How Can Blockchain Benefit Human Resource Management

Asia Blockchain Review

September 4, 2019

How Can Blockchain Benefit Human Resource Management

Blockchain is the technology that might push human resource (HR) management further up the path of improvement, growth, and efficiency.

To a large extent, the survival of a business depends on the viability of its workforce. 

But to put together a truly productive team of employees, an organization has to manage two critical processes well. And that is the onboarding of new talent and its nurturing for optimum utilization.

The process of hiring and nurturing needed talent is the responsibility of the human resource (HR) management, clearly a critical department in any organization.  

Quoting Forbes Human Resources Council, a membership organization for senior-level HR executives from different industries, “If employees are the lifeblood of an organization, the human resources department is its central nervous system.”

Companies and organizations spend billions of dollars annually on HR and related activities. 

Technology, over time, attempted to improve HR efficiency, with a lot of success. Most organizations now rely on elaborate IT systems to manage everything about their workforce. 

But there is still more that can be done. 

What blockchain can do to HR

Blockchain has often been presented as a magic wand. It is not, but it can do a lot of things to make the work of the HR manager easier and more objective. 

The following are some of the ways the technology can improve HR management. 

  • Make it easy to prove identity

The very first step in the hiring process is the identification and proving that applicants are who they say they are.

The blockchain offers an opportunity for people to have sovereign identities whose credibility is beyond reproach.  

Blockchain applications like Civic allow for independent verification of tamper-proof identity that one can carry around and present to potential employers. 

As part of the application, a candidate could offer the HR department access to their third-party verified identity on the blockchain using a private key only they can have. 

  • Make it easy to proof qualifications

Fake academic and professional certificates are something employers around the world have to grapple with. 

Some of the certifications are elaborately designed that it takes more than a casual look to tell whether they are genuine or not. 

Often it takes reaching out to the issuing institution to confirm the authenticity of a certificate. But it also often turns out that those institutions are fraudulent themselves.

With the blockchain, institutions have an easy and less costly way to publish the certificate they issue online. More importantly, third party entities like the government can vouch for the authenticity of the documents.

Also, the documents are accessible to HR with a private key an applicant provides.

And an employer can verify a certificate issued anywhere in the world in a matter of minutes.  

  • Facilitate employee engagement through smart contract

With blockchain, it is easy for the HR department to automate most of the interaction between itself, the finance department, the employee and other departments through smart contracts.

In particular, it is easy to automate payment so that HR doesn’t need to intervene. For example, a smart contract application can release payment to an employee when predefined conditions are met, such as appropriately clocked time.

  • Improve privacy, cut costs and secure employee data

The technology provides more control, privacy and security for data. Once recorded, data becomes immutable. It can’t be manipulated by anyone to suit the desired outcome. 

It also adds significantly to HR going paperless, and that significantly cuts the cost of running the department. This is especially important for small businesses that do not have huge budgets to set aside for HR.

Blockchain Human Resource Management Use Case

There are dozens of startups and projects building applications on the blockchain that support hiring, managing and motivating talent are on the rise, and the list is growing. 

Notable names include Chronobank, Reward, and Truebase. Others are Aura Lab, Eminently and HireMatch.

With the adoption of blockchain going mainstream, we are bound to see more applications targeting specific areas of human resource management. 


About Asia Blockchain Review

Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. It aims to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

Our goal is to cultivate and encourage a collaborative community for our members to gather, share their experiences and endeavors in the blockchain space, and brainstorm the potential uses of blockchain technology.

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About the author
Asia Blockchain Review

Gateway to Blockchain in Asia

Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. We aim to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

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