Over the past few years, you’ve probably heard a lot about blockchain and how it’s a revolutionary technology that can be used in many different ways. Gartner thinks that blockchain could be worth as much as $3.1 trillion to businesses by 2030, which shows how much potential it has. But what do you know about blockchain in terms of payroll and human resources?
From this point of view, blockchain isn’t so much a new technology as it is a new way of thinking, especially about how it can change how payroll and HR data is stored and accessed and how it can be used with other technologies.
Many early adopters are already using ideas from blockchain development services in some areas of human resources (HR), and they are helping to start what is expected to be an exponential growth of blockchain in the sector. In this blog, we’ll look at how blockchain can be used to make global payroll and HR easier, more efficient, and more effective.
Blockchain is a new idea, and not much is known about it yet. So, blockchain looks like a hard-to-understand technology, which can also be the case. But the main idea behind blockchain is not hard to grasp.
The blockchain is a database that keeps track of all the details of a transaction. The algorithm for the database is set up so that it is hard or impossible to change, hack, or trick the system. Blockchain is a digital record of transactions that can be duplicated and shared on all the servers of the computer systems on the blockchain.
The size of the global blockchain-as-a-service (BaaS) market was USD 1.90 billion in 2019, and it is expected to reach USD 24.94 billion by 2027, growing at a CAGR of 39.5% during the forecast period.
Every block in the chain has a number of transactions in it, and every time a new transaction is made, a record of it is added to the ledger of every participant. Because of this, blockchain technology will help payroll software in a good way.
A lot of private, confidential, and sensitive information about employees and finances is handled by the human resources department. Software for managing payroll for employees processes and stores sensitive information about salary, health insurance, finances, banking, and other things. Hackers and other cybercriminals are just waiting to use this sensitive information in bad ways.
By adding blockchain to the software for managing payroll, cybercriminals will be less likely to attack. Also, blockchain is a decentralised system, so hackers have no way to change the data or even get to it. Also, the blockchain algorithm says that any changes to a block should be checked and approved before they are made.
At the moment, it takes a lot of time to find talent, figure out if they are a good fit for the organization, and check that they are who they say they are. Also, there is a higher chance of fraud and wrong information.
For example, the candidate could change his or her resume to fit the job description. They can even make fake references and documents to make it look even more real. The HR department might have to wait days or even months to hear back from the references or the company.
Also, think about what would happen if companies started to store employee records on blocks. The candidate can give the future boss access to the employee records blocks. The software for managing payroll for employees that uses blockchain will give employers access to information about previous jobs, letters of recommendation, educational documents, and a lot of other important information.
The best thing about cryptocurrency is that it is not centralised, and if the payroll processing software pays the employee in cryptocurrency, it will have many benefits. First, everyone will get paid the same amount, which will end the inequality around the world.
Also, many governments around the world do not accept or ban crypto. For these countries, it’s not possible to pay with cryptocurrency, so they have to use their own currency. The blockchain in the payroll software will make sure that the payroll process is open, accurate, and quick.
By adding smart contracts to the payroll and HR functions that are already in place, a lot of the manual work and room for error can be taken out. When certain conditions are met, these smart contracts, which are part of a blockchain, can be used to automatically and instantly pay someone for work they have done.
For example, these can be used to pay freelancers or contractors who have been hired for a certain number of hours or work. As soon as that is done, the smart contract takes over and makes the payment without anyone from the payroll team having to do anything.
This can save payroll teams a lot of time and money because they won’t have to process each payment by hand anymore. It lets workers in the “gig economy” get paid right away for their work, and it’s also a big part of “on-demand pay,” where workers can withdraw their earnings whenever they want through a self-service platform.