Blockchain has potential to make a huge impact. Learn about fascinating blockchain trends that are emerging in 2019 and beyond. Blockchain technology was invented to safeguard the cryptocurrency infrastructure (e.g. Bitcoin), enabling secure financial transactions without the need for a bank or a middleman. But blockchain’s ledger technology is now expanding beyond digital currency and financial services, offering great potential to improve upon many areas of our lives. As blockchain matures and becomes more accessible, companies across various industries are finding compelling use cases for blockchain to make businesses processes more efficient. For example, banks can now reduce infrastructure cost by 30% throughblockchain solutions. This is achieved by encrypting millions of storage points, none of which contain a full name or an account number. While blockchain is currently only being used by 0.5% of the global population, emerging trends are making it more scalable. It is anticipated that 80% of the population will be using blockchain technology in some capacity within 10 years. Because the HR department is charged with managing so much sensitive data, blockchain technology will be integrated directly into the HR function through a multitude of possible use cases—adding transparency and trust to an organization’s operations. The evolution of blockchain will also mean companies need a workforce with new skills, so HR will be kept busy with recruitment and talent management. The following blockchain trends are lifting ledger technology from the obscurity of cryptocurrency and making blockchain part of the mainstream conversation. 1. More potential real-world uses on the horizon will raise the visibility of blockchain. While cryptocurrency and financial institutions are the pioneers of blockchain, it is important to note that tokenization and securing payments are just precursors to many potential real-world uses for ledger technology. Every transaction on the blockchain is on public record and its enhanced security makes it a virtually incorruptible platform. Because no central party will ever be in control of all of the record keeping, blockchain can be used to mitigate financial, political and institutional corruption in corporations and governments, alike. Blockchain may also be able to improve the political sphere in terms of voting systems. Because records cannot be altered in any way, blockchain is ideal for voter registration, identification and vote tallying. Election corruption and voter fraud would be eliminated, ensuring a more accurate, fair electoral process. The general public will also be drawn to blockchain’s ability to eliminate transactions fees. Owing to decentralization, sending and receiving money can be expedited and enhanced. This has implications for automated legal procedures, customs payments, ownership transfers and business transactions—allowing widespread disintermediation across industries and economies. Another mainstream use could be in public records of ownership, citizenship and identity. Even in the thriving digital era, these records are stored in centralized databases for security. However, this exposes them to tampering because of the intermediaries it engages. Blockchain opens up the possibility of a decentralized, public, fixed and consensus-driven ledger of records that could nullify the need for intermediaries. A groundbreaking example of this is Estonia’s E-Citizenship Program, which stores citizens’ information on a blockchain. The application of blockchain can also be extended to include organizational information for the HR department, where one day a company can maintain one identity stored in a master Blockchain. This could be safely accessed by all stakeholders including vendors, employees, customers and tax authorities. 2. Blockchain as a Service (BaaS) will facilitate business adoption. A Blockchain-as-a-Service (BAAS) platform is a full-service cloud-based solution that connects developers, entrepreneurs and enterprises on one platform. On the BaaS, stakeholders can develop, test and deploy blockchain applications and smart contracts. Moreover, the BaaS platform provides all the necessary infrastructure and operational support, ensuring that the applications run efficiently. BaaS providers include major companies like Microsoft, IBM, SAP, Amazon, Oracle, and Hewlett Packard. These providers are nurturing blockchain adoption among business because the platforms enable companies to engage blockchain projects without having to spend anywhere near as much money as they would developing customized blockchain solutions independently. As more businesses look for convenient and cost-effective ways to implement blockchain technology, BaaS collections will most likely continue to expand. Keeping an eye on the emerging BaaS space can help an HR department choose the right provider for (future) company needs. 3. Blockchain will be less associated with cryptocurrency & possibly rebranded. Blockchain was born and bred to protect Bitcoin’s infrastructure— but now ledger technology is leaving the cryptocurrency nest to explore more business endeavors. Blockchain’s association with the volatile cryptocurrency market has potentially diluted its reputation. There are still negative connotations with cryptocurrencies, including wild price swings and the perceived link to people buying illegal items from the dark web. But mainstream industries, such as manufacturing and retail, are proving the power of blockchain to improve supply chain management and ownership tracking. To break out of the cryptocurrency pigeonhole, it is expected that the blockchain industry will make a concerted effort to establish an identity that’s separate from cryptocurrency—and better educate the business sphere on the advantages it offers, beyond financial transactions. To take the rebrand a step further, research from Forrester suggests that it might be beneficial for the blockchain industry to drop the name blockchain and replace it with distributed ledger technology (DLT). 4. Blockchain enabled Internet of Things (IoT) systems. Gartner predicts that the number of installed Internet of Thing (IoT) will exceed 20 billion by 2020. As HR departments integrate more IoT into companies, there is growing concern because these connected devices often open the door for hackers. The same vigilance applied to computers is sometimes overlooked when ensuring the security of the IoT infrastructure. As a company’s digital ecosystem expands to include more IoT devices, they can be left vulnerable to hacks. Blockchain offers strong protections against data tampering by locking access to IoT devices and shutting down compromised devices within the IoT infrastructure if a security event is suspected. Blockchain serves to effectively decentralize data, which provides a safety net from hacks and fraud. In the digital age, data is fast becoming the most prized asset a company has. If you store all your jewelry, cash and other valuables in one location of your home, what happens if a burglar enters your home and is able to find this location? Because it spreads data across a large network of computer storage spaces, storing records on a blockchain network is like placing your most valuable digital assets across a multitude of places to mitigate your risk of being severely impacted or wiped out by a hacking event. One of the first blockchain IoT-specific platforms is IOTA, which provides transaction settlements and data transfer layering for IoT devices. IOTA has launched its Tangle platform, which developers describe as “going beyond blockchain.” This serves as a blockless, cryptographic, decentralized network, where, rather than outsourcing network verification to data miners, users verify transactions of other users. Such IoT platforms promote greater scalability while also eliminating the need to pay transaction fees to data miners. These are both essential factors in a practical IoT network, which could potentially require the processing of billions of micro-transactions between devices daily. 