How Blockchain Impacts Human Resource Management


The most well-known use of blockchain technology is preserving a secure and decentralized record of transactions in cryptocurrency systems like Bitcoin. Blockchain innovation fosters confidence without the necessity for a reliable third party by ensuring the fidelity and security of a data record. Visit the CEX earn crypto program if you’re interested in some cryptocurrencies that have their blockchain.

Numerous businesses from various industries and across the globe are testing and implementing blockchain, the decentralized distributed database.

Blockchain technology is no longer limited to cryptocurrencies; its applications can now be found in industries like logistics, fashion, healthcare, and even humanitarian causes, as demonstrated by the ID2020 digital identity initiative, which aims to offer a universal identity solution for refugees.

Blockchain has the potential to make recruiters redundant since it offers the ability to do away with numerous back-office and third-party components of recruiting. Let’s explore the examples below.


The HR department spends a lot of time and money on recruiting; as a result, businesses use outside agencies or recruiters to recoup their time. However, as those techniques frequently have a high cost, they may be somewhat ineffective.

A significant portion of the process has already been shortened because most of the candidate data typically gathered during the recruitment phase can already be accessed on the blockchain. Resumes will be a thing of the past, and persons involved directly will be able to readily verify and see grades, credentials, employment history, and experience.


Because the data stored on the blockchain is obtained from reliable sources like accredited institutions, 51% of early adopters have reported using it to validate digital identities.

Verifying people’s identities, backgrounds, and work histories and providing real-time data on compensation and claims would surely free up some much-needed time so that HR can concentrate on the more strategic objectives of the company.

Smart Contracts

According to reports, smart contracts are already being used by 45% of blockchain’s early users in corporate settings.


Thanks to a code that will specify what happens to the money after it is received and specific circumstances are established, smart contracts between a business and its workforce will make it feasible for employees to be paid automatically. There is no possibility of delays or fraud, therefore, the payment of salaries can proceed immediately.

As gig workers would profit from such a system of contracts and payments if they were included in an organization’s supply chain, smart contracts also assist the growth of the “gig economy.”

For firms and their HR teams used to following standard protocols, not needing to upload employees onto the payroll system, being able to describe the terms in advance, and turning on and off a contract will be quite enticing.

Team Member Life-Cycle

The use of blockchain technology will disrupt the entire team member life cycle because the present hiring and onboarding process for new employees can be time-consuming.

It takes time to interview, review qualifications, confirm employment history, collect references, and submit applications for required security checks.

This process continues until the individual eventually leaves the organization (for instance, if the role changes, further qualifications are achieved, or new management is assigned during a handover).

And that’s not even the end of it!

Then, you might be asked to send some of this information to prospective new employers so they can run background checks on that person, and the process will restart at that point.

Blockchain would drastically minimize the time and effort required for this procedure because it would already include all of this verified information, streamlining the entire HR experience.

Secure ‘Transactions’

In a blockchain environment, transactions might involve everything from exchanging financial information and cryptocurrencies to transmitting personal data, employment history, and records.

Cyber security capabilities are changing the future of these transactions because the data saved on the blockchain is encrypted and hence very difficult to tamper with.

Employers and employees should feel more at peace knowing blockchain enables secure transactions. Less risk equals fewer security or data breach claims for HR to investigate.


For ID2020, blockchain technology is utilized to store biometric information for legal ID and record-keeping, such as a fingerprint or iris scan. Organizations could track attendance and expenses for salaries and claim purposes by using this method of keeping particular employee data.

Since there would be no question about the records’ accuracy and human resources would have access to real-time data, the confidence factor in payment authorization and investigating claims would be strengthened. By doing this, the HR and payroll departments would have fewer mistakes and fewer conflicts.

Compliance & Auditing

It’s understandable why blockchain technology is used for compliance and auditing by 49% of businesses that have already adopted it.

Since the data in the blockchain is already correct and verified, doing audit checks for compliance would be simple and obvious to those with the right permissions.

It appears that blockchain technology would be a welcome addition to HR, freeing up time and resources that could be used to concentrate on core company goals and objectives and enhancing HR’s position as a strategic partner.