Innovation

The Future of Blockchain: Empowerment Through Personal Data

18 April, 2019
  • Vineet Malhotra

    Partner, Digital Ventures and Capabilities Leader, Mercer

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"Growth economies must find ways to integrate intermediaries who will fight the prospect of obsolescence as blockchain technologies become more popular."

Musicians, poets and philosophers have spent entire lifetimes asking the question, "Who am I?" In the not-so-distant future, the answer to that question may be stored in our personal blockchain profiles — digital "arks" that contain the details of every decision, action and purchase we've made since the day we were born. Say goodbye to your birth certificate, credit score, passport, professional resume and medical history, and say hello to the future of blockchain: your blockchain profile. Your unique answer to the question "Who are you?" will be a chronological, hyper-detailed, immutable record that says with unprecedented certainty, "This is who I am."

Blockchain will not live inside our thoughts, emotions, dreams or nightmares. It will not capture the inner dialogues people reveal in personal diaries or while talking to the bathroom mirror in the morning. Blockchain will, however, never forget when you broke your arm at the age of five (climbing a bannister), how your heart rate spiked when you first met your spouse (you dropped your drink) or that you paid extra for rush delivery of a new pair of black shoes (your cousin's wedding).

Blockchain may not be the "you" robed Greek philosophers had in mind, but it will be the "you" the rest of the world sees — ideally, with your permission.

Know Your Rights in a Digital World
 

Businesses want access to your decisions. Information detailing why you choose to vacation in Vietnam, eat mussels at your favorite Italian spot every Tuesday night or only use a medium-bristle toothbrush is valuable to companies that want to sell you — and people like you — airline tickets, fresh seafood and toothpaste. Every online decision you make and action you take is data that reveals part of your personality and thought processes.

In recent years, businesses and policymakers have debated how much access companies should have to an individual's personal decisions — especially what they read, click on and buy online. While there are powerful forces seeking to retain control over the data individuals create when using online services, the winds are shifting, and regulatory momentum is beginning to favor the individual.

In May 2018, the E.U. set forth the landmark General Data Privacy Regulation (GDPR) that firmly establishes basic legal rights regarding data privacy, ownership, control, consent and portability for all of its citizens, regardless of where they live.1 In the U.S., the HIPPA Privacy Rule establishes national standards to protect individuals' medical records and other personal health information.2

These regulations are in place to protect citizens from organizations who may seek to use personal data for purposes other than what it was collected for, or for which consent has been explicitly given — and provide instruments to exact considerable penalties on entities that violate those laws. In an era of digital transformation, it is critical that people appreciate the value of their personal data and the extent of their rights to privacy.

For Sale: Sleeping Habits and Exercise Routines
 

Personal data is now part of the supply-and-demand dynamics driving capitalistic enterprises. Consumers not only possess purchasing power but also access to the thoughts and activities that precede particular purchases. This information is invaluable to companies that use data-driven strategies to sell their products and services to targeted consumers.

Before blockchain technology, it wasn't possible to have a comprehensive record that kept track of an individual's purchases and behaviors within the context of everything else happening in their lives. But now, it is possible. Today, blockchain makes it possible for people to have an immutable profile of unimaginable detail, one that begins on the day they're born and develops throughout their entire lives — recording everything from when they lost their first tooth to the names of their grandchildren. Every doctor visit, every homework question, every mouse click, every page view.

Businesses, naturally, will develop innumerable ways to incentivize people to allow access to their data. With individual rights established as the legal default, consumers will hold the power in this relationship and can monetize their data by renting access to various aspects of their blockchain profiles — from their sleeping habits to exercise routines. As deeper access is granted and more data sources are connected, behaviors can be predicted with greater accuracy, increasing the value of an individual's profile.

In effect, individuals will be able to self-identify as willing marketing targets who offer their comprehensive descriptive profiles for sale in an emerging digital marketplace for personal data — a development that will radically alter the business of advertising, data research and analytics.

A World of 8.5 Billion "Personhoods"
 

In 2030, the global population is expected to reach 8.5 billion. By that time, blockchains could consistently, reliably and securely organize data around the individuals who comprise the world's communities and nations. This makes person-centric societies technically possible, where citizens' actions and behaviors are digitally recorded in their "personhood" — an immutable record that serves as a single source of truth to their experiences and sensibilities.

People, in essence, will regularly create real-time data that is chronologically added to their collective profile — which includes health records, educational backgrounds, professional credentials, voter registrations, driver's licenses, criminal histories, financial status and any other notable aspect of being a person. "Personhood" could become the universally accepted record to which all identity-related information can be tied. All the processes once needed to validate identity will be replaced by an individual's comprehensive blockchain profile. The commoditization of personal data will profoundly impact how people relate to businesses and each other.

Will being held accountable to one's own "personhood" — and knowing that the details of our lives will forever be recorded in our blockchain profile — change how we behave? Will attempting to increase the value of one's "personhood" become an extension of trying to improve their own lives? Or vice versa? The rise of "personhood" could change our collective understanding of ownership in ways the human race hasn't witnessed since the concept of personal property rights first emerged.

The Future Challenges to a Blockchain World
 

There are always casualties to sweeping technological advancements. With the proliferation of blockchain technology and the rising value of individuals' data, societies risk becoming even more polarized along financial and class lines. Individuals with more purchasing power inherently possess data that is more valuable to businesses that sell products and services or governmental institutions that could benefit from their financial support or influence. Those without money or access to modern technologies will face profound disadvantages unless governments — especially those in growth economies — implement regulations that protect vulnerable citizens from being left behind. Growth economies must also find ways to integrate intermediaries who will fight the prospect of obsolescence as blockchain technologies become more popular.

Though the future is difficult to predict, and change always creates challenges, history teaches us that where value is created, technology eventually wins. The future of blockchain presents the human race with the opportunity to understand each other, and ourselves, in unprecedented ways. By providing new insights into human behaviors, relationships and business interactions, we can learn from each other and improve conditions for everyone.

Perhaps blockchain data will even convincingly demonstrate to humanity how similar we all are. In the future, the most important questions people can ask themselves is not, "Who am I as a person?" but, "Who are we as a society?" The answer to that question may create the type of civilization only dreamed of by musicians, poets and philosophers.

Interested in learning more about blockchain? Check out: Mercer Digital's Blockchain 101 Overview.

1Palmer, Danny. "What Is GDPR? Everything You Need to Know About the New General Data Protection Regulations." ZDNet, https://www.zdnet.com/article/gdpr-an-executive-guide-to-what-you-need-to-know/.
2
"The HIPAA Privacy Rule." Office for Civil Rights, https://www.hhs.gov/hipaa/for-professionals/privacy/index.html.

