HR Information Management through Blockchain: What breakthroughs can we expect?

Global B2B cross-border transactions on blockchain will increase dramatically over the next few years and will reach 745 million by 2025. Find out more here about what to expect and how HR can co-evolve with technology.

Human resource management has the ability to co-evolve with technology. Its core function to attract, motivate and keep employees in their roles has extensive administrative duties that are largely labor intensive. Since the first computer-based systems were developed for HR to automate payroll and manage employee records in the 1940s, the rise of desktop computers in the 1980s and the arrival of the Internet in the 1990s, new workplace technologies continue to emerge impacting not only HR management’s functions and processes but as well as other industries and new markets. 


HR management’s competitive and demanding field constantly requires up-to-date processes wherein the application of information and communication technology helps create smart and innovative solutions for employee information management and HR communication strategies. The transformation of both HR processes and technology over the years resulted in the development of an integrated and interactive system called Human Resource Information System (HRIS), a software that organizes all workforce management activities such as talent acquisition, recruitment, training, payroll, etc. Presently, the advent of blockchain has sparked conversations about how this technology can disrupt the business processes of global industries particularly human resource management. HRIS significantly transformed human resource operations, and adopting blockchain in HR information management, which is part of the inevitable technological evolution happening at the moment, is expected to generate groundbreaking improvements in the HR process. 


Before we explore the impacts of blockchain adoption in HR information management, let’s take a look at how the development of the Human Resource Information System greatly transformed HR operations. 


How HRIS transformed HR management

Also known as Human Resource Management System (HRMS), HRIS serves as a centralized storage of employee information that HR managers and staff utilize to collect and process data, generate reports, and facilitate other HR workflows. As the software became increasingly sophisticated, other functions were added such as payroll management, learning and development, and performance management among others. Here are 5 innovative changes that HRIS contributed to the efficiency and convenience of HR processes:


Centralized employee database

HRIS stores and retains all sensitive personnel information such as age, gender, educational background, employment history, skills, certifications and other essential employee details and figures. Once a potential employee gets hired, the information expands to records work hours, attendance, and other workforce activities to track compliance and performance ratings.


Effective recruitment strategies

HRIS operations utilize all employee information available in the database to match employees to job roles. At the same time, it helps the management to build a talent pipeline where they extract qualified applicants and employees for specific open positions in the company.


Efficiency in payroll and scheduling

Managers can efficiently track employee time and attendance in the HRIS, which is the basis for computing the salary and wages. Payroll automates the process to issue employee paychecks. The system also conveniently manages tax compliance for locations with different tax rules. 


Accuracy in analytics and reporting

The HRIS’s standardized and automated system generates accurate reports on workforce analytics such as employee turnover, attendance, performance, etc. HR managers can use these reports to help them assess employee behavior, which can support their strategies to improve their workforce’s performance, compliance, and satisfaction.


Employee self-service

Employees also benefit in the HRIS where they can access their own information in the platform to track attendance, performance reviews and payslips. Company procedures and policies, onboarding tools and other resources for employees to learn more about the company are uploaded in the system. Furthermore, they can edit their own data as well as file their leaves and requests through the platform. 


Blockchain adoption in HR information management

Blockchain is a public digital ledger recording information that is permanent and incorruptible. Each encrypted data, unanimously validated by the users, is duplicated and distributed across the entire network on the blockchain. The system is built on trust and transparency, and HR management can benefit from its security, data integrity, privacy and transparency. Several companies in the field have already adopted blockchain to experiment on the application of this technology in HR operations. 


Here’s how blockchain can further enhance HR processes and functions:


Authenticity and reliability through immutable data

One of blockchain’s characteristics is immutability, meaning, the transactions can’t be changed or deleted. Human resource management handles large amounts of employee and financial information that requires not only a high level of security but as well as authenticity and reliability. All employee credentials such as resumes, transcripts, etc. will be stored and validated in the blockchain.


Smart contracts

Smart contracts will be significantly helpful to contingent workers in the gig economy. Firstly, a smart contract enforces employment agreements, which protects both the employer and worker. Any conditions between both parties are executed immediately since the recorded information cannot be altered. Secondly, it automates payments without any intermediaries, such as banks and wire transfers, that are associated with delays and processing fees. 

Crypto-based payroll systeM

Blockchain is popularly associated with cryptocurrency. While cryptocurrency remains to be a confusing transaction for many, it is currently prevalent in financial management. With blockchain adoption in the HR process, it’s only inevitable that crypto-based payments will follow especially with global payroll processing. Cross-border payments through digital currency transactions are efficient and transparent. 

Personal blockchains

Employees can take control of their personal and private blockchain that contains their professional identities. They can decide who can access and use their personal data. Employers can speed up the screening and onboarding process since all employee information is stored in the blockchain. Access to data can be removed once the employee leaves the company. 


The application of blockchain in business operations is nascent at the moment. The early adopters of this technology from various industries such as HR management, insurance, banking and financial services, supply chain management, and healthcare are still in their experimental stage through blockchain pilot programs. Statista predicts that global B2B cross-border transactions on blockchain will increase dramatically over the next few years and will reach 745 million by 2025. 


CXC is a global HR outsourcing organization with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks

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