Blockchain and HR: a winning combo? -Forbes France

Web 3.0, more than a buzzword, represents the emergence of a new version of the internet decentralizing the power of information. This would no longer be held by a small number of entities, but would be decentralized and shared between all Internet users. This transformation of their ecosystem is possible in part thanks to blockchain technology.

The latter is known for its role in cryptocurrency or NFT* exchanges. However, it is above all a technology for storing and transmitting information. It is, in short, a digital, public and transparent register of a set of information exchanges via “blocks” of information that cannot be modified. This registry ensures transparency, speed, traceability, and enhanced security for the exchanges that use it.

Beyond its original use, the blockchain has a role to play in the transformation of the management of information and data in companies. In the context of human resources, it acts as a guarantee of security and a facilitator in the management of the employee’s life cycle, from arrival to departure.

Certification of skills and digital work ID

Recruitment processes can sometimes be tedious for all parties. The intrinsic qualities of this technology allow the creation of digital work IDs, or digital work passports, to certify all the information in a candidate’s CV, or at least part of it.

EM Lyon or the University of Lille each certify their diplomas via a blockchain: a QR code is thus slipped into the CV of their students and refers to an online certificate of authenticity.

The use of the blockchain can also make it possible to certify skills acquired by employees internally. LVMH recently experimented with the use of the “LVMH HR Data Ambassador Badge” NFTs to guarantee membership in the community of the group’s digital HR ambassadors.

On the employer side, the blockchain speeds up the background check process. HR no longer needs to rely on a third party to verify a candidate’s information. Supplemented with the use of Machine-Learning, this speeds up the pre-selection phase of applications for the rest of the recruitment process.

On the candidate side, the creation of digital work IDs removes an administrative burden for the background check by centralizing and authenticating all the information. He also has control over the information he wishes or does not want to share with the employer via the ID.

Cybersecurity and anti-fraud

Human resources, at the heart of the company, manage employees’ confidential information and are therefore subject to the risk of cyber-attack. Ensuring the security and integrity of this information against an attack or internal fraud is therefore essential.

EDF, Engie, La Poste and Caisse des dépôts now use the blockchain Archipelagos as an additional layer of their digital safes.

Digiposte anchors the digital fingerprint of pay slips, and not the documents themselves, in the Archipels blockchain. This imprint serves as proof of authenticity of the document via double identification and can be verified at any time.

International payments and cryptocurrencies

For multinationals, international payroll management can quickly turn out to be a laborious process involving numerous intermediaries. The blockchain accelerates and reduces the cost of international payments by limiting the number of intermediaries and by overcoming the problems of exchange rates and local regulations.

Services such as Bitwage now make it possible to facilitate international payments and to pay part of the salaries in cryptocurrencies.

Paying wages via alternative methods, such as cryptocurrencies or electronic wallets, is also a way for companies to attract the young talents most keen on new technologies. Cryptocurrencies represent a significant way for companies to be perceived as innovative and daring, and therefore to improve their employer brand.

The limits of blockchain today

If the disruptive potential of the blockchain in human resources is undeniable, this technology is still struggling to establish itself. Like AI, the lack of understanding of how it works acts as a barrier to its adoption, and requires instilling a more digital culture in the company. Moreover, the still poorly defined legal framework hinders companies from adopting this technology more widely.

The current limitations are striking in the case of smart contracts, or intelligent contracts. These contracts are based on lines of code stored in a blockchain and are therefore not modifiable. If these offer the promise of increased efficiency in HR administrative processes, their legal and functional limits make it complicated, if not impossible, to implement them to replace traditional employment contracts.

The answers to the issues around the blockchain tend to be defined over time. Being still an emerging technology, it needs to mature before it can be adopted. In the meantime, companies that have taken the step for their HR processes are now seeing positive returns on the productivity of the service, and leading the way for others.

Article written in collaboration with Marie-Victoire Gallier.

*Non-Fungible Token: non-fungible token in French. A non-fungible item is a single item that is not interchangeable. For example, money is fungible, we can exchange euros or cryptocurrencies, but a work of art is non-fungible because it is unique.

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Blockchain and HR: a winning combo? -Forbes France

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