 

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Editorial Staff | 17 Aug 2019

There is a huge opportunity for blockchain to establish itself in the healthcare sector. Learn more about specific use cases that can help innovate how HR departments deliver healthcare & wellness benefits. Blockchain technology is one of the most disruptive technologies on the market today, with multiple industries adopting it to optimize processes and innovate the way companies function. It has proven to be a game changer in the business arena and the global blockchain technology market is estimated to amass US$20 billion in revenue by 2024. Meanwhile, SAP reports that 71% of business leaders who are actively using blockchain believe it plays a key role in advancing technology and reestablishing industry standards.  While blockchain has already been widely integrated in processes for supply chains, banking and cryptocurrency (e.g. Bitcoin), the healthcare industry has also been identified as one of the top industries likely to be disrupted. Blockchain technology could offer solutions to some of  healthcare’s greatest challenges, from securely managing patients’ medical data to tracking large databases of drugs through the supply chain or extracting healthcare data from clinical trials. As the technology advances and becomes more readily available, more healthcare organizations across the industry will be adopting blockchain solutions to redesign the global healthcare ecosystem.  HR serves a critical function for the healthcare industry and is an intermediate between employees and one of the most valued aspects of life: their health. According to Bitfortune, 55% of healthcare applications will adopt blockchain platforms for commercial deployment by 2025. Meanwhile, adoption seems to be ramping up with multiple governments around the world announcing plans to invest in blockchain and encourage its implementation. For example, Singapore’s government has announced financial incentives to enterprises for adopting the technology. Amid an evolving industry, it is imperative HR professionals stay current with how blockchain’s ledger technology is disrupting the healthcare industry. They should especially keep a pulse on the implications blockchain holds for delivering the employee experience with improved healthcare and other benefits. Use cases: how blockchain can help HR transform in delivering healthcare & benefits   While the use of blockchain technology is still more commonly associated with payment functions, its disruption to HR will be profound and pervasive in coming years with many possible use cases across the functions of an HR department. To prepare for the coming blockchain revolution, HR departments should focus on identifying problem areas and inefficient processes that could be addressed by the transparency, accuracy and speed that blockchain provides. The processes most primed for blockchain disruption are those that are burdensome and expensive with substantial data collection and third-party verification. For this reason, healthcare and benefits could be the ideal match for an HR department looking to adopt blockchain technology. 1.  Enhancing fraud prevention & cybersecurity for sensitive data in HR. HR teams conduct some of the highest-volume financial transactions for an organization and handle sensitive employee data related to healthcare (as well as, banking, disciplinary records, performance records, expense reimbursement, and more). Unfortunately, all of the data an HR department maintains is at risk of being exploited and, as more companies face data breaches, it is becoming increasingly important that proper measures are in place to maintain security and prevent fraud. A company’s cyber risks largely emerge from an underlying lack of transparency and accuracy in its data systems. Because of its capacity for promoting transparency and accuracy, blockchain technology is being lauded as a solution for combating cybersecurity crime and protecting data. While blockchain’s popularity grows among large companies and companies that hold critical, sensitive data (for example, Lockheed Martin is trusting it to secure data), it is also being used by nonprofits to collect donations securely. It is important to consider that blockchain technology can mitigate both internal fraud and external hacks of sensitive employee records. Access to the blockchain is limited and controlled—even those who have access are not able to modify the records. This limits both internal fraud and external hacks of sensitive employee records. In the digital age, data is a major asset for a company. Blockchain essentially functions to decentralize data and places it across a large network of computer storage spaces to reduce the risk that a single hacking event could usurp all the data a company has. By using blockchain, HR departments can introduce a solid measure of security against cyber threats to protect their employees’ health information. 2.  Improving health insurance, health records & patient experience with ‘smart contracts.’ Much of blockchain’s power comes in the application of ‘smart contracts’, which many organizations are using to make payments to employees, contractors and vendors. In fact, it is reported that 45% of early adopters of blockchain are already implementing smart contracts within their organizations. A smart contract codes a set of parameters using statements in ‘if this, then that” (IFTTT) language. These contracts are designed so that, once executed, the entire process is dictated by these codes. It is also made irreversible unless of course terms of a contract need to be updated. While smart contracts have many applications for HR functions in terms of payroll, there are some very important considerations HR departments should be aware of in terms of healthcare. Smart contracts have the potential to be used for insurance, including how patients buy insurance. Through a smart contract, all details of an insuree’s policy could be stored in a patient profile. This profile would then be stored on the blockchain platform in a safe and secure ledger that is less prone to hacks than the databases currently used.  Smart contracts could also impact the insurance claim process by eliminating the need for lengthy forms and time lags. If an insuree undergoes a medical procedure covered by the policy, a smart contract would be automatically triggered to transfer money from the insurance company’s account straight to the hospital or medical provider. The automation cuts out delays and hassles, allowing for correct payment of the medical service. There are also numerous implications for electronic medical records, information and medical data sharing. Storing patient’s electronic health records (EHR) on secured ledgers, for example, would allow a patient to move easily from one hospital to another without having to fill out numerous forms. The blockchain network would safely store their records, allowing their new physician to access them without delay. While hospitals and healthcare providers currently rely on a number of databases filled with patient data, these can be too centralized and restrictive for sharing potentially life-saving insights around the globe. If health records were to be kept in a smart contract stored on the blockchain, the data analytics would be available to hospitals, providers and research institutions everywhere. With widespread adoption of this healthcare blockchain technology, an individual could essentially walk into any hospital in the world for treatment and, with their private key, their health data would be accessible instantly. 3.  Offering better access to healthcare & other benefits. Blockchain’s ‘smart contracts’ could also change how employees gain access to healthcare and benefits. Once the employer outlines the terms of employment prior to hiring, HR is charged with upholding the conditions in the contract. These terms include provisions that employees value in their employee experience, such as healthcare insurance, wellness programs or other benefits. The current model of manually delivering benefits runs risks of errors and could get in the way of properly servicing employees. With blockchain, HR could seamlessly deliver upon these benefits by implementing smart contracts that automate the process. For example, if a company outlines that an employee’s benefits packages begins after a specific waiting period, the smart contract would be written to automate these benefits at the right time and in the right fashion. Not only does blockchain have the potential to improve security and automation of benefits, it is possible for benefits to be more personalized to each individual employee. In today’s digital world, consumers are accustomed to enjoying personalized experiences and this trend of hyper-personalization is reaching the workplace. Through blockchain’s smart contracts, which could be integrated with artificial intelligence (AI) and IoT technology, companies would be able to empower employees with benefits packages and wellness programs that are tailored specifically for them and their evolving needs. These personalized packages could become a critical tool for enhancing the employee experience. Challenges HR faces in implementing blockchain to deliver benefits   Blockchain is a quickly evolving technology with new applications and trends regularly emerging. Though it is becoming more widely adopted across a variety of industries, it is inevitable that first-time users will run into issues and challenges in implementing it. For HR departments, it is imperative to consider these challenges as they explore which processes might be impacted by blockchain. 1.  Data standardization & integration with legacy systems. With blockchain being a new technology, protocols and standards for its application are not yet established. When the internet began to commercialize, it initially struggled without proper protocols. But over time, controls were implemented to allow for browser compatibility, cross-platform multimedia and better interconnectivity between servers. As more sectors adopt blockchain—especially healthcare which handles sensitive and personal data—ensuring that blockchains offer an industry-wide benefit will require widespread collaboration and standardization. For example, it will have to be determined when private, as opposed to public, if blockchains make sense. Otherwise, this could impact the security and functionality of blockchain technology. All industries will have to get over a major hurdle when it comes to integrating blockchain solutions with legacy systems—or replacing legacy systems altogether. But the hurdle is especially high for HR and healthcare, which are often bound to specific legal regulations and already have very specific HR or healthcare systems in place that incorporate these parameters. Synching these systems or replacing them with blockchain technology could prove to be difficult. 2.  Adoption & incentives for participation. Despite enthusiasm and a strong record of success, blockchain adoption has proven to be difficult for companies. Greenwich Associates surveyed companies that have implemented blockchain and 57% reported its integration has been harder than expected. In terms of scalability, 42% of respondents reported it as a major issue, 39% said it is a minor issue and 19% said it is no issue at all. Much of the challenges are culture or people-related, rather than technical. For example, most people resist change and, if they do tolerate it, they generally prefer it to happen gradually and incrementally. The oppositions to change could be even more pronounced for those in HR, especially with employees across an organization resisting how healthcare and employee benefits—which are very personal—is administered. Some of the proposed uses for blockchain would result in systemic changes that rapidly transform the entire system. Even if employees and management are open to change, HR still has work cut out in hiring, education and training. Blockchain will require companies to hire more research and analytical staff as well as offer training on how to properly implement it. But this is where HR thrives. By helping to cultivate a culture of digital transformation, HR departments can also guide companies on their blockchain journey. 3.  High costs of developing & operating blockchain technology. The adoption of blockchain technology is likely to offer long-term benefits in regard to productivity, efficiency, timeliness, and reduced costs. However, one of the greatest obstacles to widespread adoption of blockchain is the high cost to initially install it. The software required to implement blockchain within an organization must typically be developed specifically for each individual company. This makes it expensive to obtain, whether hiring in-house or buying from a developer. Moreover, even after the blockchain software is developed, the company would also have to purchase specialized hardware to be used with it.  In addition to the software development costs, companies must also find qualified personnel to operate the technology.  The blockchain space is new and growing so rapidly that the demand for professionals in the field outweighs the supply. This makes hiring qualified blockchain experts—either in-house or as consultants—quite costly. Currently, it appears that the world’s largest corporations are the only ones benefiting from blockchain because they have the money, resources and data to spare. Furthermore, the technology itself seems too new and not yet fully understood for SMEs to adopt in droves. However, this is all likely to change over time. The commercialization of the internet was gradual and in the early days it required companies who wanted to go online to put up a substantial amount of money upfront and invest in customized solutions. Eventually, as blockchain becomes more mainstream, it will also become much less expensive, more streamlined and more accessible to companies. Blockchain is already demonstrating its potential to disrupt business as we know it. Because the HR department guards and manages large amounts of sensitive data that are critical to employees’ lives and how a company operates, it is likely that blockchain technology will be infused directly into the HR function to add transparency and trust to various processes. Healthcare and benefits administration is one of the processes that blockchain technology is likely to directly transform. Though there are challenges in cost, scalability and perception to overcome, HR departments could potentially use blockchain technology to provide employees with greater access to more personalized benefits packages. Furthermore, as time is freed up by automated processing, HR departments will be able to turn their efforts to more value-adding activities such as building employee engagement and experience.

