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Block-what? Understanding Blockchain and Its Impact on HR

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Aspects of HR that are likely to be affected by blockchain and what that will mean going forward within the industry

HR is probably not the first industry you’d associate with blockchain technology. But, if we have learned anything from various HR tech conferences recently, it’s that blockchain, among many other disruptive technologies, looks set to impact the way the HR industry operates in the not too distant future.

Blockchain was originally introduced as the technical backbone of digital currency, Bitcoin. According to tech intelligence giant, IDC, blockchain can be defined as:

“A data store that is distributed across a network among participants that are able to come to a consensus on the validity of transactions”.

Essentially it’s a shared database that stores irreversible data that’s accessible to a certain group of people and is duplicated across a number of computers and servers globally.

But, beyond all the technical jargon, does blockchain mean anything for the HR industry?  

A recent report from PWC outlined four areas of HR that will be most heavily impacted by the introduction of blockchain:

  • cross-border payments and mobility;
  • talent sourcing and management;
  • productivity gains;
  • cybersecurity/fraud prevention.

These are all familiar and relatable challenges for HR professionals globally and, experts are predicting that the technology could be in use within 18-24 months.

I think we’re still at least two to five years away from seeing any useful applications of it in HR, but there are definitely potential benefits coming to light.  

Here are the key HR functions I predict will be revolutionised by blockchain.

Payroll and cross-border payments

There are a number of HR processes that could benefit from the introduction of blockchain. This is particularly true of the tasks that can be relatively straightforward in a domestic setting but come with challenges when conducted internationally, such as payroll - as referenced by the PWC report.

In this case, blockchain could assist with managing the complexities of differing tax obligations in multiple countries and potentially, \open up the opportunity for organisations to create their own corporate currencies.

The technology can also offer organisations data integrity via a digital ledger, something cannot be guaranteed with other data sharing methods. This means that as data is transferred, HR professionals have peace of mind that they are meeting governance requirements at every step without the risk of information being altered.  

Employment contracts

Typically, a certain amount of back-and-forth around approvals and discrepancies will get in the way of an employment contract being signed by all parties involved.

Blockchain could replace the mediator role and convert contracts ‘smart contracts’, that are stored and replicated on the system and overseen by the network of computers in the blockchain. Very technical, I know!

These smart contracts will be similar to a traditional contract, in terms of the conditions and penalties involved, but could simplify the process by eliminating the need for lawyers’ which will lower costs and increase the speed of completion.


As the issue of protecting our organisations from the threat of a cyber attack becomes increasingly important, it weighs heavily on the shoulders of HR teams globally.

It is, after all, an organisational department with access to a significant amount of personal data around potential and existing employees.

The decentralisation of information on the blockchain database means there is no centralised version for hackers to corrupt. It will allow the transparency and ease that will enable us to make use of the employee data we collect while eliminating any potential security and privacy threats.

While there is great promise in the use of blockchain for recruitment and HR professionals, the reality is a little more challenging.

The likelihood is that, in the short term, we will see blockchain applied in its simplest form to verify, record and document employee details. There are a number of legalities and compliance issues that are still to be ironed out before it becomes a universal reality for organisations.

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