What the Technology May Mean for HR
How do you manage and pay your employees when they’re stationed all around the globe? With a decentralized workforce, you quickly find that extensive international regulatory red tape makes managing global employees difficult. How can can a company remain compliant in every jurisdiction while keeping employees paid and happy? The answer might be blockchain.
Back in the 1980s, transmitting secure messages via fax machine to anyone across the world was common in business. The 1990s brought instant messaging and video conferencing systems. Smartphones and the subsequent phone applications such as Skype and FaceTime became common practice in the late 2000s.
As technology has evolved, the opportunity to conduct business and manage a global workforce has also expanded. Technology platforms have advanced so that individuals located anywhere on the globe can communicate instantaneously. Fast forward to the most recent and most revolutionary technological advancements: blockchain…
Blockchain, an evolution of the internet, is quickly becoming well-known as the infrastructure of trust. It is radically changing the world as we know it. It’s a distributed, shared ledger and synchronized database of information that can be validated by every network user, eliminating the need for a middleman. Valuable data in all forms, such as contracts, transactions and even identity can be tracked and authenticated in this decentralized technology. It is expected that this disruptive technology will specifically transform transaction-based industries, such as financial services, supply chain, health care and real estate. For companies with a decentralized workforce, the need for efficiency, trust and validation becomes inherently necessary. Although not yet widely adopted into the mainstream, blockchain tools are expected to simplify administration, ensure accuracy and strengthen the management of company processes with immutable, unaltered records, encouraging transparency and trust.
Many professionals ask how blockchain will improve efficiency and trust in the workplace. HR and people operations are great examples of areas where blockchain can be exploited. Blockchain-based solutions are expected to enable the candidate and employment data ecosystem. Candidate job matching will be simplified, and resumes and credentials will be authenticated, expediting the recruitment and screening processes. Blockchain will particularly be instrumental in validating credentials such as employment history, job experience, and education. Transactional data such as medical records, workers’ compensation records, safety records, address changes and tax data, among others, can also be securely facilitated by the blockchain.
Smart contracts will streamline the hiring and onboarding process, ensuring execution of the agreement between the company and the worker. This will especially benefit companies that have high-volume hiring needs and jobs with high rates of turnover. Furthermore, blockchain and smart contracts will greatly impact payroll and benefits administration. Modernizing payroll and payments to standardize and expedite global payment processing via a blockchain application will greatly streamline payroll and accounting processes. Automated verification of wages and benefit coverage will also improve operational efficiencies and enable more timely communications between a decentralized workforce across different time zones.
While blockchain will revolutionize how we transact, certain laws may be slower to recognize this new evolution of how business will be conducted. It’s important to keep in mind that employers are still required to comply with regulatory and employment laws. The risk for noncompliance may not only be costly, but could also have more extensive ramifications. Despite blockchain and its expected positive impact on hiring and managing a decentralized workforce, there remain a number of compliance requirements to consider when managing distributed staff and offices, which include some, but not all, of the following:
- Is the company set up to do business in the jurisdiction?
- If hiring independent contractors, do the job duties meet independent contractor requirements for the jurisdiction?
- Is payroll tax set up accurately?
- Does the company have proper insurance, including workers’ compensation?
- Is the company in compliance with employment laws for the jurisdiction in which the employee works?
- Is the verbiage in the contract and/or employment agreement legally sound and enforceable?
- If recruiting and hiring in the European Union, are the tools utilized in compliance with the new GDPR, which went in to effect on May 25, 2018 regarding data protection and data processing?
Blockchain has the opportunity to transform many people processes beyond our imagination, from recruiting to employment to payroll. This technology will revolutionize how we transact business.