Editorial Staff | 09 Aug 2019

Digital transformation is here and it is disrupting HR functions in various ways. Learn about the latest digital transformation trends emerging in 2019. The digital transformation is well under way with over a third (34%) of businesses already implementing digitalization programs, representing a 30% increase over last year. Meanwhile, two-thirds of global CEOs report they will embrace a digital-first focus by the end of 2019. In recent years, digitalization has profoundly enhanced the customer experience to drive more value for brands. But digital transformation is transcending the customer experience to impact the employer experience as well. Employees, who have become accustomed to the digital experience in their personal lives, are increasingly expecting to have a digital relationship with their employers as well. This shift has implications across the human resources function, including recruitment, onboarding, training, L&D, and more.  The following digital transformation trends and new technologies are disrupting the business model for companies of all sizes, across various industries. But these innovations also represent unprecedented opportunities for HR leaders to improve the employee experience and better adapt for the future of work.  1.  Blockchain adoption is increasing. While just 0.5% of the global population is currently using blockchain technology, its popularity is rising and it is projected that 80% of the population will be engaged with blockchain technology in some capacity within 10 years.  Blockchain technology is perhaps best known for its role in safeguarding the cryptocurrency infrastructure (e.g. Bitcoin)—but ledger technology is leaving the cryptocurrency nest to explore more business opportunities. As the technology matures, companies across various industries are reporting compelling use cases for blockchain. For example, banks can now reduce infrastructure cost by 30% through blockchain solutions. This is achieved by encrypting millions of storage points, none of which contain a full name or an account number. Because the HR department is the guardian of so much data that is critical to employees’ lives and how a company operates, the human resources space is welcoming blockchain for cybersecurity reasons. Ledger technology will likely be integrated directly into the HR function through a multitude of use cases—lending transparency and trust to an organization’s operations.   Despite current challenges in cost and scalability, the case for blockchain HR is strong. To prepare for the coming blockchain revolution, HR departments should focus on identifying pain points and inefficient processes that could be improved by the transparency, accuracy and speed that blockchain facilitates  The processes most suitable for blockchain disruption are those that are burdensome and expensive with substantial data collection and third-party verification. For this reason, healthcare and benefits could be the ideal starting point for an HR department looking to adopt blockchain technology. The healthcare industry has been identified as one of the top industries likely to be disrupted by blockchain and, according to Bitfortune, 55% of healthcare applications will adopt blockchain platforms for commercial deployment by 2025. HR departments will therefore need to keep a strong pulse on how blockchain is impacting the healthcare landscape so they can continue delivering healthcare plans and wellness programs to employees. As blockchain technology becomes more mainstream and accessible, it is possible that many processes of daily workflow will transform: recruitment, tapping talent pools, running background checks, verifying employment history, engaging contract workers with smart contracts, onboarding, maintaining employee data, maintaining employees’ personal data, handling financial transactions and managing payroll systems.  2.  Businesses are investing in cloud platforms. Cloud computing and its various functions have been a hot topic for the human resources industry. It is not a relatively new technology but still the forecast is calling for more clouds. By 2020, a staggering 83% of global enterprise workloads will be stored on the cloud.  For the HR space, cloud’s success is owed to its acclaimed ability to organize data, centralize processes, scout high-quality talent and boost performance. But most importantly, cloud computing lends transparency to an organization’s processes and can subsequently enhance the employee experience, from the recruitment process all the way through to L&D and exit interviewing.  The traditional recruitment process can be rather tedious, requiring the company to advertise the position, shortlist candidates and conduct interviews. Cloud computing streamlines at least some of the process, offering everyone in the department immediate access to the data about a candidate. Feedback can be shared and decisions can be made using cloud software, all with the click of a button.  The implementation of a multicloud ecosystem can also automate several HR processes for employees that include large amounts of data such as timesheet submission, performance reviews and vacation requests. Employees can take ownership of their employee data forms through the cloud, including tax information and emergency contacts. Many companies are also using public clouds to automate employee signatures on various documents, such as employee handbooks, sexual harassment training, L&D, webinars, etc. Performance reviews are also being managed on the cloud, offering employees better access and insight.  Automatic software updates are another benefit of the cloud and these can simplify compliance. The HR department is often required to generate several comprehensive reports at specific intervals of time. Paperwork, time and hassle can be reduced by having the cloud software’s process automation generate these reports instead.  Cloud computing technology is inherently developed with security woven into its DNA. By replacing physical filing cabinets, data can be protected from theft or natural disasters. For example, if a company’s office were to become inaccessible due to flooding, employees would still have remote access to the programs they work with on a daily basis. Furthermore, data would be protected.  3.  Conversational User Interface (UI) & chatbot experiences are improving. According to Gartner, by 2021 more than 50% of enterprises will spend more per annum on bots and chatbot creation than traditional mobile app development. And, as other conversational UIs improve on voice recognition and reasoning frameworks, their understanding of the user’s needs and wants will also grow.   HR departments are engaging chatbots and other conversational UIs to streamline processes and eliminate redundancies. These technologies can provide employees with immediate and consistent answers to commonly asked questions related to holiday leave, compensation, benefits, company policies and legal rights. Even some aspects of recruitment, employee reviews, onboarding, benefits and L&D can be assisted by chatbots and other conversational UI.   Nudge-based technology is being implemented in tandem with conversational UI to suggest behaviors for employees and subsequently improve workflow. For example, a software program can monitor employee activity at a computer workstation and, after a certain amount of time, send a message to the employee that it might be time to take a break. Nudge-based technologies can also be used in lieu of repetitive communication from the HR department. Automatic reminders can even be sent to managers to fill out performance evaluations, with conversational UI then stepping in to assist with that process.  As self-service platforms, the conversational UIs free up time for both employees and employers while still delivering the right information at the right time. This HR technology also allows the team to focus on more urgent questions and complex issues that require special attention. 4.  Data & people analytics continue to be important. Information as a critical business asset is still in the infancy phase, making it a competitive differentiator for companies as they transition to the digital age. For leading companies, big data and analytics are becoming strategic priorities and key drivers for digital transformation initiatives. While fewer than 50% of documented corporate strategies currently cite data and analytics as fundamental elements for enterprise growth, Gartner predicts that this number will jump to 90% in 2022.  