technology: Should we do things just because we can?

I was faced with that question many times in my computer consulting career in which I specialized in Human Resource Information Systems (HRIS). So I took a special interest in a reader’s response to my last series, Digital Marketing & Blockchain Technology. A friend and colleague who’s known me since those days emailed me this question: 

Roger Oliver, Director
Strategic Accounts

Any insight on how use of blockchain technology will impact and (I assume) improve the efficiency of HR practices?

After quite a bit of research, three specific areas within the HR function came into view as potential candidates for blockchain solutions:

  • International Payroll
  • Resumé Verification
  • Smart Contracts

Here’s how that Polaroid developed:

International Payroll

Not only are large corporations globalizing at an unimagined pace, but sole proprietors and freelancers are now doing business remotely for foreign clients in a way never before seen. Currently, cross-border wage payments have a number of points of friction. 

Bitwage is a startup that processes payments across borders using bitcoin. Their goal is to reduce the regulatory and processing hurdles between international parties, while reducing the time to collect with a streamlined invoicing and payment system, as well as mass payroll processing. They seem to be moving in the direction of B2B contract settlements as well. It’s free to sign up and well worth investigating if you do business outside of your home country. 

Resumé verification

A major challenge in several industries is verifying candidate and employee qualifications, degrees and certifications. Any group with professional liability issues is at risk of hiring and/or employing someone misrepresenting their pedigree. Doctors, lawyers, engineers and pilots are just a few specialties where you wouldn’t want to discover a disturbing truth after they’ve done the work.

Blockchain systems are currently in development that will allow legally-empowered agencies such as colleges, universities and professional organizations to authenticate your resumé data (degrees, licenses, certifications, employment history, etc.) so that any stakeholder, and perhaps even the general public, can make a hiring decision with confidence. 

In a testament to this idea, MIT has begun issuing a certifiable, digital file in addition to the frameable, parent-worshipped paper version of students’ diplomas.

Self-sovereign digital identities

However, what happens to personally identifiable information (PII), such as someone’s verified credentials or even payroll? That’s where self-sovereign IDs (SSIs) come in. To put it succinctly, your PII would not be exposed to other users or devices. Your SSI would connect your authenticated resumé to an interested party through a digital key that you would control, granting access only to information that you approve.

Smart contracts

Another area that is showing promise is smart contracts, in which pre-ordained agreements are written into lines of code administered by a blockchain.

Imagine a traditional bank escrow account that has negotiated rules governing deposits and withdrawals triggered by specific events and often outlining specific uses of the money. The only problem with escrow accounts is that humans have to oversee them. Even though escrow agreements are often quite specific, disputes can still arise over whether various terms of the agreement have been met.

Smart contracts use a blockchain to govern all aspects of an agreement, so that, for example, when goods are tagged as having been shipped, a payment is automatically triggered, without the need for human intervention as would be the case in a workflow approval process. One potential application for HR is that incentive programs, such as bonuses and referral fees, could be processed automatically without the fear of politics or corporate dysfunction intervening. Such a system could contribute to higher employee satisfaction.

try this on for size

An employee could register a friend’s resumé in a referral system. That system would take the friend through the application process. A connected process could validate the candidate’s credentials, while a third would process a referral bonus upon completion of the new hire’s probation period, all through an auditable, autonomous and untamperable blockchain. Et voila!

I’m not sure that blockchain will stand HR on its head, but there sure are some intriguing possibilities. The key will be finding those processes and systems that should be in the blockchain. In my view, not all qualify.

I hope you’ve enjoyed this article. I’d love to know your thoughts. I look forward to hearing from you!


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