How Will Blockchain Impact HR?
By
Andrew Spence
Of all the emerging technologies, blockchain is the
least exciting as a technology, but potentially the most impactful on
society. Blockchain doesn’t converse
with you, it won’t 3D print your house or cut out your kidney stones with
precision while the surgeon has a cup of tea. In terms of technology, it is
about as exciting as relational databases.
When you think of blockchain, you might think of
Bitcoin. Bitcoin is a cryptocurrency
that requires a maths degree to buy and ownership of a laptop that never
crashes. Yet Bitcoin is just one of many different cryptocurrencies that uses
blockchain as its core technology. And
blockchain technology is also being used outside of financial services.
What Is Blockchain
and what is it’s value?
Simply put, a blockchain is a decentralised database
shared among a network of computers, all of which must approve an exchange
before it can be recorded. Typically if we want to send someone some money, we
would need a third party, like a bank to verify the exchange. The advantage of blockchain is that it stores
an indelible ledger of all previous transactions in a string of ‘blocks’,
meaning we know who owns what and who can send what to whom.
Individuals and organisations can use blockchain to:
- Exchange digital assets without friction – a central ledger is no longer required which is why there is so much excitement in financial services. Transactions between people can happen nearly instantly without any third party.
- Execute smart contracts – documents can be stored electronically, and be verified as authentic. So we have unbreakable contracts.
- Store digital records – you can have an electronic ID and all sorts of information associated with it, your verified electronic profile
To understand more about how blockchain works I recommend
this great TED talk from Don Tapscott, “How the blockchain
is changing money and business.”
What are the real life uses of a
blockchain?
In
an era where trust has been eroded in our institutions, politicians and even
fellow citizens, anything that can strengthen trust should be viewed
positively. In my article, The Quantified Workplace: Technology vs Trust,
I commented that potentially intrusive technology will be introduced in the
workplace, but only at the speed of employee trust.
Given
its practical attributes of storing digital records, executing smart contracts
and as an efficient exchange, there are many real-life uses and experiments.
This ranges from fixing broken business models e.g. Intellectual property in
music to the more personal, recapturing our identities, so the ‘virtual you’ is
actually owned by you.
There
are also examples of blockchain systems being developed to solve
problems such as human trafficking, tracking blood diamonds and
as a land register.
“Blockchains automate away at the
centre. Instead of putting the taxi driver out of a job, blockchain puts Uber
out of a job and lets the taxi drivers work with the customer.” Vitalik
Buterin, founder of blockchain platform Ethereum
As
Don and Alex Tapscott argue in their book, “Blockchain
Revolution”, blockchain could be the great economic leveller – a
tool to strip out the middlemen from our economy and reward the makers and
doers who truly create value. So there is definitely a group
of political enthusiasts who see blockchain as transforming society.
What’s the potential impact of
blockchain on HR and people management?
Given
the practical attributes of blockchain promising to cut
out middle-men and provide unbreakable contract, what might be the impact
on people management, organisations and work?
In
Japan blockchain technology is being developed to create a prototype resume
authentication database for job hunters with the aim of increasing transparency
and in turn address fraudulent credentials.
“With a resume authentication database, the verification of official certificates and
contracts, which have until now been typically done on paper, could be carried
out using the blockchain database” said Osamu Yonetani, CTO of Recruit
Technologies.
Imagine
having all your employment related details associated with your electronic
signature in one block :- security access, insurance, payroll, expenses, work
performance, employment history, psychometrics etc. The employment
contracting process would effectively be redundant. You could work almost
immediately, with quick payment. The role of the recruiter will not be
needed, but that’s the least of the disruption. This raises questions
about the nature of the employment contract and the ‘job’ itself. Most of us
will then be in the gig economy, enabled by transparent contract and payment
mechanisms.
Chronobank.io, an Australian short-term work
platform, is developing a Blockchain-based financial system for freelancers or
contractors to obtain work and pay them in their own “labour-hour” token. They
aim to disrupt the HR, finance and recruitment industries with their upcoming
platform. I spoke with Sergei Sergienko CEO ChronoBank, who told me “Our goal is to make a difference in the way
people find work and get rewarded for their labour, doing it decentralised and
without the involvement of traditional financial institutions.” This
is potentially transformative, and Sergei’s message to HR leaders was this
change will happen, so find out more and work to develop this next wave for
your organisation.
As
Gary Hamel has said, “our
management structures are not suited for a digital age”
In some cases, blockchain software will eliminate the need for many management
functions.
Which
brings us back to the original question, what’s the potential impact of
blockchain on HR and people management?
Blockchain
could fundamentally change how we manage people and HR, then the impact on HR
is an irrelevant question if some of these predictions come true as we will
have moved to very different economic models.
Regards!
Librarian
Rizvi Institute of Management
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