The Blockchain Is Finding Its Way Into The World Of Work

Blockchain technology is currently conquering the IT world with these three properties: confidentiality, protection against forgery, and transparency. The newest providers of blockchain solutions include manufacturers of human resource management software. 

They use cryptocurrencies such as Bitcoin or Ethereum, the new digital central bank currencies will be based on them, the origin of precious metals and diamonds will become traceable, and digital patient files will probably not do without them at some point: Blockchain technology has the potential to transform our everyday lives into the to shape the following decades and to influence the direction of technological advancement decisively.

What Exactly Is The Blockchain?

In simple terms, the blockchain is nothing more than a database that does not have a central storage location but is stored in an encrypted form on all the computers of its respective users. In addition, the blockchain usually contains not only the current status of a value (in the case of a cryptocurrency, this would be the amount that is in a user’s digital wallet) but also the history of every transaction that led to this value (in the case of the Cryptocurrency to this credit). This makes the blockchain extremely resilient and forgery-proof because hardly any external instance can simultaneously change a database entry on all computers.

The respective user only has insight into the values ​​and transactions in which he was involved. At least, this is the case with community currencies like Bitcoin. This property and the fact that no intermediary instance such as a bank has to be connected to carry out a transaction explain to a large extent the attractiveness of Bitcoin & Co. This confidentiality level also applies to the official digital central bank currencies (Central Bank Digital Currency, CBDC), which will be introduced soon. The interest in combating economic and other criminality is likely to be too much in the foreground for the European Central Bank, for example, to forgo a kind of “master key” to view all transactions.

Solution Seeks Problem

Of course, blockchain technology is still at a stage where it still takes some effort and even more technical expertise to build a blockchain ecosystem. For some years now, large cloud providers such as Microsoft or Amazon Web Services have offered complete blockchain development environments to lower the entry threshold for blockchain applications. It just takes a sufficiently justified need and the proper application for the ball to roll. “The blockchain is placed where there is a problem to be solved between two entities, between which there is no relationship of trust,” explains Björn Obermeier, Principal Director Multiparty Systems at Accenture.

Constellations in which it is worth the effort currently only exist where a lot is at stake: The Responsible Sourcing Blockchain Network, for example, uses blockchain technology from IBM to monitor the production and trading of cobalt used in the production of batteries. The IBM Food Trust, through which the origin of food can be traced, is based on the same technology. The transfer service Ripple uses the blockchain to process more significant transactions between financial institutions. 

How Trustworthy Is A Resume?

However, in recent years, blockchain technology has also been brought into play more and more in the personnel area, above all from software providers for personnel management such as Workday or SumTotal Systems. This is usually justified with the management of personal information, which, of course, enjoys a high level of confidentiality and traceability. According to various studies, discrepancies between the stated and actual data on the qualifications of applicants are found in up to 85 percent of CVs and applications. This ranges from information about specific specialist knowledge to “doctors” who have practiced without appropriate training.

“In today’s working world, in which not only the requirements for qualifications and certifications but also the employees change faster and faster, the blockchain can be seen as a useful addition to today’s solutions,” says Jon Drakes, Director Solution Architects at SumTotal Systems. His employer has identified nine areas where blockchain technology could revolutionize personnel and security requirements.

1. Recruitment Process And CV Check: Critical data such as training degrees and certifications would be recorded in the blockchain. This would make it easier to check the information on the CV.
2. Onboarding And Career Path In The Company: During the entire period of employment, it is recorded in the blockchain how the position and role of the employee change and which further qualifications are acquired before the employee leaves the company. Whether and to what extent the subsequent employer would have access to this data without violating the employee’s privacy must still be legally regulated.
3. Smart Contracts: According to the US IT industry association CompTIA, 45 percent of early adopters used blockchain as early as 2017 to implement smart contracts in their companies, for example, to check the performance of service providers. Smart contracts are also being considered for regular wage processing for employees.
4. Identity Management: The blockchain can accommodate the personal identification data of the users, which the user controls autonomously and whose legitimacy he can prove on a turnkey basis. This would make complex administration by third parties superfluous.
5. Rights And Access Management: A central source of proof of identity and the correspondingly assigned authorizations would also make access data management considerably easier and ensure better company security and transparency across departmental units and industries.
6. Secure Transactions: Search transactions via the blockchain can ensure confidentiality when exchanging personal information, work experience, and records and at the same time document the exchange.
7. Qualification Management: Proof of qualifications, certifications, or equivalences across geographical boundaries could be simplified with the blockchain, as could their validation.
8. Compliance & Auditing: Secure identity and qualification management also form the basis for simplifying compliance and audit requirements. According to Subtotal, there are already first security zones in production or maintenance technicians at airports. Employees are not allowed access if they cannot provide proof of the required licenses – “License to Operate” – as part of their identification. Otherwise, the risk that the employer will be legally prosecuted for mistakes would be too significant.
9. Access: The storage of biometric data such as fingerprints or iris scans can safely regulate access to susceptible company areas or participation in specific company processes.

Also Read: Blockchain – Definition, Advantages, And Disadvantages