Is Bringing Blockchain Technology to HR taking it too far?

Technological innovation offers obvious advantages for staying ahead of the competition when it comes to delivering a better experience within HR. The ever-increasing complexity of employees’ needs (especially during a global health crisis) means that HR organisations are working hard to keep up. According to HCA Magazine, “COVID-19 has accelerated five years’ worth of digital transformation, introducing changes in a span of just eight months.”

Can innovation go too far, however, and needlessly exceed the needs of actual users? Pandemic or no pandemic, technology always expands into the global workplace but for some the introduction of blockchain technology to HR to improve employee engagement is too much too soon.

The Digital Transformation

HR professionals have shown relative confidence in adopting automation and artificial intelligence over the last three years to better serve their people. The benefits have been tangible, from maximising knowledge management, unlocking the power of big data and the use of the cloud to reduce costs and increase efficiency. Leading the charge is South East Asia which continues to be one of the fastest regions to adapt and innovate.

“The sheer size of population and economic growth means that, over the next five years, Southeast Asia will become a powerhouse and have the collective manpower of more than 40 per cent of the world.” Daniel Callaghan, CEO, The Workplace Accelerator.

Research conducted in 2020 by the Institute of Human Resource Professionals (IHRP) and the Ministry of Manpower (MOM) in this region found that HR professionals will need to respond to three trends in the coming years to meet business leaders’ expectations:

1. Intelligent automation
2. The rising expectations of employees for consumer-grade applications
3. The shift towards predictive analytics and modelling to provide insights for talent decisions

For many organisations, this complex mix of trends means a complete overhaul of the very foundations of the technology in use. For some, the obvious solution lies in blockchain technology.

What Blockchain Means for the HR Community

“Organizations are pushing harder on how to measure productivity, how they know who will show up for work, and what trends they are seeing in their workforce. Organizations are also leaning more heavily on AI to offset workplace volatility and automate as much as possible. We are seeing good discussion around blockchain, with initial use cases getting deployed.” Colin Brennan, President, Global Solutions and Services.

Blockchain technology has enabled, for example, Etisalat in the UAE to give employees lifetime access to HR documents, and completely secure data storage. This has allowed them to completely automate reward and recognition certificates which eliminates the need for hard copies and lag between confirmation of rankings and dissemination of results.

“Implementing Blockchain technology in HR ensures employee data is under their control and is secure and accessible anytime, anywhere.” Dena Ali Al Mansoori, group chief human resources officer, Etisalat.

The permanence and hyper-security of data and information in the blockchain environment is very attractive, reducing the need for physical server space, and even headcount in some cases. Not everyone agrees that it’s needed, however. Vaclav Koranda, Vice-President of Human Resources, T-Systems Malaysia is one of them. Whilst Vaclav is a proponent of the digitalisation of digital solutions in HR, he is more sceptical about the use of blockchain technology.

“I can’t see the large adoption of technologies like AI and blockchain in HR. There have been some attempts to develop HR tools based on those technologies, but we are still in the initial stage.”

He goes on to add:

“It will be interesting to see which of the trends that have been accelerated by this pandemic, will actually stick in the future. I think we should be prepared for more digitalization and virtualization wherever it brings efficiency into our businesses. In that sense, HR must find new ways of looking at topics like performance management, motivation, and employee engagement. These topics will have to be redefined and adopted for a more digital future.”

Technology needs people as much as people need technology and this presents the real issue; at what point does HR become completely automated? For a profession consumed by the needs and nuance of managing people, how can a purely digital service ever be able to meet the needs of employees? Firms that advance, adopt and adapt to the inevitable the most quickly will be the winners, whilst retaining that ever-important human touch. Blockchain may just be an automation, and step away from real people, too far.


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