5. Hybrid blockchains are promising the best of public & private networks. As blockchain rapidly comes of age, there are generally two communities that have been established. On one side of the tracks, there is a large community supporting public blockchains and arguing for decentralization. On the other side, there is a more niche community—comprised mostly of businesses and their clients—pushing for private blockchains operated by a single entity that also grants permissions to users. Traditional blockchains (e.g. Bitcoin and Ethereum) are public and completely open, meaning anyone can join the consensus protocol and participate in maintaining the shared ledger. Users often join public blockchains because, apart from operating in a decentralized system, they can offer incentives for mining or staking. But public blockchain have limitations, including visibility. Data is completely transparent so anyone can access it, presenting a privacy concern for many uses. In some blockchain use cases, data would need to be restricted and a public blockchain cannot do this. Public blockchains also demand high computational power and consume large amounts of electricity. There are also scalability concerns for public blockchains because the consensus protocol places limits on speed and the number of transactions it can process. Private blockchains operate similarly to public blockchains with an important exception: they are not open to everyone and require an invitation to join. These blockchains are also permissioned networks and can be customized to interact with certain users differently than the general users. Unlike in the public blockchain, provisions can be outlined to determine who is allowed to participate in the network and what specific transactions they are authorized to conduct. While private blockchains address some data security concerns, the main drawback is that they are not as decentralized as the public blockchains. To build a bridge, hybrid blockchains are being developed to offer decentralized platforms that can restrict visibility of some information on the network. In particular, this model is appealing to regulated markets because it offers the benefits of public and private blockchains in one network. Through a hybrid blockchain solution, a company can conduct transactions from certain short-term partners and vendors on the public blockchain side. Since the transaction timeline of these partners is shorter, public blockchain is an ideal solution. It would not require the level of trust needed with a private blockchain. The private side of a hybrid blockchain solution can be used to conduct transactions with long term partners. It would operate with a classic permissioned setup, where authorized parties can view, transact and make changes based on permissions they are given. This private network is fast, scalable and secure. However, adding more parties and establishing their trust takes longer than on a public blockchain so it would only be reserved for transactions with designated users. 6. Sidechains are improving scalability. For all their power and complexity, blockchains face challenges in scalability and speed. These limit some applications of the relatively new technology. One solution that seeks to improve blockchain efficiency and scalability is the sidechain. As its name indicates, a sidechain is a type of blockchain that accompanies a master chain. In the relationship, the master chain is the parent chain and the sidechain is the child chain. In order to trade assets from the master chain for assets from the sidechain, the user would first need to send their assets on the master chain to a certain location. This would effectively place a lock on the assets for the time being. After the transaction completes, the sidechain would receive a confirmation and release a designated amount of the sidechain to the user—equivalent to the amount of assets locked up by the main chain times the exchange rate. This also works in reverse to trade assets from the sidechain to the master chain. As sidechains store data and process transactions, they help to uphold the integrity of the master blockchain while making it smaller and more agile. When implemented correctly, sidechains relieve the master chain of some of the work, helping to solve the inherent scaling problem associated with blockchain solutions. Sidechains have practical applications for stock exchanges. 7. Artificial intelligence (AI) & blockchain are teaming up. While both AI and blockchain involve high levels of distinct technical complexity, there is potential for these two technologies to team up and score major technological victories in the next five to ten years. The first change win might be in optimizing data management. Blockchain currently relies on hashing algorithms for data mining and these operate in a brute force style, meaning the algorithm inputs all possible sequences of characters until it finds the one that matches with the verification process. This demands extra steps, lags and effort. AI can step in to offer an intelligent data mining system that streamlines the entire process and cuts down total costs exponentially. This streamlining also has implications for improved energy consumption for blockchains. AI can infuse natural language processing, image recognition and multi-dimensional real-time data transformation capabilities into a blockchain’s peer-to-peer linking. This allows data miners to turn a large-scale system into a series of micro-economic environments. In turn, this can optimize data transactions in a secure and effective manner. Most importantly, machine learning intelligence adds flexibility to the process. On the flipside, blockchain’s data decentralization technology can help AI step up its game in creating better machine learning models. Introducing secure data sharing across systems, which have traditionally stored and operated data in an isolated manner, introduces higher quality data. Richer data means better models, better predictions and better insights. Data decentralization will offer companies of all sizes access to analytics and insights they could not possibly generate from an individual data source. When AI’s deep learning algorithms gain access to multiple data points from multiple data pools that have been standardized by blockchain, the competitive advantage of an AI technology will no longer be about finding the data itself. Nor will it be about having the resources and funds to gather the most data. Instead the focus will be on writing the most innovative algorithms. This evolution ushers in a new era of scalability for deep learning where AI finds itself in new marketplaces, opens doors for smaller players and gains trust with the public at large. The future looks bright for blockchain and it will likely innovate business processes in many industries, including human resources. However, its widespread adoption and full potential have yet to be seen. The next phase of development for blockchain will be in addressing scalability and accessibility challenges, which will pave the way for more applications and varied use cases across more industries. Amid the rapidly evolving digital landscape, one thing is clear: blockchain is in a state of metamorphosis with many disruptive trends on the horizon. For HR professionals, it is important to keep an eye out on how this nascent technology is impacting various industries and making its way to the world of work.
