How HR Can Apply in Web3? Since its nascence, the internet has gone through three iterations.
Web1 was the first stage, consisting of personal web pages on ISP servers or free web hosting services.
Then Web2 came along, introducing dynamic user-generated content, interoperability, increased access to information, and enhanced interaction through podcasts, blogs, social media, and RSS feeds.
Web3 is the latest stage in this evolution, bringing new changes into the ways it’s used and interacted with. Essentially, it is a decentralized online ecosystem and database that runs on blockchain. Unlike in the previous iterations, the information is no longer owned but rather shared.
The newest version of the internet is defined by increased connectivity, semantic web, use of 3D graphics and AI, and ubiquity.
Through blockchain, it enhances the online world as we know it, throwing in a few additional perks. Among other things, Web3 is:
• Verifiable – Anyone can check all the transactions and interactions.
• Trustless – Trust is distributed among different parties by consensus, minimizing the amount of trust required from any single actor in the system.
• Self-governing – Governed by everyone in the system and by no one in particular.
• Permissionless – Open to everyone to participate.
• Distributed and robust – An immutable database of all the network’s transactions that is shared, synchronized, and replicated across independent nodes.
• Stateful – The nodes keep track of and validate the state of a transaction or interaction.
It also features native built-in payments and makes use of powerful technologies built on and powered by public blockchains such as Ethereum.
Some Ways In Which How HR Can Apply In Web3 Easily:
Many industries and business areas have already recognized the potential of blockchain and Web3 in improving their operations.
However, one of the areas in which blockchain is yet to make a dent is human resources (HR).
Here, these new technologies could unlock value for everyone involved, including in areas such as:
In transactional HR, this would be the most obvious application area of blockchain technology.
These financial activities require transactional transparency, high transaction speed, and simplified business processes — all of which are lacking in the current manual payroll tasks. Blockchain can improve the payroll processes by adding automation, speed, transparency, and security.
On top of that, it could be the answer to the problems of cross-border payments for workers who reside outside the countries in which they work occasional jobs (gigs).
Blockchain payroll systems would overcome the obstacles of exchange rates and local banking regulations and allow these workers to get paid quickly.
Bonuses and Reimbursement of Expenses
Blockchain could also improve access to employee bonuses and rewards, which are traditionally assigned and issued using manual processes.
This can lead to errors and negative effects on the employees’ benefits packages. The technology could help by applying defined bonuses for key capabilities and rewards for certain tasks in a more data-driven and quantifiable way.
Many businesses also reward their employees with non-cash incentives like stock options. Typically, there’s a vesting period before the employee can exercise their shares. Unfortunately, they have to pay tax on the price difference between their option price and the sale price at the moment of the exercise.
To overcome this problem, businesses can offer digital assets as an incentive.
Background Checks And Job Qualifications
Digital identity on the blockchain could help HR departments greatly in background checks and verification of job qualifications.
Corroboration via phone calls and LinkedIn is only partially efficient and requires time and effort that could be better used elsewhere.
Blockchain provides trust in the accuracy and authenticity of the information, which would eliminate waste of resources.
This would also help job applicants who would no longer need to fill out countless forms or worry about other candidates getting an unfair advantage by lying on resumes.
Businesses or clients don’t need to store employees’ details such as location, gender, age, or race, but only what is relevant — their skills and experience.
Blockchain can ensure only these are shared with the businesses through the creation of a unique digital ID that the employee can provide to anyone they do business with.
On the other hand, the data-driven insights available this way would help to hire managers to filter the most suitable candidates with more ease.
Commissions And Fees
Other HR changes ushered by blockchain include how certain freelance and contract workers are paid.
Typically, intermediaries charge around 20% for their mediation. Platforms such as Ethlance charge zero fees and an employee is paid automatically once the task has been completed and approved.
A lot of salespeople are often paid under a commission model. Since transactions and ledger updates on the blockchain are nearly instantaneous throughout the ecosystem, it would allow sales reps to receive their payments and commissions quickly.
Skills Gaps in the Workforce
In an increasingly dynamic industrial environment, companies are facing the problem of outdated knowledge and skills of workers, affecting their efficiency.
This indicates that the training of the current workforce isn’t in line with the progress and expectations.
Blockchain can facilitate consensus between members of an industry association or training provider (for instance) on the top skills required by a specific industrial sector.
This would allow mutual alignment of updated information about the required skills to meet the needs of both industry and education.
As time goes by, it becomes more obvious that Web3 has all the potential to change from the ground up the practices traditionally found in HR.
These changes will eventually allow HR professionals to more easily manage and capitalize on their organizations’ human resources in an increasingly dynamic and competitive hiring ecosystem.
The best thing they can do right now is to get a head start and give the new technology a chance to shine. Observe the blockchain projects going on that try to address your existing HR challenges — and don’t be afraid to experiment with startups. This is how innovation starts!
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