The importance of a  . data-driven culture is being especially emphasized in the world of work. For years, people analytics was mired in complexity. But today it is being leveraged as a critical people management instrument that can be applied at every level of the HR function, ranging from the recruiting process all the way to talent development and exit interviewing.  For recruitment, people analytics can increase the chances of finding the right people for the right jobs. It can also be useful for building employee engagement and satisfaction, as it cultivates data about employees’ attitudes and moods. People analytics can also facilitate collaboration within an organization, providing insights about how well certain people and groups work together.  When it comes to performance management, people analytics helps eliminate the human bias that often comes with manual evaluations. It also allows for an evaluation of both the process and outcome, which can help HR teams distinguish variables (such as luck or coincidence) from real, applicable skills that an employee has.  It’s important to note that people analytics is more than just data—it can be translated to guiding insight. With new analytics capabilities, HR teams are unearthing deep insights into the company’s organizational health. In turn, this insight can be used as a basis for proactive programming and support. Overall, people analytics helps cultivate a digital culture where decisions are informed by data.  5.  Internet of Things (IoT) adoption is accelerating. As digital transformation progresses, we are connecting more devices to the internet at home, at work and on our person. Thus, the market for the Internet of Things (IoT) is flourishing.  For HR, the starting line for IoT integration is usually with mobile smartphones and tablets—central hubs in IoT. In our personal lives, these devices offer centralized, easy access to our personal data and allow us to carry about a lot of our business. For example, we can share our thoughts on social media, communicate with friends via SMS and even buy products on our mobile devices.  Employees are increasingly expecting to migrate their work onto mobile devices, demanding access to data, analytics and communication. This helps employees and employers alike by enabling continuous performance management and a flexible workplace where employees can be productive no matter where they are.  Employers have leveraged IoT to drive health and wellness initiatives. As companies recognize that healthy people perform better and are more engaged, they are taking measures to help encourage wellness and offering employees devices like smart watches, heart rhythm trackers and similar devices. These fitness trackers are not intended to track where employees are but how they are.  IoT can be being leveraged by companies to enhance employee engagement and improve productivity. But as IoT in HR advances, companies are also delving into the data provided by user devices. If gathered collectively, the cumulative data becomes a great source of information for the company. 6.  Artificial intelligence & machine learning applications continue to increase. Artificial intelligence (AI) and HR may seem incompatible at first—it is ‘human’ resources after all—but the HR department is increasingly steered by non-human capabilities. A slight majority (51%) of companies have already deployed AI and machine learning and there are a variety of trending use cases for HR.   With AI, employers are in a position to greatly improve the assessment of candidates. For starters, a notable feature of AI is its potential to mitigate the effects of unconscious bias in the hiring process. With AI, candidates are sourced, screened and filtered through large quantities of data. The programs combine data points and use algorithms to identify who will likely be the best candidate. These data points are looked at objectively, completely removing the biases, assumptions and oversight that humans are susceptible to. Virtual reality (VR), by placing candidates directly into in virtual situations, can potentially provide more insight about a candidate than what is written on their resume or what they say in an interview. This can reveal candidates’ capabilities as decision makers and lead to assessment based on behavior and action rather than words.  Meanwhile, machine learning tools can help with recruitment by tracking a candidate’s journey throughout the interview process. HR tools can calculate a holistic score for new talent, drawing data derived from digital screening and online interview results. This score system can help hiring managers objectively arrive at decisions based on data.  On the opposite end of the interview table, machine learning tools can also help deliver streamlined feedback to applicants much faster and objectively than manual methods can.  Augmented reality (AR) could be implemented to transform the employee onboarding experience into something fun and interactive. Employees might start the job with an AR tour of the office where information about key locations, company history and colleagues pops into view as they move around.  Machine learning also has implications for employee retention. HR is charged with courting top talent so they stay with the company and this often involves identifying risk attrition. Through advanced pattern recognition, machine learning draws from an array of variables to recognize attrition risks and patterns in a company’s workforce. These pertinent variables can include years at company, satisfaction rates from surveys, education, department, time at company, training times, time since last promotion, attendance, etc. Once an employee is identified for possible attrition, the HR department can act accordingly.  When it comes to assessment and development, L&D programs can be boosted by machine learning to identify high-potential employees with the skills and qualifications the company needs. Notably, it has been found that the employees ranked highest by the machine learning software aren’t usually those on the promotion track. Instead these high potential employees may be overlooked by traditional methods of assessment.  7.  The rise of headless architecture. In today’s competitive, customer-centric business environment, the race is on for organizations to deliver innovative, personalized customer experiences across various platform. This omnichannel movement is impacting digital content publication and giving rise to “headless architecture” in website design.   In traditional approaches to digital publishing, the front-end and back-end are tightly bound to each other. But in the headless model, they are decoupled and instead communicate through an application programming interface (API). With just one back-end in place, multiple front-end delivery systems can be developed to seamlessly publish the content on various channels such as desktop, mobile and IoT devices. Headless offers more flexibility and choice, allowing companies to choose the front-end framework that makes sense for them. Furthermore, because the headless architecture model keeps the back-end and front-end separated, companies can easily upgrade and customize digital assets without compromising the website’s performance. Digital assets can accumulate as the company grows.  By offering the freedom to innovate, headless architecture can help companies reinvent user experiences as needed. This also helps to future proof their websites because they can revamp the design without replacing the entire content management system. It allows them to migrate existing content already on the platform and integrate it with new tools and frameworks as they emerge.  As the voice for human capital, amid a rapidly evolving workforce, HR plays a critical role in guiding a company’s digital transformation journey. After all, effectively integrating new digital technology requires the right people in the right positions. Despite disruptions from AI and automation, the world of work remains people-centric at its core.  As employees continue to demand a more experiential and omnichannel approach to work, HR teams must be deeply involved in a company’s digital transformation strategy. Keeping pace with  digital trends will help HR do what it does best: merge the best in human skills with state-of-the-art digitalization to create a vibrant, enriching workplace.