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.
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.
Learn about the latest diversity & inclusion trends emerging in 2019. Promoting diversity and inclusion (D&I) in the workplace is a critical element of talent management as it cultivates employee engagement and enhances the employee experience. In an inclusive culture, team members feel valued, respected and accepted as individuals—and are therefore encouraged to fully participate and contribute as their authentic, unique selves. A diverse staff provides companies with different perspectives and new skills that infuse company culture with innovation and creativity, which are key to thriving in digital transformation. Cultural evolution, emerging markets, advancing technology, generational differences, widespread immigration and a widening skills gap are contributing to an increasingly complex corporate environment that challenges old processes and necessitates new ways of building a workforce. These forces—while presenting challenges for HR leaders in recruiting, developing and retaining top talent—also open doors. Innovation comes from all corners of the globe. Strong D&I improves a company’s performance because it opens new talent pools and expands points of view and experiences. Businesses that do not recruit from diverse talent pools are at risk of missing out on qualified candidates and incurring higher recruitment costs. Why Diversity & Inclusions Matters D&I progress not only helps organizations fill positions with qualified candidates more efficiently—it also raises the employer brand, which is becoming increasingly important for attracting the right talent. According to research from Glassdoor, 67% of active job seekers said a diverse workforce is important when considering job offers and 57% of employees think their companies should be more diverse. Having a diverse, multilingual workforce from varying ethnic backgrounds can also be helpful for companies that want to expand or improve operations in new markets locally, regionally, nationally and internationally. As millions of new internet users sign online each year for the first time, companies have an unprecedented opportunity to communicate and captivate new customers and draw in talent. D&I can help accomplish this, as diverse companies are 70% more likely to capture new markets. A large-scale shift toward diversity and inclusion workplace policies can make waves around the world. For example, the World Economic Forum has projected that correcting gender segregation in employment and developing women’s entrepreneurship could increase productivity globally by as much as 16%. Trending Now: Diversity & Inclusion The compelling business case for D&I means that more companies will adopt stronger policies and become more adept at integrating a myriad of individuals into one cohesive workforce. D&I will therefore become the norm rather than the exception. Keeping a strong pulse on the D&I trends emerging in the workplace can help a company stay a beat ahead of the competition and prepare for the future of work. 1. Deploying artificial intelligence (AI) technology to remove unconscious bias. Unconscious bias has become a hot topic of the D&I conversation in HR, as companies make strides toward becoming more diverse and inclusive. Companies cannot afford to ignore implicit bias for it has serious consequences on the employee experience, whether in hiring/recruitment, employee feedback, performance reviews, or development. The Center for Talent Innovation found that employees at large companies who perceive bias are: · Three times as likely to plan to leave their employers within the year. · More than twice as likely to have withheld ideas or solutions in the past six months at work. · Five times as likely to speak about their company in a negative manner on social media. Even if a company commits itself to fully eliminating unconscious bias, it still proves to be difficult because these predispositions operate automatically and act without us even knowing it. All humans, whether we notice it or not, engage in unconscious bias to some degree. It’s often involuntary and rooted in the brain. Furthermore, there are far too many biases to manually remove them from our decision-making processes. Because unconscious bias is an ingrained human trait, some experts suggest that the best way to overcome it is via non-human solutions—such as artificial intelligence (AI). A notable feature of AI in HR technology is its potential to mitigate the effects unconscious bias companies face in the hiring and development 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 naturally hindered by. AI for human resource systems can be also programmed to automatically ignore a candidate’s demographic information, such as gender, race and age. It can take a step beyond protecting the basic demographic information and disregard other details that may indicate racial or socioeconomic status, such as school names and zip codes. When it comes to assessment and development, L&D programs can be strengthened with machine learning to identify high-potential employees with the skills and qualifications the company needs. Strikingly, 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 exhibit qualities such as introversion that find them being overlooked when undergoing traditional methods of assessment. 2. Using data to assess D&I climate, identify focus areas & quantify the success of initiatives. Among the challenges for implementing D&I initiatives are knowing where to begin, how to focus efforts and how to measure success. When seeking a buy-in from leadership for a diversity program, it is important that the HR department sets out a strategy for quantifying its ROI. To satisfy this, many companies are now turning to data-driven ways of assessing the D&I climate, focusing efforts and determining if an initiative was successful. Before implementing any D&I initiative, the company’s starting condition—its current D&I environment—should be diagnosed. D&I is a vast realm so narrowing down focus areas can help a company in implementing or improving practices. The diagnosis can help identify focus areas and drive diversity initiatives forward in a tailored way that will fill the company’s distinct gaps. To gather useful D&I data, some companies conduct regular employee engagement surveys, asking questions that focus on company culture and inclusion. From the onset, these surveys, especially when done consistently, can serve as a barometer of the company’s D&I culture since it is based on first-hand feedback directly from employees. It is also key to evaluate employee data, such as turnover rates, promotion and salary. Some sample metrics that can be used to assess D&I practices include for each employee: the velocity of mobility (which is the length of time it takes to hire, promote and move up within the company), pathways for employees, percentage of diverse employees with mentors, results of mentorship in terms of career progression and employee engagement. This data can help uncover systemic issues like a gender pay gap. Companies can also look across employee reviews online, such as on Glassdoor, or conduct a social media audit to detect if there is any evidence of bias. After all key areas for improvement have been identified, there must be organizational consensus on how to measure changes. Some companies rely on retention and attrition rates of different groups as an indicator for success. When implementing D&I training, it is helpful to perform employee surveys both prior and after to gauging the program’s success. Storing data from evaluations and all D&I initiatives can help measure changes along the way. The end goal of a more inclusive, diverse team is of course central to D&I but there should also be methods of measuring success along the journey. Each company is different and there will never be a one-size-fits-all approach to D&I but consistent data collection can help companies implement, modify and quantify their success. 