How Blockchain Technology Is Revolutionizing HRM

HRM (human resource management) is an unlikely candidate for blockchain improvement. As hard as it is to believe, however, the same technology that powers cryptocurrencies is now being used to improve the safety and security of human resource departments around the world.

Studies show that blockchain technology can prevent internal fraud and external cyber attacks on employee records, restricting access and preventing unauthorized individuals from learning sensitive information about staff members.

Personnel records need to be kept safe as if they leak employees could take legal action against the companies they work for. Here is some more information about how blockchain technology is revolutionizing HRM:

Attracting Qualified and Experienced Employees

One of the main advantages of integrating blockchain technology into your human resource department’s operation is that by doing so, you will attract high-quality employees concerned with security and data integrity.

According to one expert blockchain head hunter, Harrison Wright, building a platinum-tier team should be one of your main concerns.

Employees with enough skills to be classified as platinum-tier are usually just as concerned about security as the businesses they are applying to work for are. Leaked employee records can be disastrous, as criminals often use them to commit fraud.

Safer Financial Transactions

Most people are aware of human resources’ role in procuring and onboarding new employees. Another of the department’s responsibilities that is less known is processing high-volume financial transactions.

When large amounts of money are at stake, security is vital. At this very moment in time, cybercrime has never been more common. Businesses are targeted and hacked on a daily basis, with financial sector companies being the prime targets.

The easiest way for cybercriminals to profit is to target insecure financial transactions. Integrating blockchain technology into payment processing makes interception impossible.

Payments to third parties and other businesses are not the only things criminal gangs target, however. In recent years there have been a number of attacks on employee payments.

As human resources double as payroll, incorporating blockchain into monthly salary payments can reduce the chances of employee payments being rerouted and stolen.

Protecting Personnel Records

As mentioned a few times, personnel records need to be kept in a safe and secure location so they cannot be stolen. If your company records are stolen, criminals can access copies of your employees’ passports, bank statements, and utility bills. All of these documents are scanned and saved as part of onboarding.

If personnel records are stolen, then not only will it reflect poorly upon you as a company but it will also likely lead to an investigation. Regulatory bodies require companies to take precautions against leaks of personnel records.

Any leaks, therefore, can be all regulatory bodies need to justify conducting an investigation into your company’s data management.

Another consequence of records being stolen and leaked is that employees will then be able to take legal action against your company; you will likely be ordered to pay compensation to employees whose data you do not protect.

Creating Safer, Smarter Contracts

Contracts are an important part of business. Employees sign them when they join a company, enterprises sign them when they collaborate, and employees who’re being fired or made redundant are often required to sign them verifying they will not then work with the competition or share sensitive information.

Not only can blockchain technology make contracts safer, but it can also transform the way they are made by eliminating the requirement of contractual performance interpretation.

The blockchain allows for smart contracts, which are programs stored on the blockchain that run when predetermined conditions are met. More often than not they are used to automate the signing of contracts, notifying individuals involved when the contract has been completed.

Again, they also make the contract signing process a lot safer, which is a massive bonus for businesses today. Contracts signed through the blockchain are also encrypted.

Industry Regulatory Compliance

As mentioned in an earlier point, regulatory compliance is essential in business today. Not adhering to the rules introduced by regulatory bodies can lead to fines and legal action being taken against companies. Regulatory compliance is not something many business owners think about or even learn about until it’s too late.

As a business owner, you should take the time to educate yourself about your industry’s compliance regulations. Not doing so could ultimately lead to fines and penalties being issued.

Blockchain technology can be a highly effective way of adhering to your regulatory body’s compliance rules. While most bodies do not have specific rules mandating the use of blockchain technology, as it is highly secure it is something that they look upon fondly.

Incorporating it into your business’s operations will improve your reputation and make you look a lot better if investigations do occur.

Better Data Management

As a business owner, data management should be one of your main concerns. If you don’t take steps to protect your business’s data then it could end up being stolen.

It is not an understatement to say that data is your business’s lifeblood. Many organizations do not understand its importance and therefore do not take steps to protect themselves.

Blockchain technology is just one way of keeping your data secure. Another is to hire a managed security service to monitor your systems, preventing leaks and hacks from occurring.

One other thing that you need to know is that most leaks occur internally. You, therefore, need to carefully vet employees, thoroughly investigating their backgrounds.

Experts advise performing criminal record checks on all of the people applying for jobs in your business. If you do not perform these checks then you could end up hiring unsuitable, criminal individuals.

A very easy way of having these checks performed is outsourcing to a hiring agency. These agencies can conduct extensive background checks on all potential candidates, finding out whether or not they have unsavory histories or pasts.

Finding this information out early will then give you the chance to obstruct and block people from joining your company. Extensively vet any recruitment companies you are planning on hiring so you can find the most qualified, experienced ones.

To effectively run a business in the modern world, security needs to become one of your main concerns. Unless you are making a consistent effort to keep company information and data secure, it could fall into the wrong hands.

Cybercriminals and hackers are always on the lookout for targets. Don’t become one.