Yvonne Sonsino | 08 Aug 2019

AI and automation are constantly changing our world, including the way we work. Take, for example, NASA's 1962 spaceflight. Back then, Katherine Johnson — the central figure in the book and movie "Hidden Figures" — famously checked the math of NASA's computer manually to put a spaceflight into orbit for the first time. Within just a few short years, though, that reliance on human intelligence has shifted to calculators and computers. Today, the progression of automation seems almost scary due to the rapidly increasing sophistication of AI. The Forbes AI index shows that the volume of annual venture capital investment in AI is six times greater now than in the year 2000.1 These giant steps in AI capabilities may appear to uproot our assumptions about how work gets done but are really just a continuum of development. Understanding and harnessing this is critical to both the global economy and, on a deeply personal level, how we all make a living. Prepare Creatively   While robots can easily replace lower-level, routine jobs — such as the work done in factories, farms and fast food restaurants — new indicators emerge almost daily to illustrate how even white-collar occupations in finance, insurance, law and accounting are being automated, as well. If more than just physical and rote work can be replicated, and if human creativity, relationality and intelligence can also be simulated by AI at a more cost-efficient scale, then how will the average human worker possibly compete for work? Leaders in companies of all sizes ought to be asking big questions about retaining the human elements of work, including emotional intelligence, people skills, judgment and natural genius. We need to examine how we retain those important human facets while taking advantage of the most effective tools at our disposal. In preparation for the upcoming people disruption — probably reaching its peak during the next 15 years — organizations must understand the attributes needed to make work successful. Leaders need to start anticipating different future-of-work scenarios, including areas where human productivity, creativity and intelligence are matched or exceeded by artificial counterparts. Automation is inevitable, but there are many possible outcomes. Rather than trying to guess how it will all shake out, today's leaders can prepare their organizations and their employees for an uncertain future. That requires thinking creatively about what skills and capabilities must be retained and which ones can be automated. We see an increasing degree of willingness to take the best of both worlds. Consider these four potential future scenarios to get your imaginative juices flowing, and start thinking about the future in new ways. The Genius Gap   One view on the threat of AI is that it could not only cause a wealth and work gap, but it could also create a genius gap if the conditions to foster genius no longer exist. If robots take over most human jobs, we could face a future condition of human potential left unfulfilled. An increased reliance on technology could cause greater numbers of people to feel unwilling to learn or do much, so that natural intelligence would be unable to bloom and thrive. With no jobs to prepare for, children may no longer be educated in the same ways. The AI revolution could transform genius from a natural resource into one that can only be created by those who have access to the most sophisticated AI, leaving others behind. My Friend the Co-Bot   When it comes to high-value knowledge work involving complex systems and facts, AI will likely develop at such a rate that people can't harness or understand it. This puts them at risk of replacement rather than co-existence. This situation is unlike automating manual or physical labor, which is prone to human error and exhaustion. The efficiencies of automating white-collar work are more subtle — cutting down on mistakes and work hours, removing emotional bias from decisions, and increasing scale and complexity. Knowledge workers must become comfortable working alongside AI and robots. One future vision might include co-bots: robots teamed with human operators and co-workers. Co-bots are a new element of the work relationship that needs to be forged as teams become a diverse mix of human and artificial intelligence. Diversity and Inclusion for the 2020s   AI presents a new way to think about diversity and teams. Diverse teams make better decisions and drive better business results. That includes "cognitive diversity," or differences in problem-solving or information-processing styles. An obvious next step is factoring AI-powered robots into the cognitive diversity of your team. Their problem-solving style is known, determined by the code they run on and the data sets they are trained on. They are the perfect counterweight to unstructured, variable human team members. Optimizing a team will soon mean designing a powerful combination of creative human minds with structured AI minds, applied to different elements of the task at hand. HR's New Job   The role of HR must evolve with increased automation in the workplace. Human and AI workers will exist together in a labor pool, with HR expected to deploy the best workers for any given task. This will require understanding the power and aptitudes of robots, and — perhaps more importantly — their limitations. Deploying human capabilities against the right tasks will become a key skill for HR. As HR becomes increasingly focused on data management and analytics capabilities, HR leaders need to consider the ethics of personal data obtained from employees, potential employees, contractors and customers. The digital and smart work tools that will dominate the future of business tend to collect mountains of information about their users. As a result, HR has a deeper responsibility as a guardian of personal data and human privacy. By considering these potential future scenarios, leaders can start strategizing about how to prepare their organizations and their employees for an increased reliance on AI and automation. Sources: Columbus, Louis. "10 Charts That Will Change Your Perspective on Artificial Intelligence's Growth." Forbes. Jan. 12, 2018. https://www.forbes.com/sites/louiscolumbus/2018/01/12/10-charts-that-will-change-your-perspective-on-artificial-intelligences-growth/#2314726a4758.  

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Editorial Staff | 19 Aug 2019

