How HR managers use blockchain technology for work improvement

Blockchain technology has infiltrated nearly every sector, yet it is still pretty much unknown when it comes to its disruptive changes. Most people simply relate blockchain with the Bitcoin price, and refuse to adopt a wider perspective as far as its applications are concerned.

In this article, we delve into the use cases of blockchain technology in the HR department. More specifically, we look at the benefits it offers to employers, the workforce, as well as the in-house systems that streamline company processes. Before we do that, however, let’s briefly look at what blockchain technology is.

What is blockchain technology?

The concept of blockchain technology has been explained in multiple ways throughout the years and is usually quite technical in nature. However, for the sake of this article, we’ll try to explain it in simpler terms.

In essence, the blockchain is a digital sequence of transaction blocks that enable all participants of a network to interact with one another. These blocks are also publicly visible for everyone to see, thus increasing transparency and tracking of information. Knowing this, we can already see numerous applications of the technology, in numerous sectors.

How does blockchain technology improve HR?

Human resources are directly related to activities that involve the employees of a company. While such use cases are still fairly limited, we can already see how they will impact the future of this particular department. Let’s delve into some of the top use cases that we can look forward to.

Background and employment reviews

When using a public ledger as a common information point, applicants can receive a digital proof of their employment and background through a process of tokenization. The exact methods used to build such a system are rather complex, but in some ways remind of a more organized and provable form of Linkedin. Braintrust is a company looking to become a leader in this space, and it is worth checking their whitepaper.

Securing employee’s personal information

Companies that employ talent often have access to personal files, such as medical records and history of performance. This information is needed within the company to help provide the best platform for employee success, but should also be encrypted from the public. Blockchains allow only share the information with qualified parties by wrapping the info in a tokenized manner.

Improving temporary employment

Temporary employment is usually paired with specific contracts that outline the exact rights and obligations of the person they are written for. Blockchain technology automates this whole process while it also removes any point of failure or error, through smart contracts. In the context of HR, such smart contracts could automatically release payments to their rightful owners if certain conditions are met (e.g. the assigned tasks are performed). By using these smart contracts, the workforce also knows that the company has offered the funds to escrow before the work begins.

Regulatory compliance

Employees have the right to enforce what is known as “the right to be forgotten” – a decision-making power over their personal data granted by the GDPR. By using the blockchain, they are able to delete their personal encryption key (what is also known as a private key), allowing no third party to ever access their data again.

Employee benefits and payroll

HR is often dependent on third parties to process payments that go towards benefits, as well as salaries and bonuses. With the help of blockchain technology and smart contracts, the need for intermediaries is lifted, enabling a more streamlined process for tasks of this kind, as well as auditing and compliance reporting. To get payment, we can use crypto payment service.

Access to new talent

Currently, finding new employees can be a hurdle, especially when looking to hire employees for remote positions. There are already several blockchain solutions to improve the pool of talent, enabling people from unbanked locations or restricted locations to gain access to financial compensation, thus making it worthwhile to apply for a position. These innovations will likely expand in the coming years, as we see tech growth in many African countries, as well as India.


Blockchain technology is very important when it comes to the functions of an HR department. While the existing applications are not very dominant within companies (most still use legacy systems), we can expect to see a large shift towards methodologies that remove potential failure points. This can be achieved, theoretically, with the use of smart contracts, and further becomes more punctual due to the transparency of the public ledger.

If your industry is in need of system-related solutions, blockchain technology may offer it already. Therefore, it might be a good idea to stop looking solely at crypto prices and profitability charts. Instead, start researching the next trend in your industry and see how blockchain technology can empower it.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.