Blockchain and HR
25 July 2017
During the very early days of the internet, management theorists expended a lot of energy trying to predict what effect it would have on the way companies did business. The consensus was that the technology would reduce companies’ internal and external transaction costs, resulting in a reduction in headcount.
As it turned out the consensus was wrong; the internet hasn’t had a significant impact on transaction costs and if anything, it’s created more jobs.
Today, we’re about to feel the effects of an innovation that will revolutionise the future of many businesses, particularly those in financial services. Blockchain is extraordinary technology that could change the way we all, including HR professionals, work.
But while it’s clear that blockchain is an exciting innovation, the details of what it can do for us are still to be discovered. What will it mean for the way businesses are run? And for the people that are employed by them? I’m going to stick my neck out and make a few predictions.
Blockchain’s potential is exciting because it has implications for organisations as a whole, but also for us all in our day-to-day work. Take HR professionals, for example. Blockchain’s ability to validate information could transform the way employee data is managed; information about qualifications, experience, medical and personal records and tax data can be created, securely stored and trusted by everyone in the chain.
But we can also see bigger implications. Banks are going to feel the greatest benefits of blockchain because of its potential to remove the need for the transactional and processing elements of banking; some believe that the need for intermediaries, such as clearing houses, could disappear altogether as the number of automated transactions increases. Blockchain also reduces the scope for cybercrime and fraud, and therefore for the processes in place to monitor them.
In terms of people, this will transform the skills required of the workforce. If transactional and processing elements of banking might disappear, so might the need for the many thousands of people that run them. Conversely, it’s also likely that banks will need many more people in compliance, either temporarily or permanently. The skills that FS firms will need will change – it’s a given that firms will need more people that are skilled in blockchain technology, and fewer who know how to run systems.
This raises a range of HR questions: How many people will I need as the operational model changes? Where will they need to be? What skills will they need to have? Do I need to develop these skills internally, or hire them? What processes and skills can and should be outsourced or transferred to a managed service?
It also has a fundamental effect on culture and behaviour. At the extreme, blockchain will impact the nature of an organisation. A bank will change from something that’s dominated by processing to something that’s dominated by technology. What will the journey look like? We can be sure it won’t be linear. Organisations will need to adapt to the changing landscape to feel the full benefits of blockchain – and HR professionals will play an important role.
The winners in the blockchain world will be those that see the many opportunities it presents and prepare the organisation for change.