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Regulations Will “Block” Chain in HR

Current data privacy laws will make implementation of this approach challenging.

By Elliot Clark

There has been considerable discussion about the blockchain phenomenon in supply chain management and the financial world, and how it could apply to HR. In addition, small start-ups that claim to be pioneering the development of blockchain-based web platforms for talent acquisition have sprung up, attracting significant venture investment.

How would blockchain work? The process promises a single series of transactional records that an individual can maintain that will include “verified” educational and professional credentials, digitally signed references, background screening reports, and employment history (performance reviews, salary raise, and bonus history). For deployment, employees would need to export their personal history from each employer and provide the information needed to verify their educational and certification credentials. This would systematically end the automated reference checking industry and reduce background screening to a monitoring service.

Is blockchain functionality part of the future development path of major HR technology platforms?

“Blockchain is very intriguing technology. It would certainly revolutionize some aspects of HR,” says Dr. Peter Wiedemann, the CEO of the talent acquisition divison of Saba-Lumesse. “The ultimate expression would require employees to be able to export details about employment from their company’s HRIS systems upon termination and post them to an accessible secure portal. However, there is a big difference between a financial transaction, a supply chain purchase, and a human employee. Current data privacy laws in the EU, such as GDPR, and confidentiality regulations on the employers in the U.S. and most developed countries make this legally impossible. The best you will see for the time being may be an employment history linked to references and certifications of education. Until the laws change, blockchain for HR will be limited.”

Tags: Data & Analytics, HR Technology, Risk & Compliance

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