Explore the possible applications and uses cases of blockchain in Hr!
Beyond finance and banking, blockchain technology has applications that range as far as HR and healthcare. In this article, we are going to study how blockchain technology can be implemented for human resource management systems.
Increasing Significance of Blockchain In HR Amidst Coronavirus
Blockchain technology essentially revolutionizes the way we exchange and interact with value. While blockchain has already been explored for human resource management, amidst the Coronavirus pandemic, its significance has become even more relevant.
Remote teams, online processes, and crashing software are making work-from-home a hassle for companies. Amidst the COVID-19, the online gig economy is becoming more and more relevant with each passing day. Moreover, workers across the globe are unsure as to when their salaries will be credited into their bank accounts. This is an even bigger issue for companies with multiple branches and workers spread across the globe.
Blockchain, to a certain extent, has the answers that we seek during these desperate times. It acts as a tool that enables to create a shared portal for exchanging value in an efficient manner.
Blockchain Use Cases in Human Resources (HR)
Let’s start with how can blockchain be used for Human Resource Management. For this one, we have specifically kept a certain degree of focus on use cases that can help workers and companies during Coronavirus.
Blockchain provides a way for each individual to tokenize their identities. Further, each incident associated with the individual’s life can be recorded on a transparent and secure blockchain ledger. This data is subsequently verified by the associated entities.
For instance- any educational credential or a successful project carried out by you, in your past company, are recorded on the digital ledger. These credentials are further verified by your higher authority or say your college teachers.
This enables a system that employs based on appropriate credit to the project rather than references or favouritism. Moreover, this also helps in reducing fraudulent applications with unverified or false claims on credentials.
Smart Contracts and Gig Workers
It is true that the next era of the economy will see a huge rise in gig workers. In other words, contractual works that are paid in accordance with individual contracts. These workers are not bound to any specific company or region. Instead, the work is mostly carried out remotely and on a contractual basis.
It is estimated that by 2023, 52% of the global economic workforce would practice the gig economy. It is also predicted that after this pandemic, the very landscape of work will shift towards gig economy.
Smart contracts could play a vital role in creating an ecosystem that enables effective functioning between gig workers and individuals or organizations. While there are a number of platforms that allow payments based on individual contracts they are largely centralized and charge heavy commission fees. With smart contracts, two unknown individuals can engage in services with each other without the need for any intermediary platforms to monitor or process.
Payments in Cryptocurrencies
Today’s traditional system involves a number of stakeholders for salary payments, includes a bunch of cheques, and in some cases even going to brick and mortar structure banks for handing out those cheques. With an imposed lockdown in most of the countries, workers across the globe are increasingly worried if they will receive their salaries for these months.
Cryptocurrency enabled payments are extremely simple, easy, and instant. Instead of involving multiple participants, an HR executive can simply send crypto payments into the blockchain wallets for each employee. Moreover, such payments are not bound to geography or time. Hence, with even cross border payments employers do not need to pay heavy transaction fees. At the same time, employees do not need to wait for weeks to receive their salaries.
Taxes and Audits
Companies spend millions of dollars each year on audit and compliance checks in their organizations. Moreover, compliance for taxes in different jurisdictions is a pain-point for the HR department. A number of other factors including bonuses, commissions, overtime pay, sick pay, etc also need to be considered with taxation.
Blockchain and smart contracts can provide automated tax compliance as per various specifications. Tax considerations and provisions become automated as per data fed into the system in regards to each employee. The automated tax compliance using smart contract further makes it easier for audit checks as well.
Blockchain technology has moved far beyond cryptocurrencies. It can bring value to the systems and processes in Human Resource (HR) from payroll to employee benefits, and provide an infrastructure for the gig economy.
At such a vulnerable time, innovative solutions like blockchain would enable to create an infrastructure that supports the changing economic needs. Moreover, the blockchain acts as a tool that would help us to curb the economic impact of this pandemic up to a certain extent.
From the team of Cryptochain Sphere, we would like to express heartfelt gratitude to all the people who are working and helping non-stop. Let’s do our bits. Stay at home and practice social distancing.