3. Increased leadership accountability & support for D&I programs. Corporate leadership is recognizing that a solid D&I strategy is not merely a “nice-to-have” add-on carried out solely by the HR department but is instead a business imperative in today’s competitive landscape. Among the best practices for D&I implementation are executive buy-in and a strategic emphasis on D&I as a valued competitive advantage. Some companies are taking it a step further and modifying the structure of an organization’s leadership to enrich its approach to D&I. In a top down approach, some companies are making headway on D&I by creating an executive role in the form of a chief diversity and inclusion officer. The D&I executive can outline goals, establish targets, identify key improvement areas and then lead the organization through the steps of meeting goals. While this person interfaces with all areas of the organization in various capacities, the D&I’s department takes ownership and spearheads D&I initiatives. An employee-led grassroots approach forms a decentralized company-wide D&I council that draws on feedback directly from employees. While it still requires executive buy-in, the council’s reach is distributed through the entire workforce. The council appoints representatives from various departments or segments of a company and meets regularly to improve the company’s D&I culture as it pertains to recruitment, engagement and development. Some companies might opt for a hybrid approach to D&I leadership, which would involve appointing a D&I-specific executive and a D&I council. Instead of being solely led by employees, the D&I council is supported by the HR department and guided by representation from both the D&I executive and employees. Initiatives are cooperatively strategized and outlined by the D&I executive, HR and employees. The three groups agree upon how initiatives will be spearheaded and what role each group will play in their execution. 4. Interview standardization will continue & reduce bias. Inconsistent recruitment practices will yield inconsistent (or, even worse, illegal) hiring results and may also open floodgates for unconscious bias in hiring processes. For quality and compliance, HR should have policies in place that ensure the hiring process is standardized from the time they list the job all the way through to when the hired employee steps in the door (or signs online if they’re remote) for their first day of work. Establishing and implementing hiring best practices provides a company’s recruiters with control and guidance for hiring. This type of standardization enhances transparency, allows for a fair comparison of candidates and reduces the risk of violating applicable labor laws. It also helps promote a company’s E&D profile. Striving for behavioral interviewing methods is an ideal strategy because a person’s behavior is an indication of future performance, especially when it comes to soft skills. According to research from LinkedIn, 57% of HR professionals struggle to assess candidates’ soft skills while 80% report that soft skills are increasingly important to company success. This makes sense because soft skills are one area where automation and AI cannot fully compete with humans. Many companies want the initial introduction with a candidate to be as blind as possible. This might mean starting out with a phone interview, which will eliminate visually-based unconscious bias upfront. Some companies are taking it a step further to accomplish the “blind interview,” using voice modulation apps for technical interviews so the interviewer won’t know the candidate’s gender or be able to pick up on any accent that might distinguish background attributes of the candidate. Behavioral interviewing seeks to uncover how an individual will react in critical job situations and can potentially provide more insight about a candidate’s qualification for the job than what is written on their resume or what you hear when you ask a candidate about their professional background. These questions could start with, “What would you do in…” or, “Tell me about a time when you…” Using an example of a customer service representative interview, the interviewer might present prospective candidates with a hypothetical customer situation and have them explain their approach to addressing it. Asking the typical behavioral interviewing questions reduces the risk of legal or ethical pitfalls in the interview questions. Formally planning and asking all candidates the same questions saves time and prevents duplicate questions from being asked by multiple interviewers (unless intentionally done, so as to confirm consistency in the candidate’s response). This brings up another key point of having multiple people interview each candidate when possible. Engaging multiple interviewers can help overcome unconscious bias in interviews and offer a wider perspective for determining a candidate’s standing. However, even behavioral interview questions can be answered untruthfully by candidates. Pre-employment assessments can validate or negate the data derived from an interview. There are many options available to companies for hiring assessment tools that quantify and use objective, impartial data to evaluate candidates. Results from pre-employment assessments can provide an accurate snapshot of a candidate's strengths and weaknesses. The results can even be input to create hiring benchmarks that candidates can be compared to. 5. Diversity & inclusion will be embraced across products & services for customers. D&I has gone mainstream. In the age of customer-centricity, there is mounting pressure on companies across industries to launch inclusive products and solutions that meet the needs of all customers. The 2019 World Economic Forum Annual Meeting identified ‘empathy for the end-user’ as a key competitive advantage for succeeding in the digital age. In the age of digital transformation, companies will have to become more accessible to wider customer bases—and invoke messages and values that resonate with audiences across cultural and geographic boundaries. According to LinkedIn, nearly half of employers said that they emphasize the importance of diversity to better represent their customers. This number is likely to grow as customers, who are increasingly accustomed to personalized products and services, will expect D&I to be embedded in the customer experience. Meanwhile, 70% of millennials are more likely to choose one brand over another brand if that brand demonstrates D&I in terms of its promotions and offers. As an industry that has been spearheading corporate D&I efforts for years, HR has deep expertise and can play a prominent role in leading the customer experience transformation. As companies look to amplify their market-relevance, HR departments will be charged with strategically staffing companies in ways that enrich the D&I profile and foster greater connections with customers. The moral case for building fairer and more inclusive workplaces is clear: people matter and organizations have an ethical and legal obligation to ensure their people management strategies do not disadvantage any groups. But equally important, D&I has evolved from being an HR-led initiative to being one that is reverberated to all corners of a company as a key business strategy. As global unemployment reaches its lowest point in 40 years and we enter an employment economy, the hiring landscape is only becoming more competitive. In this landscape, D&I is fast becoming one of the most powerful tools a business has. By keeping pace, HR can help companies leverage D&I to reimagine people management and elevate brand-loyalty among employees, customers and investors.
