News headlines this year have been much ado about the rising and falling price of bitcoin – not least in Asia, where countries like South Korea have seen the craze for “crypto” reach a fever pitch. The East Asian nation has even birthed “bitcoin zombies”; workers who obsessively check the price of their coins around the clock.
Certainly, that is one clear example of how bitcoin is relevant to HR’s interests. But amid questions of the long-term sustainability of bitcoin, it seems that the real paradigm-shifter – the catalyst driving change in HR and other business functions – is blockchain, the underlying concept and technology that powers cryptocurrencies.
Essentially, every bitcoin transaction, anywhere in the world, is recorded in a digital ledger. This ledger is public, but transactional details can only be seen by the direct parties involved. The blockchain ledger is continuously growing, but each new block contains an algorithmic fingerprint, along with transaction data.
The blockchain is also decentralised, being distributed across peer-to-peer networks. As such, proponents argue, it is one of the best ways to secure transactions – with it in hand, one no longer has to rely on “trusted” third parties.
Supply chain management companies have been some of the first movers in recognising blockchain’s potential beyond cryptocurrency. In a recent chat with HRM Magazine Asia, Saskia Groen-in’t-Woud, Global Chief Operating Officer of logistics giant Damco, explained its potential for the logistics business.
“Blockchain provides a path towards ledger-based accounting. It basically says, ‘you and I have an agreement, you can see me pay you, and I can see you receive the goods’, in its basic format,” she says.
That means that a logistics player like Damco can create an almost completely self-service freight forwarding business – and indeed, its parent Maersk, has tied up with IBM to explore how that can be made a reality. Educational institutions like the Massachusetts Institute of Technology have already leveraged this feature to create “BlockCerts”, which enable students to be “curators of their own credentials”. Through the blockchain, they are able to quickly retrieve permanent and tamper-proof copies of their records to show employers.
Meanwhile, beverage titan The Coca-Cola Company, recently announced that it would be partnering with the US State Department to fight forced labour via blockchain technology – one of multiple projects it has been digging into for the last few years.
“We are partnering with the pilot of this project to further increase transparency and efficiency of the verification process related to labour policies within our supply chain,” said Brent Wilton, Coca-Cola’s director of global workplace rights.
The food and beverage industry has been criticised for not doing enough to address forced labour conditions in countries where it collects sugar cane – the world’s largest agricultural commodity. Almost 25 million workers around the world are in forced labour situations, with almost half located in the Asia-Pacific.
Under the partnership, a secure registry will be created to log workers and their contracts, with blockchain’s digital ledger technology providing validation and digital notary facilities.
New kids on the blockchain
And it starts all the way from the beginning of an employee journey. A public blockchain could potentially store a candidate’s entire employment history as a series of transactions – available only to the candidate and anyone they choose to share the information with, such as recruiters and potential employers. This would make it much easier and quicker for the talent acquisition function to source qualified recruits, looking through a central and secure database rather than sifting through mountains of CVs and applications all with different styles and formatting.
It would also streamline the verification of a candidate’s identity, educational background, visa status, and maybe even salary history. It would be cheaper, since it would eliminate the need for onerous intermediary-managed background verification.
Indeed, recent months have seen the launch of several digital jobs platforms claiming to leverage on this very potential of blockchain.
These include Mintly, a start-up job portal based in the southern Indian state of Tamil Nadu. It claims to use blockchain to link employers with candidates.
Job.com, an international jobs matching site with more than 60 million users, recently announced that it would be progressing to a blockchain-based platform “with the mission of eliminating recruiters’ roles in the permanent hiring process”.
“Blockchain offers decentralisation and peer-to-peer, which is the key to successful, time-saving recruitment, and will allow the industry to shift towards greater efficiencies, security, and trust throughout the supply chain,” Arran Stewart, Job.com co-founder, tells HRM Magazine Asia. He notes that the advantages of a blockchain-powered platform were in speed, trust, and security.
“Allowing companies to deal directly with their next hires means that they can hire more effectively and quickly.” He adds. “Every day wasted on unsuccessful placement costs companies billions of dollars.”
Talao is yet another blockchain-based job marketplace, although it is particularly dedicated to linking up freelancers with clients.
“Blockchain decentralises the internet, enables peer-to-peer business relationships without middlemen or commissions, and gives users ownership of their data,” says Nicolas Muller, Talao’s CEO.
Interestingly, Talao plans to self-finance by launching its own TALAO cryptocurrency token.
“The TALAO token is required for talent to open and manage their ‘reputation vault’, storing Blockcerts certificates certifying their skills on the blockchain,” Muller explains. Company clients can also use the token to access this information, along with other data.
Once an organisation has found the talent it wants to hire via the blockchain, smart contracts can be used to draw up instantly-validated agreements. Meanwhile, a “value passport”, which stores personal job history, can enable paperless on-boarding – making otherwise tedious processes far less laborious. The passport can even be continuously updated and managed to reflect pay rises and other pertinent information.
Blockchain also offers an interesting payments solution for multinational companies, or even single-market companies that have contingent workers from around the world – a not-unlikely possibility as freelancing, project work, and employee mobility in general become more widespread. At present, sending payroll overseas is an expensive process fraught with various middlemen. Exchange rate fluctuations add an additional level of volatility.
There is already a service that uses blockchain to facilitate cross-border wage payments, albeit using bitcoin. Bitwage, which was founded in 2013, performs more than $1 million in payroll transactions for businesses and their workers all over the world. Bitwage allows both sides to send and receive funds in their own currency, merely using bitcoin as a mule, although it also provides a service that helps employers pay out wages in the form of bitcoin. Bitwage even provides a clouds savings account that allows customers to store their pay in any one of 20 different currencies or four different commodities.
The future today
At its core, blockchain is not much different from artificial intelligence or other rising stars of technology, in that it provides opportunities to remove low-hanging fruits from a HR professional’s to-do list. By taking on these lesser tasks, time is freed up to delve into the value-adding skills that no technology can replace: that face time with workers on the ground, allowing HR to truly understand the business, and act as advisors and consultants. There’s also the cost element, of course, that comes about from removing third-parties, whether they are recruiters or wire transfer services.
Being an emerging technology, much of the discussion around blockchain’s future is still very much blue-sky in nature. Its much-vaunted “iron-clad” security is still under some debate.
As security analyst Steve Wilson notes, “once committed to the blockchain, transactions are indeed immutable, but the veracity of each entry rests on who controls the private key of each account”.
Nevertheless, employees themselves are certainly interested in blockchain, and its potential implications on their workscopes.
In a recent ComtelPro employee sentiment survey, close to 70% of respondents were interested in receiving blockchain training, while 65% believed the technology could lead to job displacement within the next five years. On top of that, almost half of Singaporean employees (48%) believed that they needed to adapt their current skills and experience in order to embrace digital and technological change over the next five years.
“While the potential job displacements may create uncertainty in the workforce, this can also lead to the upskilling of employees,” says Satish Kosaraju, Director of ComtelPro.
“Upskilling is obviously one of the key contributors to staying competitive, and both employers and employees can better evolve themselves to fully embrace the digital economy.”
After all, it’s very possible that in 10 years, blockchain is no longer the new kid on the block, but rather, something just as ubiquitous as the internet or social media. As HR – and every profession – grapples with blockchain and all the many other disruptors that characterise HR 4.0, history is watching. Now is the time for the innovators of HR to take their shot, and get ahead of the game.