Learn about the latest employee financial wellness trends emerging in 2019. Employees and employers alike can agree on at least one value: financial security. Finances can affect every function of a company and, for the individual, their personal life. When employees face a difficult financial situation, it can impede on job satisfaction, attitude and performance. Financially stressed workers miss more work and incur higher healthcare costs than their peers. These factors inevitably take a toll on a company’s employee engagement levelsand eventually the bottom line—especially if financial hardship impacts multiple employees. At the same time, HR professionals know that people don’t just work for the paycheck and that increasing salary alone won’t necessarily boost job satisfaction. Workers also strive for positive company culture, flexible scheduling, recognition, L&D opportunities, retirement plans, and other benefits. Naturally, apart from the salary figure, employees want to work for a company that values them and offers a bright future. As global unemployment reaches its lowest point in 40 years and we enter an employment economy, employers are facing an increasingly competitive hiring landscape where the benefits package is an increasingly important tool for attracting and retaining top talent. One benefit that continues to gain traction is a structured financial wellness program. With financial wellness solutions, employees receive financial education through courses on goal planning, basic financial literacy, budgeting, debt management and alleviating financial stress. The aim of a financial wellness program is to guide employees towards actions that help them reach goals for every stage of their financial lives, such as saving for a house, a car, college, or retirement. Mercer’s Healthy Wealthy and Work-wise report found employees (as well as employers) report higher satisfaction with their benefit plans when financial wellness is offered. Furthermore, companies report up to a 3-to-1 return on their financial wellness investment. Employees are worried about their finances   For many employees, money is the number one source of stress. Mercer’s Inside Employees Minds report asked 3,000 workers questions about the extent to which financial stress affected their work, finding that 62% of those who are financially challenged identify being able to pay monthly expenses as their biggest financial concern—even among people with an annual household income of $100,000 or more. Financial stress varies among demographics. Young adults are burdened with high levels of debt, especially with educated-related expenses for university. Families can struggle to meet financial goals due to cash flow issues or unexpected expenses. Even older adults often carry financial stress from caring for aging parents or children who have moved back home. Single parents have their own set of financial stressors. Therefore, when designing a financial wellness program, it is important to consider the entire scope of your workforce and the various financial lives they may lead. Financial wellness trends to have on your radar   For all the struggles brought on by financial hardship, there is hope that financial wellness programs can remedy the situation to the benefit of both employees and employers. A Gallup poll found financial wellness is closely linked with positive behavioral changes and stronger relationships, regardless of income levels. By implementing financial wellness programs, employers also enjoy the benefit of having a happier, healthier and more productive workforce. A joint study from Morgan Stanley and the Financial Health Network found that 75% of employees said a financial wellness program is an important benefit and 60% said they would be more inclined to stay at a company that offered financial wellness solutions. While employers are recognizing the importance of combating financial stress among employees, it appears they may need to improve these efforts to help employees. Cigna’s global well-being survey of employees in Asia Pacific, Europe, Africa, the Middle East, and North America found that 87% of employees are stressed at work—with personal finances being the top stressor—and 38% claim no stress management support is provided at all. While 46% of employees report they receive support from their employer, only 28% feel this support is adequate. It’s time to raise the bar on financial wellness benefits. Here are some emerging trends and strategies companies are considering so they can maximize employee financial wellness solutions and stand out in the marketplace. 1.  Users are demanding technology-driven solutions for personalization. For financial planning solutions, users want a modern, simple interface that offers a comprehensive view of their financial situation and outlines a guided, personalized path to reaching their financial goals and staying accountable. According to a recent Forrester study, customers of wealth management firms are demanding more functionality and digitalization with financial planning solutions. This demand is making features like account aggregation, personalized content delivery and accountability triggers standard elements for a successful financial wellness program. “Help me help myself” tools are being personalized for the user with finance snapshots, budget planners and loan repayment calculators. Notably, a study from Morgan Stanley and the Financial Health Network found that 42% of employees said they feel inadequately informed about the benefits and programs their employer offers. Of the employees who do not use all of the benefits, many said they would be more apt to use them if they were explained more clearly and made easier to access. According to Thompsons Online Benefits Watch, 70% of employees want mobile access to their benefits packages but only 51% of employers are offering it. These gaps mean there is an opportunity for companies to elevate their financial wellness programs and make them more usable and appealing to employees. Employers should consider informing employees about benefits through live webinars, social media or SMS alerts. The program should also be fully accessible by mobile and offer online tools that personalize the user experience. 2.  Data analytics & digital technology are personalizing financial wellness programs. Data analytics is shaping financial wellness programs to provide the level of personalization employees have come to expect in the digital age. These data analytics can help differentiate between types and categories of employees, allowing programs to be personalized for live events and stages. Just as online stores use aggregated consumer preference and demographic data to make recommendations and suggestions, financial wellness platforms are beginning to employ data analytics and algorithms to determine whether an employee is making progress or might need some extra assistance to stay on track. Some programs employ data analytics to frame an employees’ savings and spending habits and compare them to their peers. These programs can also analyze behaviors and provide scores to help employees see if they are improving on their savings or debt managements. Some programs can also offer employers the ability to create targeted marketing campaigns that focus on personal milestones for employees, such as buying a new car or getting married. These milestones can be used to inspire specific savings behaviors and spending habits, which might mean recommending homeowners insurance or opening an education savings account. Data analytics can also be used to build each employee a profile, which can then be supported by customized self-service tools to help employees get answers to specific questions and better plan for possible life changes. For example, with their profile input and all their financial information accounted for, employees can determine just how much additional life insurance they might need to purchase if they have a child. Without data analytics, the manual process of calculating this figure would be tedious, time consuming and require a potentially costly meeting with a financial advisor. On the employer side, data can be collected to determine how well the financial wellness program is performing. This data can help drive the program to offer new components and functions in ways that better meet the needs of employees. 3.  Employees want actual help not hype. As financial wellness programs continue to shape the benefits ecosystem, more employees are expecting that their employers will care about their financial security beyond just signing their paycheck. According to Thompsons Online Benefits Watch, 79% of employees trust their employers to deliver sound advice on planning, saving and investing. Employers are expected to deliver real, actionable ways to help employees improve upon their financial situation. A study from Merrill Lynch found a sharp disconnect in what employees want to have and what employers are offering in financial wellness programs. For example, employees generally want to work on meeting end goals, and they’d prefer to focus on one goal at a time. But employers are taking a heavy approach, emphasizing a comprehensive approach to controlling overall finances. While the comprehensive strategy of employers is certainly well-intentioned, it has a tendency to overwhelm users. Financial planning can be intimidating, especially for those in stressful situations. To counter this, companies in the wellness space are designing programs from the employee perspective to offer a holistic approach. Holistic programs, which integrate financial health with mental and physical health, can help employees open their financial “junk drawer” and make connections between the various elements of financial health and life—from saving for a wedding, buying a home, managing loan debt, etc. Well-designed programs will demystify the topic of financial wellness rather than scare employees away with an onslaught of complex information and suggestions for services and financial products they don’t understand. 4.  Building the business case for financial wellness programs: engagement, productivity & success. Whether management wants to admit it or not, employees are bringing financial stress to work and it’s impacting the company’s bottom line. In a survey from the Society for Human Resource Management, 83% of respondents reported that personal financial challenges had at least some effect on their overall performance at work in the past year. This disengagement means big losses for businesses. Workforce stress is potentially costing companies more than $5 million a year.  Because of the business losses incurred, supporting employees’ financial wellness is becoming a major priority for organizations and the trend is catching on. Research from GuideSpark found that financial wellness is the third most important type of wellness program to employees, at 82%, behind stress management (86%) and physical fitness (85%). The results of employee wellness programs are promising. According to Employee Benefit News, participants in financial wellness programs demonstrate progress in their finances. The percentage of participants feeling “highly stressed” about personal finances fell from 52.4% to 19.2% after the completion of a financial wellness program. Similarly, 56% of participants said they believe they’re in a better position to manage their monthly cash flow after the completion of a financial wellness program. 5.  An increased focus on student loan repayment & affordable education. In the HR industry, employee development has become an impetus for employee engagement. But the truth is that for many employees, their past continues to weigh them down. Higher education costs are contributing to unprecedented student loan debt challenges in both developed and developing countries. As university tuition costs continue to rise, student loan debts have reached concerning record levels for graduates. The World Bank reports that developing countries face greater higher-education challenges than developed countries. Enormous debt and high tuition costs are setting back many employees before they have the chance to get ahead, which is widening the talent gap and thinning talent pools for companies. Amid rising tuition and mounting debt, HR professionals owe it to companies and employees to offer solutions to the challenges they both face. This can be done through loan repayment education that helps employees strategize to pay off loans as quickly as possible. Taking it a step further, some HR departments may be able to convince companies to offer loan repayment and tuition reimbursement programs. When employees are worried about finances, they may have to switch jobs and find an employer willing to give them the tools and monetary compensation they need. Offering loan repayment advice or support offers employees a solution to a personal problem they face. They will likely become more invested in the company, which can translate to boosted morale and productivity across the company’s workforce. Tuition reimbursement and the encouragement of further education can also go a long way in helping companies thrive in the digital transformation and foster a culture of lifelong learning. Amid digitalization, the workforce is shifting from fixed job titles and detailed job descriptions to ever-revolving roles. At the current pace of technology growth, chances are that many of today’s prized technical skills will be obsolete within a few short years. As the skill gap grows, companies won’t have the luxury of easily recruiting new hires. They will instead need to focus on upskilling and recruiting lifelong learners who have a passion for integrating new technology into business operations. Offering tuition reimbursement or education planning advice will help attract and develop a talented workforce for the digital age. People around the world are experiencing record amounts of stress, according to Gallup’s Annual Global Emotions Report, and finances are certainly among the greatest stressors. As the stress escalates, more companies will find their employees’ personal bottom lines eroding the company’s bottom line. Without intervention, employees’ financial stress will rise, and companies will suffer drops in productivity, increased absenteeism, and low engagement levels. When implemented properly, financial wellness solutions can be a rising tide that lifts all boats—benefiting both employees and the company. The HR department is in a unique position to make this connection, sending the message that employees and companies are in this together.