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.
Digital transformation is here and it is affecting companies in various degrees. Learn what it is and why it is important. Digital transformation is generating some of the most impactful improvements to the customer experience, with two-thirds of global CEOs reporting they will adopt a digital-first focus by the end of 2019. But the trend is transcending beyond the customer experience to also steer the employee experience. A company’s employees—all digital consumers in their personal live—are also expecting to leverage digital experiences to enhance performance and gain professional development. The human resources industry—no longer viewed as just a support function for employee services and benefits—has stepped up to the front lines to greet the digital transformation that is disrupting how organizations worldwide operate and thrive. The HR department, in addition to talent management, is now expected to lead a company’s digital transformation journey and deploy effective change management strategies. For an organization to succeed in implementing new technology, they must find ways to embed digital transformation—and the innovative mindset it requires—into their company culture or they risk falling behind the competition. What is digital transformation? Emerging technology is often the main focus of the digital disruption conversation. Through transformation programs, HR teams are helping companies enter the digital age and transition from using legacy technology to embracing new technologies, such as machine learning, the internet of things (IoT), blockchain, artificial intelligence (AI), big data, data analytics, cloud computing, a multitude of mobile devices, smartphone integration, social media, and more. But digital transformation is actually guided by innovative approaches, people and business processes—not just the technology itself. Digital transformation cannot be defined by a single transformation project nor a single technology. The technology is constantly changing and updating itself. The only fixed element of digital transformation is the innovative mindset that drives it. With this mindset in place, HR teams can identify faulty processes and user challenges—and subsequently determine what technologies should be infused as solutions. The end goal is to better understand, engage, satisfy and deliver on the user’s expectations for a multi-channel experience. Why is digital transformation important? Adopting a digitally driven business model with next-generation capabilities isn’t just critical to beating competitors—it’s an imperative for surviving in today’s competitive corporate environment. Business leaders are focused on results, innovation and continuous improvement. To this end, they must constantly challenge their organizations to ensure that new technologies and processes are being implemented to push productivity gains and offer significant competitive advantage—all while delivering exceptional user experience for a multitude of stakeholders. For HR teams, digital business transformation is the ultimate challenge in change management because it affects all levels of an organization (every process, department and stakeholder) and even extends to its supply chain or network of partners, in some cases. But this omnipresent disruption is what makes digital transformation so critical for organizations. Digital transformation is helping companies make transitions to new business models. An external example would be a longstanding retail store that is struggling to attract millennial customers who prefer to shop online. This business can leverage digital technology to optimize its website for e-commerce, set up responsive customer service capabilities online, collect location data and gain insights into customer expectations and behaviors (to drive both online and in-store interactions). But more importantly, digitalization is impacting internal operations to help companies deliver the digital experience from the inside out, starting with employees. For the HR industry, harnessing the digital experience is critical for sustainable talent recruitment, retention and training. HR professionals are using technology to continuously transform how they design and deliver the employee experience—anytime and anywhere. They are combining the human element with the power of technology to gain insights and adapt processes that add new value. Important elements of successful digital transformation Although the roadmap for digital transformation varies based on organizations’ specific challenges and demands, there are a few common attributes that a digital strategy should incorporate: 1. Integrates digital technology to optimize process efficiency. As with any HR change, whether digital or not, there should be a clearly defined objective that makes a process more efficient. Most of the time for the HR department, this goal will be to solve an issue employees encounter or one that the HR department faces in its talent management. It is recommended that companies start simple and small and consider the areas of the HR process that might benefit from a digital makeover. This could include recruitment, onboarding, learning & development, payroll management, benefits administration, performance reviews, etc. 2. Improves user experience. Digital transformation aims to solve problems and ease pain points for the end user and, when it comes to HR service delivery, the end user is the employee. Business leaders and employees are accustomed to being digital consumers and they—just like customers, clients and partners—expect a digital experience relationship with the company. Technology plays a critical role in the relationship that millennials have with their employer, including how long they stay at a company, how productive they are and how they contribute to company growth. The increasing importance of technology implementation—especially its implications for longevity and productivity—is narrowing the focus of HR departments across all industries on creating end-to-end consumer-grade experiences for employees. 3. Modernizes company culture. Digital leaders focus on vision, management, agility and empathy for the end-user. Digital transformation is therefore more about company culture than it is about installing one particular type of technology or improving a single process. Transformation efforts can only succeed when company culture inspires innovation and creativity in its human capital, inspiring workers to adopt new processes, ways of working and approaches to breaking down silos and relating to stakeholders in more meaningful ways. Company culture also plays a critical role in attracting millennial talent and improving employee engagement in the digital age. The dynamic qualities of digital culture are different than, and often in conflict with, analog culture at traditional companies. Where analog culture is defensive, digital culture aims to be proactive. For processes that analog companies choose to complete in-house, the digital company seeks out a network of expertise. Analog companies report on past performance while digital companies gain real-time insights for decision-making. 