Blockchain in Payroll and HR: Today’s Key Applications

Blockchain in Payroll and Human Resources is fast proving to be the technological advancement the industry has sought for so long.

This is an exciting new HR-world order.

The application of blockchain in payroll and HR, cannot be underestimated. Traditionally considered to be purely an IT opportunity, payroll and HR are now accelerating its application to the benefit of the organisation, HRD’s, line managers, workers, and contractors.

Gartner recently predicted Blockchain will create $3.1trillion in business value by 2030. Much of this estimation stems from the value it offers based on current operating models. But the greater value will be extracted in how organisations, their customers, people, and other stakeholders interact, create value and exchange solutions over time.

What a time to be in business.

Before we get into the applications of blockchain in payroll and HR, it’s important to have insight into the key characteristics of blockchain per se.

Understanding Blockchain: 5 Key Attributes

Knowing the basics of blockchain, will enable you to better understand its potential application in the realm of HR and payroll.

But don’t worry, you need not be an IT expert, nor do you need a deep technical insight into the workings of blockchain.

According to Gartner:

Blockchain enables trusted interactions between unknown participants by combining five design elements to authenticate users, validate transactions and record that information to a digital ledger in a way that can’t be corrupted by a single participant or changed after the fact.

The five key elements required for true blockchain to exist are:

  • Distribution: The parties involved in the blockchain are connected on a distributed network, each of whom operate what we call ‘nodes’ — a node is a computer software that enforces the predetermined business rules of the blockchain. These nodes keep a full copy of the blockchain ledger activity and everything that is associated with it. When new activities or transactions occur in the blockchain, these nodes are updated automatically.
  • Encryption/Encoding.Technology associated with blockchain records activity data securely and semi-anonymously (where members have aliases). Members can control their personal information, identity, and other details, and only share whatever is required for a specific purpose or transaction.
  • Longevity: Once transactions are completed, they are then cryptographically verified, signed and time stamped. From here, they’re chronologically added to the blockchain ledger and cannot be altered unless all members of the blockchain agree.
  • Tokenisation: Value within the blockchain is exchanged in the form of tokens. These tokens are representative of a broad variety of asset types. These include, blockchain currency (or money), units of data or even the identity of a blockchain member/participant. Through the creation of tokens, a blockchain represents and offers the trading of a native currency that can be transacted.
  • Decentralisation: Within the activity and participation of a blockchain, there is no individual member or entity in control of most of the nodes. Nor can an entity or member individually dictate the rules of the blockchain. Through the application of a group consensus, the blockchain is able to verify and approve all activity and transactions — this functionality removes the need for a central governing power or intermediary.

payroll blockchain

Blockchain in Payroll & HR: Current Applications

Many of the existing applications of blockchain to date, have used only some of blockchain’s attributes. So, its full potential is yet to be realised.

Provided here, examples of the early-stage adoption of blockchain in payroll and HR – which you’ll see offer incredible value in terms of productivity, efficiency and accuracy of data management and transfer.

Blockchain in payroll

Within the blockchain, activities or data transactions are encrypted and stored as irreversible and are hence more reliable, secure, and unable to be changed or subjected to human error. So, when it comes to HR compliance and auditing, the process is greatly streamlined and precise. Compliance reporting accuracy is deeply enhanced. In this context, workers (including FTE’s, contingent, part-time, casual, and temporary) won’t need to rely on intermediaries like their bank to process their remuneration. In the same vein, banks will lose their power to control the flow of money. So, they will no longer be able to skew transaction values as they do currently, via trading. It’s a far more direct transaction, and one that cannot be altered or withheld.

Smart contracts for automated payments

Smart contracts allow HR to remove the administrative burden and potential for human error in processing payroll. The smart contracts sit within the blockchain, and can automatically pay someone for the work completed, based on pre-set parameters. This is particularly pertinent for the contingent workforce.When a worker completes a project milestone, task or timeframe, the smart contract is immediately ignited to process the requisite payment. And this happens without any interference from payroll or HR.

Employee data security and access

Employers have access to and storage of significant amounts of private data on workers – all categories of workers. Within a blockchain, these records can be encrypted and unchangeably recorded – so they’re fixed. This is especially important for records related to medical conditions, leave patterns or performance history. Also, these records can also be shared in tokenised format with members of the blockchain who have be provided with verified permission.

Background checks and employment-history verification

Within a blockchain network, applicants with verified permission can acquire virtual credentials (which means their identity will have been tokenised). This offers an unalterable record of their professional work history. As such, employers who tap into this blockchain eliminate the likelihood of receiving fraudulent employment or contract applications.


Blockchain in payroll and HR, in full flight, has the potential to transform the HR and talent management landscape. As remote working continues to rise across the globe and with borders no longer a barrier to working, blockchain in payroll and HR removes major time, cost and currency hurdles. Crucially, blockchain for payroll and HR offers your business the opportunity to give workers a better experience with your business, giving you a leading edge with your talent competitors.


As one of the world’s leading providers of contingent worker management solutionsCXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.

If you are interested in discussing our insights on blockchain in payroll and HR, and would like to find out more about how we can work together, please contact us.