4 Ways Blockchain Can Revolutionize Human Resource Management

HR is often considered the heart of an organization. A well-managed and efficient HR team is uniquely positioned to completely change a business. From curating culture to processing payroll to administering benefits, HR touches every aspect of the employee experience.


Today, however, much of HR’s work is tedious and manual. But certain technologies—like blockchain—have been helping HR teams around the globe automate their day-to-day processes, freeing them up to focus on strategic initiatives. If you’re not familiar with blockchain, simply put, it is a record-keeping technology that securely stores information and transaction data. As the technology continues to evolve, it’s spreading to help more and more industries and job functions—like HR!


Blockchain-enabled HR has the scope to revolutionize processes including recruiting, onboarding, payroll, bonuses, attendance, and more. In this article, we are taking a peek at what the technologically driven HR sector could look like in the near future.


Streamlined Background Checks in the Hiring Process

Today’s hiring process is already often lengthy and cumbersome when you don’t have the right technology and processes in place. And one part of the hiring process in particular is known to slow HR teams down: background checks.


Blockchain technology can facilitate an encrypted ledger that stores an employee’s history of including educational credentials, past employment, past performance, etc. Moreover, each of the documents is validated by credential sources. The applicant can give access to this ledger to the manager or the interviewer.


This could make the recruitment process both faster and more secure, which is essential because of technological advancements that have made finding qualified candidates even harder.


Automated Payroll with Smart Contracts 

HR teams can often be seen as a place for employees to complain when something is wrong in the workplace. This is especially true when it comes to payroll. If payday checks are held up, payroll employees can expect an influx of complaints.


Smart contracts powered by blockchain could alleviate these issues.


Smart contracts can automate repetitive tasks once the conditions are specified (i.e. entering a coded contract specifying the paycheck amount, attending days, any bonuses, etc.). The smart contract calculates the salaries of employees and automatically disperses them into employees’ accounts each month.


For example, let’s say that a company defines a smart contract for 20 employees along with their bank account details and salaries in bitcoin. Each month, the contract automatically calculates the salaries, and according to the current value of bitcoin, disperses them into the employee’s cryptocurrency wallet.


Secure Sensitive HR Data

While the world has gone digital, many organizations still store their employee’s information, records, and work on paper or insecure drives. This can not only result in manual errors, but it also puts employee and company data at risk as it becomes more vulnerable to threats and hacking.


On a blockchain, data can be encrypted through cryptography and stored securely.


Automated Taxes

Taxes are never fun for HR, especially as laws and regulations change. Payroll taxes are further complicated by factors like commissions, overtime pay, bonuses, etc.


Blockchain can untangle this confusing mess by recording tax considerations for each employee. This helps streamline payments, ensure the company is tax compliant, and further ease the process.



Blockchain technology has the potential to drive value and further deliver enterprise solutions such as robust HR management. Moreover, the combined ecosystem of blockchain and smart contracts can facilitate automated actions, reduce operational costs, bring efficiency with lower resources, and help secure valuable data.


Topics: HR, HR Technology

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