4. Reduces traditional expenditures. Cost savings is a primary driver of digital transformation, according to data from the Cloud Industry Forum. But digital transformation demands that companies cut costs with a purpose, namely to drive innovation and enhance competitive capabilities. An example of this would be implementing cloud platforms, which can accelerate digitization for numerous processes within a business. In addition to greater speed and agility, this innovation also offers lower costs in the long term. Though digitalization should be imagined as a revenue generator rather than a cost reduction function, companies should be cautioned against using cost savings as the only justification for transformation initiatives. This narrow focus can end up limiting the scope and impact of process improvements and present long term ramifications. 5. Researches, strategizes & sets goals based on evolving tech/digital landscapes. The digital landscape is constantly in flux and companies need to strategize to adapt. The digital transformation process can be especially painful for well established companies. Some large brands have disappeared or are currently struggling to stay relevant in the digital age. It is important for companies to develop a formal organizational digital business strategy that involves research and goal setting. Yet just one-third of companies have this in place. As a working document, the plan should be updated in response to the evolving landscape. Regular analysis of current digital infrastructure can assess current challenges and anticipate future needs. A sound digital strategy, based on in-depth analysis, can help a company anticipate possible risks, formulate budgeting needs and better deliver desired results. Why companies put off digital transformations Human life is a constant conflict between progress and inertia. Change is often difficult, whether in our personal or professional lives. For most people, especially managers and leaders, changes within a company can feel like chaos is wreaking havoc on their once predictable workplace. This is part of why it is called the digital disruption. In order to transform a company, the points of contention that make companies resist digitalization must be addressed: 1. Requires a system-wide overhaul. It can be easy to fall into the trap of believing that digitalization needs to be implemented immediately and everywhere throughout business operations. That task can appear quite daunting, with some leaders choosing to put it off altogether. While it is safe to say that digitalization will eventually require a system-wide overhaul in the way most companies operate, processes and projects can be digitalized and changed incrementally. The main point is that companies overhaul their long term vision for how they plan to adapt and innovate in the digital age. 2. CIO/CEO need to believe in it. As a company prepares to digitalize, it is often the case that employees embrace the change while management and leadership are resistant. For this reason, it can again be said that digital transformation isn’t just about technology—it’s also a leadership issue. Change-agile leaders have a clear purpose and can readily answer the question of “why” a technology is being adopted. They know they’re not just adding technology to add technology. It’s being implemented to maintain a strong competitive advantage, enhance productivity on a specific process and push the company toward innovation. These leaders are also willing to fix what’s broken and, in the process, take risks that may require some experimentation. Another key leadership trait, especially in the context of digitalization, is the ability to forge positive partnerships that help streamline the transition and avoid common pitfalls. 3. Upfront costs are high. Very often, leadership poses two questions when confronted with digital transformation: Will digital transformation require new spend that is not currently accounted for? Do I need a specific budget for it? The answer to both of these questions is a resounding “Yes.” However, as previously stated, this can be implemented incrementally across the organization. Many companies are finding benefit transitioning digitalization from a capital expense model to an operating expense model. The goal for digital transformation, when implemented strategically, is to yield enough cost savings that it becomes a self-funding mechanism. But how much are companies spending? Expenditures for digitalization are growing worldwide at compound annual growth rate of 16.7% and by 2020 it is expected that 30% of G2000 companies will have allocated capital budgets equal to at least 10% of revenue to fuel their digital strategies. 4. The company needs specific technology for their industry or feels comfortable with the status quo. Every industry is being confronted by digital disruption in some capacity. But how it plays out and the degree of impact it has on a company will vary widely depending on the specific sector and the market space in which the company operates. The pace of disruption is chamges by industry. Digitalization can be a challenge within certain industries as some companies require highly specific technology or processes for the work they do. Many times, this specialized technology is too expensive or hasn’t even been commercialized yet. Another case of resistance to digitalization comes from businesses who feel comfortable with the status quo. If a brick-and-mortar shop feels it is doing well, it won’t likely seek an online platform to conduct e-commerce. There may be a tendency for companies with specific industry challenges or comfort in the status quo to put off digitalization efforts. But it can be argued that these companies especially need to be outlining a digital strategy. The speed of disruption is increasing and disruption is likely to touch businesses in every industry and all sizes. The winners will be companies that combine traditional industry expertise with a deep understanding of how digital innovations could potentially disrupt their business. Tips to get your digital transformation strategy started Digital technology has the potential to transform HR and talent management as we know it. But it won’t come without backing from leadership and staff. Before a concrete strategy can be developed and executed, there are a few first steps an organization and its HR department can take to prepare: 1. Get buy-in from C-level leaders. Having the support and understanding of executive leadership is critical for digital strategy. Digitalization, just as it impacts all roles in management and staff, can also impact the C-suite. The new COO must revamp operational processes and align front and back-office staff with the CMO’s strategy for consistent digital engagement. Meanwhile, the new CMO becomes data driven and omnichannel in approach. To fully compete in the digital revolution, some companies are even adopting a holistic model where a new chief digital officer is appointed to serve as a key enabler of transformation. 