Isabelle Hernu-Sfeir | 19 Aug 2019

In accordance with the ‘Professional Future’ law passed on September 5, 2018, French companies/subsidiaries with over 50 employees are now required to publish on their website their Gender Pay Equity Index on an annual basis. The deadline imposed by the law for the first publication of the index depends on the size of the French entities: - 1st March 2019 for entities with over 1,000 employees; - 1st September 2019 for entities with 250 to 1,000 employees; - 1st March 2020 for entities with 50 to 250 employees. The law sets out the five indicators that should be assessed to establish the index value. If the value of the index turns out to be less than 75 out of 100, the company then must implement actions to reach this threshold within a three-year timeframe. Should the threshold not be reached after three years or should the company not publish the index, then the company will incur a financial penalty of up to 1% of payroll. The French State intends to follow this very closely and is expected to review 7,000 companies in 2019. This is a wonderful opportunity to revisit your company action plan to reduce the gender pay gap. It is a call to take action to improve diversity and inclusion in organizations’ career, talent and performance management processes. The French pay equity index is a score out of 100 points defined as the total of 5 indicators: 1. The Gender Pay Gap, for identical positions and ages (up to 40 points) (0 points allocated if the gap is more than 20%); 2. The difference between the number of men and women given a pay increase during the year (up to 20 points); 3. The difference between the number of men and women promoted during the year (up to 15 points); 4. The percentage of employees given a pay rise on their return from maternity leave (up to 15 points). This catching-up pay rise has been mandatory since 2006. If only one employee did not get it over the year on return from maternity leave, then the company gets no points for this criteria; 5. The number of people from the under-represented gender (usually women) among the 10 highest earners (up to 10 points). Based on published indices to date, this last indicator is the one on which companies score the lowest. The average representation of the women in the 10 highest earners is two or three out of ten. The above indicators 2 and 3 are merged into one indicator over 35 points for French entities with less than 250 employees. Would you like to find out more?      Mercer France can help you ensure you are compliant with the gender pay equity law in France and can help you implement efficient actions to reduce your Gender Pay Gap and improve diversity and inclusion in your HR processes. Click here to get in touch.

