Wherever you turn, someone seems to be talking about blockchain technology and how it’s poised to change the finance industry, among others. So, what is it, exactly — and what other industries could it impact?
Blockchain technology first made a splash in the financial sector with the development of Bitcoin, a virtual currency, in 2009. Since then, Bitcoin and other virtual currencies, such as Ethereum, have received a growing amount of media coverage, for better or worse, as markets in the currencies hit record levels. As attention increased, there have been many attempts to explain the technology behind the hype.
At its core, blockchain is a way of tracking transactions without a central authority.
Let’s say you owe me $5 and you want to send it to me. With blockchain, the verification process is tracked and distributed in real-time across a decentralized network. When you send the money, a program accesses a ledger (distributed across many computers), confirms that the $5 exists and that you have assigned it to me by noting my ownership. Each previous transaction is available for review and because the ledger isn’t stored in a single place, it’s theoretically impossible to forge an entry or counterfeit
Rather than viewing it as a disruptive force, think of the technology as a shift in how businesses and systems operate.
More than a financial tool… eventually
Slowly but surely, applications are being studied that will spread the technology beyond the banking system and into the business world, and that includes HR.
At Monster, we see potential to practically apply the technology to a range of human capital management business challenges.
For instance, if you think of the hiring process, it’s likely that applications, interviews and salary negotiations come to mind. Yet, a significant part of the hiring process is verifying the information a candidate provides. Mostly, this is done by checking references and, maybe, educational credentials. Blockchain may provide another option.
An example is a resumé verification system, which could have employers developing sophisticated employee profiles — essentially, an HR ledger — that could verify performance, work history and other data that would help in determining whether a candidate is a good fit.
Such a system could cut out a significant portion of the time it takes to find, meet and assess a candidate for an open position, which is a boon for a company’s bottom line.
Additionally, this kind of system would be “always-on,” which would mean you’d be assessing a potential candidate based on the skills he possesses, not just the skills he’s added to his resumé. This could ultimately impact the interview process, eliminating the need for the stages of interviews dedicated to skill checks. Instead, interviewers could focus on critical factors, such as cultural fit, goals and aspirations and the intangibles that contribute to a company’s success.
The weakness in the distributed resumé lies in lower-level employees who don’t necessarily have a job history that demonstrates their value to an organization. However, blockchain could be used to provide verifiable information on a candidate’s educational history and qualifications to reduce the risk of fraud while eliminating the need for applicants to provide official transcripts.
Such a drastic transformation of the way we hire would require changes in the way we run that function. Legal and regulatory advancements would be needed to protect employees’ privacy while still making the service useful for businesses.
Beyond the benefits to HR, blockchain is poised to transform the way business is done in other areas. This applies to any function dedicated to transactional
administration — such as accounting, supply chain management or legal. For instance, smart contracts — self-executing programs that track the terms of agreements — could eventually eliminate the need for legal involvement when vendors fail to deliver on their obligations.
Such shifts would necessitate a change in the structure of a business, as well as staffing requirements, which the HR function would naturally lead. Functions within a company dedicated to verification, administrative documentation and co-ordination of those functions would be unnecessary. Blockchain has the potential to reduce transactional costs financially, and in terms
Preparing for tomorrow
While HR professionals won’t need degrees in advanced engineering or computer programming, the need for some familiarity with technology will increase as technologies play a larger role in business processes. We’re already seeing opportunities for “workplace translators” — employees who can bridge the space between engineering or technical language and business jargon.
Academic institutions are introducing cross-functional courses and degrees that marry data analysis and programming with business education. Most Canadian business schools offer degrees in business analytics, while the Smith School of Business at Queen’s University in Kingston, Ont., recently announced a master of management in AI.
As data and machine learning play an increasing role in business decisions, the demand for such degrees will only increase.
Blockchain’s applications for HR are currently in the theoretical stage, but it’s important for professionals in the industry to imagine how it could affect various functions such as hiring, training and talent management. Evolving business structures will also necessitate massive transformations within organizations as the demands for certain functions will be lower, and for others will be greater.
The key question you might ask is: When will this happen and how do I prepare for it? Unfortunately, there is no single answer. Larger employers that carry out and track many complex transactions will likely invest in the technology more quickly to lower transaction costs. Others may never find the benefits are worth the cost.
As with most technological innovations, we can’t know for certain how the rollout will affect us in the long-term. What is important is gaining a solid understanding of emerging technology and staying up to speed on the ramifications to business. This can help ensure that when change comes, you’re ready to embrace it.
Angela Payne is senior vice-president and general manager Canada at Monster in Toronto. For more information, visit www.monster.ca.
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