How blockchain will disrupt HR

How blockchain will disrupt HR

Disruptive technology, an innovation that significantly alters the way consumers, industries and businesses operate in to embrace the new fast growing technology - blockchain. What is Blockchain? Blockchain is a public ledger of information collected across a peer-to-peer network. In simple terms it is the technology that underpins digital currency like Bitcoin, Litecoin etc. It is used to record transactions across so many computers so that any involved record cannot be altered without making alterations to all the subsequent blocks. Blockchain has the power to create disruption in the HR space and revolutionalise the way in which HR professionals perform many of their daily tasks.


Blockchain has the most potential to impact the HR community with more accurate and effective approaches to everything in HR such as transformation of workforces – the skills needed. According to a report from PricewaterhouseCoopers, blockchain’s effects on HR will be “profound and pervasive – not least because of its impacts on talent and skills.” The processes most appropriate for digital transformation through blockchain are likely to be those that are slow, cumbersome, labour-intensive and expensive due to the need for significant data collection and third-party verification. These will be resolved by the blockchain pros which are:

  • Improved accuracy by removing human involvement in verification;
  • Cost reduction by eliminating the third-party;
  • Decentralisation makes it harder to tamper with;
  • Transactions are secure, private and efficient;
  • Transparent technologies.

The following are ways in which blockchain can be used for disrupt HR usefully to your organisation:


1. Recruitment




Blockchain will make resumes and LinkedIn obsolete by storing all of a person’s employment history. This will impact how companies recruit candidates as they will simply pull up the public blockchain where they can get more background information about the candidate including performance indicators e.g. the employee was promoted or the reason why they left a company. This new talent acquisition approach will take out subjectivity out of the hiring process and the candidates will not adjust their resumes on the specific job they apply to. Blockchain can document the candidate’s failures and successes, encouraging them to embrace those failures and not just leave them out. This information will help companies to make better informed decisions and allow strong performers to rise to the top. Blockchain in recruitment will give employers access to candidates educations, skills, trainings and workplace performance if implemented and employers will be able to match roles accurately and effectively by applying analytics to the readily available data.


2. Payroll

Blockchain can also impact payroll, however, currently there are laws that govern pay and how it is delivered which are stalling the process. Since there are several intermediaries such as banks and third-parties involved in the payroll process, the process can be a bit too costly. However, if pay can utilise cryptocurrencies which are reliant on blockchain technology the payroll costs could be reduced.  In an article published by Deloitte, the authors stated, “The long-term inefficiencies of overseas payroll payments can add up. Currency volatility can have an immediate effect on both the employer and employee. Hourly changes in exchange rates are routinely taken advantage of by intermediaries. So time is money, and an international payroll blockchain solution simply offers a faster solution than existing models.”


3. Fraud Prevention, Cybersecurity, and Data Protection



HR deals with massive personal and financial data which makes them a target for hackers and other cyber criminals. Blockchain’s pros cripple the cyber criminal’s abilities to hack and cause chaos with this type of data. “Blockchain’s use of consensus to establish facts helps to squeeze out fraud. And given that cyber risks can spring from an underlying lack of transparency in systems and data, the threat of cyberattacks is a further challenge that blockchain an help address.” says the authors from PWC. 


In conclusion, is blockchain a disruptive innovation? Blockchain is indeed a disruptive innovation and it is like a permanent diary that is almost impossible to forge which HR professionals should start embracing now or risk being left behind. Clearly there are many ways in which blockchain will impact and revolutionise HR and it is inevitably going to happen! As HR professionals there is need to start to include blockchain together with other emerging technologies in formulating digital strategies as this is the future of HR.


Kudzai Derera is the Business Systems Manager at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.


Phone: +263 242 481946-48/481950

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Kudzai Derera
Super User
This article was written by Kudzai a Super User at Industrial Psychology Consultants (Pvt) Ltd

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