2. Identify pathfinder projects. In order to build momentum for digital strategy, it can be helpful to identify some pathfinder projects to kickstart a company’s digital transformation journey and help pioneer the transition. What HR processes are currently presenting challenges for the department? Or more importantly, what processes can be improved for candidates, employees and leadership? Some applied examples of digital transformation technology within the HR space are augmented writing technology for job postings to better focus the search, chatbots to handle commonly asked questions from employees, AI-driven insights to guide the sales team on demographic trends, machine learning training customized for a team member or nudge-based technology for managers to complete performance reviews by deadline. 3. Communicate early and often with everyone in the organization. Effective communications will play a key role in launching a digital strategy and creating the innovative mindset that fuels it. The strategy should have a timeline that incorporates a communication strategy with all team members on the status. Before any specific initiatives are outlined and put into action, an ample amount of time and effort should go into talking with executive leadership, management and staff. These critical stakeholders should be active participants in the strategy. Ask each employee about the challenges they face and their experiences with already laid out processes. Sometimes this is done in survey format so that insights and data can be gathered to help guide the strategy. 4. Hire people that embrace new technology and processes. As a result of the digital age, the workforce is shifting from fixed job titles and detailed job descriptions to ever-revolving roles. A widening skills gap is also a residual effect of the digital revolution, posing an imminent threat to organizations that don’t hire people open to learning new technology and processes. At the current pace of technology growth, it is likely that many of the technical skills a company’s workforce boasts today will become obsolete within a few short years. Hiring for today’s skills is not enough. Digital companies instead need to focus on upskilling and recruiting lifelong learners who have the ability to constantly learn new skills and navigate technology that might not even yet exist. Rather than seeking industry-specific skills, organizations are shifting toward “technology application within the industry” skills. Other core work-related skills include complex problem solving, active learning and cognitive flexibility. Curiosity, creativity and collaboration are key soft skills that are becoming increasingly valued by companies as they look to foster a high-commitment culture with strong employee engagement. To show how systemic the transition can be, many companies are now deploying digital technologies, like virtual reality (VR) simulations or gaming tools, in the interview process to help gauge skills that can’t always be verified on a resume or in a traditional interview setting. This allows recruiters to observe how a candidate handles unfamiliar situations in real-time or how well they absorb new information to troubleshoot problems. Conclusion A company’s transition from analog to digital requires a systemic overhaul of business operations, renewed company ethos and an influx of critical human capital to power it all. After all, technology itself does not drive success. Albeit important, the tool is merely an enabler of the innovative vision. Effectively integrating new digital technology requires the right people in the right positions, which is why the HR department has been appointed to lead digital transformation strategy for many companies. As the voice for human capital amid an evolving workforce, HR can lay the foundation for digital strategy by cultivating the necessary elements for digital transformation. Customer experience has received much of the attention in the digital revolution. However, HR galvanizes the transition by empowering employees so a company can offer a digital experience from the inside out. This lights a company’s path toward becoming an intelligent enterprise— one that is continuously innovating, delivering, superior user experiences, creating new business models and reimagining processes to drive even more value.
There is a significant opportunity for blockchain to establish itself in human resources. Learn about HR blockchain use cases. Blockchain technology is perhaps best known for its role in safeguarding the cryptocurrency infrastructure (e.g. Bitcoin), making financial transactions secure without the need for a bank or a middleman. But the technology is eyeing a landing in the human resources space, which will inevitably change the way that HR professionals handle large amounts of sensitive employee data and deploy various HR processes. As blockchain technology becomes more mainstream and accessible, all members of the HR department—from recruiters to the senior leadership—will likely find it disrupting their daily workflows, including the recruitment process, 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. It can even simplify cross-border payments by automating real-time exchange rates and other jurisdiction parameters, which hold implications for businesses that hire and operate globally. One of the first challenges HR professionals face is understanding the fundamentals of what blockchain is and how it functions. Simply put, a blockchain is a distributed digital public ledger used to keep track of records. The term block is simply another word for record. A blockchain, at its core, is simply a chain of records. Blockchain is special and distinct from other recordkeeping systems because it relies on a distributed ledger, meaning the chain of records is subsequently stored across a large network of independent computers. This decentralizes and encrypts the data, making it safe and secure. The high level of security makes blockchain technology a good match for the HR industry, which is often charged with managing large amounts of sensitive data about a company and its employees. Despite all the ways blockchain technology could potentially disrupt human resource management, HR teams need not panic. There is still some time to prepare for the coming blockchain revolution—and the technology has a strong track record of success in the industries it has touched so far. 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. While just 0.5% of the global population is currently using blockchain technology, the demand is rising and it is expected that 80% of the population will be involved with blockchain technology in some capacity within 10 years. For HR teams, the mainstream adoption of blockchain could unlock value and benefit for employers and employees alike, starting with the ability of hiring managers to put the right people in the jobs. To show how it could work on both sides of the employer relationship, blockchain can enable individuals to maintain, secure and offer controlled access to a comprehensive blockchain-driven digital ID that includes critical information about them to employers. This could include education, skills, training and professional performance. Through this digital ID, individuals would be able to turn their credentials into real value in the employment market while employers are able to identify the right employees more accurately and effectively through data-driven insights. If its success in banking and supply chain is any indication, blockchain is poised to innovate the ways we manage human capital in many different capacities. Now is the time that the industry is piloting and envisioning various use cases. Examples of use cases for blockchain HR Blockchain is disrupting many of the industries that HR departments work alongside with in order to manage human capital. For example, aside from blockchain’s prevalence in the banking industry, Forbes has identified the healthcare industry as one of the top industries likely to be disrupted. According to Bitfortune, 55% of healthcare applications will adopt blockchain for commercial deployment by 2025. HR departments will therefore need to be on the forefront of the evolving healthcare landscape—including the implementation of blockchain—so they can continue to be an authority on delivering healthcare plans and wellness programs to employees. But the use of blockchain will be more than just a concept HR professionals need to be aware of for partnership purposes. Because the HR department is the keeper of so much of the data that is critical to employees’ lives and how a company operates, blockchain technology will be integrated directly into the HR function through a multitude of use cases—lending transparency and trust. 