Editorial Staff | 17 Aug 2019

There is a huge opportunity for blockchain to establish itself in the healthcare sector. Learn more about specific use cases that can help innovate how HR departments deliver healthcare & wellness benefits. Blockchain technology is one of the most disruptive technologies on the market today, with multiple industries adopting it to optimize processes and innovate the way companies function. It has proven to be a game changer in the business arena and the global blockchain technology market is estimated to amass US$20 billion in revenue by 2024. Meanwhile, SAP reports that 71% of business leaders who are actively using blockchain believe it plays a key role in advancing technology and reestablishing industry standards.  While blockchain has already been widely integrated in processes for supply chains, banking and cryptocurrency (e.g. Bitcoin), the healthcare industry has also been identified as one of the top industries likely to be disrupted. Blockchain technology could offer solutions to some of  healthcare’s greatest challenges, from securely managing patients’ medical data to tracking large databases of drugs through the supply chain or extracting healthcare data from clinical trials. As the technology advances and becomes more readily available, more healthcare organizations across the industry will be adopting blockchain solutions to redesign the global healthcare ecosystem.  HR serves a critical function for the healthcare industry and is an intermediate between employees and one of the most valued aspects of life: their health. According to Bitfortune, 55% of healthcare applications will adopt blockchain platforms for commercial deployment by 2025. Meanwhile, adoption seems to be ramping up with multiple governments around the world announcing plans to invest in blockchain and encourage its implementation. For example, Singapore’s government has announced financial incentives to enterprises for adopting the technology. Amid an evolving industry, it is imperative HR professionals stay current with how blockchain’s ledger technology is disrupting the healthcare industry. They should especially keep a pulse on the implications blockchain holds for delivering the employee experience with improved healthcare and other benefits. Use cases: how blockchain can help HR transform in delivering healthcare & benefits   While the use of blockchain technology is still more commonly associated with payment functions, its disruption to HR will be profound and pervasive in coming years with many possible use cases across the functions of an HR department. To prepare for the coming blockchain revolution, HR departments should focus on identifying problem areas and inefficient processes that could be addressed by the transparency, accuracy and speed that blockchain provides. The processes most primed for blockchain disruption are those that are burdensome and expensive with substantial data collection and third-party verification. For this reason, healthcare and benefits could be the ideal match for an HR department looking to adopt blockchain technology. 1.  Enhancing fraud prevention & cybersecurity for sensitive data in HR. HR teams conduct some of the highest-volume financial transactions for an organization and handle sensitive employee data related to healthcare (as well as, banking, disciplinary records, performance records, expense reimbursement, and more). Unfortunately, all of the data an HR department maintains is at risk of being exploited and, as more companies face data breaches, it is becoming increasingly important that proper measures are in place to maintain security and prevent fraud. A company’s cyber risks largely emerge from an underlying lack of transparency and accuracy in its data systems. Because of its capacity for promoting transparency and accuracy, blockchain technology is being lauded as a solution for combating cybersecurity crime and protecting data. While blockchain’s popularity grows among large companies and companies that hold critical, sensitive data (for example, Lockheed Martin is trusting it to secure data), it is also being used by nonprofits to collect donations securely. It is important to consider that blockchain technology can mitigate both internal fraud and external hacks of sensitive employee records. Access to the blockchain is limited and controlled—even those who have access are not able to modify the records. This limits both internal fraud and external hacks of sensitive employee records. In the digital age, data is a major asset for a company. Blockchain essentially functions to decentralize data and places it across a large network of computer storage spaces to reduce the risk that a single hacking event could usurp all the data a company has. By using blockchain, HR departments can introduce a solid measure of security against cyber threats to protect their employees’ health information. 2.  Improving health insurance, health records & patient experience with ‘smart contracts.’ Much of blockchain’s power comes in the application of ‘smart contracts’, which many organizations are using to make payments to employees, contractors and vendors. In fact, it is reported that 45% of early adopters of blockchain are already implementing smart contracts within their organizations. A smart contract codes a set of parameters using statements in ‘if this, then that” (IFTTT) language. These contracts are designed so that, once executed, the entire process is dictated by these codes. It is also made irreversible unless of course terms of a contract need to be updated. While smart contracts have many applications for HR functions in terms of payroll, there are some very important considerations HR departments should be aware of in terms of healthcare. Smart contracts have the potential to be used for insurance, including how patients buy insurance. Through a smart contract, all details of an insuree’s policy could be stored in a patient profile. This profile would then be stored on the blockchain platform in a safe and secure ledger that is less prone to hacks than the databases currently used.  Smart contracts could also impact the insurance claim process by eliminating the need for lengthy forms and time lags. If an insuree undergoes a medical procedure covered by the policy, a smart contract would be automatically triggered to transfer money from the insurance company’s account straight to the hospital or medical provider. The automation cuts out delays and hassles, allowing for correct payment of the medical service. There are also numerous implications for electronic medical records, information and medical data sharing. Storing patient’s electronic health records (EHR) on secured ledgers, for example, would allow a patient to move easily from one hospital to another without having to fill out numerous forms. The blockchain network would safely store their records, allowing their new physician to access them without delay. While hospitals and healthcare providers currently rely on a number of databases filled with patient data, these can be too centralized and restrictive for sharing potentially life-saving insights around the globe. If health records were to be kept in a smart contract stored on the blockchain, the data analytics would be available to hospitals, providers and research institutions everywhere. With widespread adoption of this healthcare blockchain technology, an individual could essentially walk into any hospital in the world for treatment and, with their private key, their health data would be accessible instantly. 3.  Offering better access to healthcare & other benefits. Blockchain’s ‘smart contracts’ could also change how employees gain access to healthcare and benefits. Once the employer outlines the terms of employment prior to hiring, HR is charged with upholding the conditions in the contract. These terms include provisions that employees value in their employee experience, such as healthcare insurance, wellness programs or other benefits. The current model of manually delivering benefits runs risks of errors and could get in the way of properly servicing employees. With blockchain, HR could seamlessly deliver upon these benefits by implementing smart contracts that automate the process. For example, if a company outlines that an employee’s benefits packages begins after a specific waiting period, the smart contract would be written to automate these benefits at the right time and in the right fashion. Not only does blockchain have the potential to improve security and automation of benefits, it is possible for benefits to be more personalized to each individual employee. In today’s digital world, consumers are accustomed to enjoying personalized experiences and this trend of hyper-personalization is reaching the workplace. Through blockchain’s smart contracts, which could be integrated with artificial intelligence (AI) and IoT technology, companies would be able to empower employees with benefits packages and wellness programs that are tailored specifically for them and their evolving needs. These personalized packages could become a critical tool for enhancing the employee experience. Challenges HR faces in implementing blockchain to deliver benefits   Blockchain is a quickly evolving technology with new applications and trends regularly emerging. Though it is becoming more widely adopted across a variety of industries, it is inevitable that first-time users will run into issues and challenges in implementing it. For HR departments, it is imperative to consider these challenges as they explore which processes might be impacted by blockchain. 1.  Data standardization & integration with legacy systems. With blockchain being a new technology, protocols and standards for its application are not yet established. When the internet began to commercialize, it initially struggled without proper protocols. But over time, controls were implemented to allow for browser compatibility, cross-platform multimedia and better interconnectivity between servers. As more sectors adopt blockchain—especially healthcare which handles sensitive and personal data—ensuring that blockchains offer an industry-wide benefit will require widespread collaboration and standardization. For example, it will have to be determined when private, as opposed to public, if blockchains make sense. Otherwise, this could impact the security and functionality of blockchain technology. All industries will have to get over a major hurdle when it comes to integrating blockchain solutions with legacy systems—or replacing legacy systems altogether. But the hurdle is especially high for HR and healthcare, which are often bound to specific legal regulations and already have very specific HR or healthcare systems in place that incorporate these parameters. Synching these systems or replacing them with blockchain technology could prove to be difficult. 2.  Adoption & incentives for participation. Despite enthusiasm and a strong record of success, blockchain adoption has proven to be difficult for companies. Greenwich Associates surveyed companies that have implemented blockchain and 57% reported its integration has been harder than expected. In terms of scalability, 42% of respondents reported it as a major issue, 39% said it is a minor issue and 19% said it is no issue at all. Much of the challenges are culture or people-related, rather than technical. For example, most people resist change and, if they do tolerate it, they generally prefer it to happen gradually and incrementally. The oppositions to change could be even more pronounced for those in HR, especially with employees across an organization resisting how healthcare and employee benefits—which are very personal—is administered. Some of the proposed uses for blockchain would result in systemic changes that rapidly transform the entire system. Even if employees and management are open to change, HR still has work cut out in hiring, education and training. Blockchain will require companies to hire more research and analytical staff as well as offer training on how to properly implement it. But this is where HR thrives. By helping to cultivate a culture of digital transformation, HR departments can also guide companies on their blockchain journey. 3.  High costs of developing & operating blockchain technology. The adoption of blockchain technology is likely to offer long-term benefits in regard to productivity, efficiency, timeliness, and reduced costs. However, one of the greatest obstacles to widespread adoption of blockchain is the high cost to initially install it. The software required to implement blockchain within an organization must typically be developed specifically for each individual company. This makes it expensive to obtain, whether hiring in-house or buying from a developer. Moreover, even after the blockchain software is developed, the company would also have to purchase specialized hardware to be used with it.  In addition to the software development costs, companies must also find qualified personnel to operate the technology.  The blockchain space is new and growing so rapidly that the demand for professionals in the field outweighs the supply. This makes hiring qualified blockchain experts—either in-house or as consultants—quite costly. Currently, it appears that the world’s largest corporations are the only ones benefiting from blockchain because they have the money, resources and data to spare. Furthermore, the technology itself seems too new and not yet fully understood for SMEs to adopt in droves. However, this is all likely to change over time. The commercialization of the internet was gradual and in the early days it required companies who wanted to go online to put up a substantial amount of money upfront and invest in customized solutions. Eventually, as blockchain becomes more mainstream, it will also become much less expensive, more streamlined and more accessible to companies. Blockchain is already demonstrating its potential to disrupt business as we know it. Because the HR department guards and manages large amounts of sensitive data that are critical to employees’ lives and how a company operates, it is likely that blockchain technology will be infused directly into the HR function to add transparency and trust to various processes. Healthcare and benefits administration is one of the processes that blockchain technology is likely to directly transform. Though there are challenges in cost, scalability and perception to overcome, HR departments could potentially use blockchain technology to provide employees with greater access to more personalized benefits packages. Furthermore, as time is freed up by automated processing, HR departments will be able to turn their efforts to more value-adding activities such as building employee engagement and experience.

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