1. Strengthen security for sensitive personal & financial data. HR teams are tasked with conducting some of the highest-volume financial transactions for an organization as well as handling sensitive employee data related to pay, healthcare, finance, banking, disciplinary records, performance records, expense reimbursement, and more. All of the data an HR department maintains is at risk of being exploited and, as more companies face data breaches, it is of utmost importance that safeguards are in place to prevent fraud and maintain security. In the face of rising cybersecurity crime, blockchain technology is being lauded as a solution. Blockchain’s role as a game-changer for human resources is defined by its security capabilities. In fact, blockchain has proven itself to be so effective for risk management and software security that even aerospace and defense giant Lockheed Martin is using it. Implementing blockchain can help thwart both internal fraud and external hacks of sensitive employee records. Access to the blockchain is limited and controlled and even those with access can’t arbitrarily make changes to the record. This limits both internal fraud and external hacks of sensitive employee records. With the rise of the Internet of Things (IoT) in HR, there is growing concern as hackers often get in the door by strategically exploiting weaknesses in edge devices. The vigilance applied to computers is often neglected when ensuring the security of IoT devices, leaving organizations vulnerable to hacks. Blockchain offers strong protections against data tampering by locking access to IoT devices and shutting down compromised devices within the IoT network if a security event is suspected. Blockchain serves to effectively decentralize data as a key defense against hacks and fraud. Data is part of a company’s currency in the digital age. It is fast becoming one of the most prized assets a company has. If you store all your jewelry, cash and other valuables in one location of your home, what happens if a burglar enters your home and finds this location? Because blockchain spreads data across a large network of computer storage spaces, it is like placing your most valuable belongings across a multitude of locations to mitigate your risk of being severely impacted or wiped out by a single hacking event. 2. Improve recruiting processes, verification of job qualifications & background checks. Whether we call it lying, embellishing or stretching the truth about work history, we know that sometimes what you see on a candidate’s CV is not always what you’re getting. A reported 75% of HR managers have identified a lie on a CV. With nearly 20% of hiring managers also reporting they spend less than 30 seconds looking at a CV, it is impossible to know how many fabrications actually go undetected. Perhaps the greatest advantage that blockchain can offer is trust in the veracity of its data. In current recruitment systems, it is difficult to determine the accuracy of a potential employee’s work and education history. Even the most seasoned recruiters can be deceived by a candidate’s falsified employment history and education credentials. Traditionally HR managers have relied on CVs, which applicants can modify and embellish. While LinkedIn and reference calls can be used to verify some information, these methods only provide a thin layer of verification. Additionally, these analog processes can also be time consuming and a hassle. As many HR professionals can confirm, conducting a traditional background check can be slow and expensive. It can also place a burden on candidates, requiring numerous forms to be filled out. Blockchain can reduce the labor and expense currently associated with background checking. Although blockchain cannot guarantee all inaccuracies or exaggerations will be detected, it can effectively reduce incidents. It also provides employers with the most accurate snapshot of a candidate’s credentials and background. The benefit of blockchain is also passed on to candidates in the form of confidence, allowing them to apply to roles that they know they are qualified for. It also mitigates the concern that other candidates might be getting ahead of them by applying to the same job with fraudulent resumes and qualifications. This transparency levels the playing field for all candidates 3. Streamline payroll, contractor payments & vendor tracking. One of the most common use cases for blockchain HR involves a company’s largest expense and the process that employees appreciate the most: payroll. Blockchain has the power to replace many of the manual tasks and eliminate time lags within current payroll systems. Blockchain also offers ‘smart contract’ solutions that allow a company to automate and secure payments to contractors and vendors. Global companies in particular could enjoy benefits with blockchain when it comes to issuing cross-border payroll to employees in overseas jurisdictions. Blockchain automatically sifts through exchange rates and communicates with intermediary banks so employees can be paid quickly—and at a lower cost to employers in the long term. Through smart contracts, some organizations are using blockchain to pay out 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 writes out in code a set of parameters using statements in ‘if this, then that” (IFTTT) language. These contracts can be designed so that, once put in motion, the payment process is made entirely dependent on these codes. It is also made irreversible unless of course terms of a contract need to be updated. When a certain number of hours of work have been completed (this would be a potential ‘if this’ variable), the smart contract automatically pays the employee, contractor or vendor the correct payment (a ‘then that’ variable) by deploying the ascribed piece of remotely executable code. This code is linked to an instruction from the company’s bank account to the contractor’s bank account, which ultimately facilitates the payment. HR would not need to contact their company’s bank or do a monthly payment run. Instead, the transparent, real-time blockchain ledgers help track invoices and facilitate distribution, billing and reporting of transactions. There is also no need to wait for the usual payroll processing time. The smart contract functions as a guarantee that work is completed and that the payment will make it to the employee, contractor or vendor properly and in a timely fashion. 4. Automate taxes & mitigate the strain of audits. Taxation plays a critical role in the life of a business or an individual. For HR professionals, constantly evolving tax laws and regulations across jurisdictions ensure they often have their hands full properly issuing taxes. Payroll taxes are then only further complicated by other factors like bonuses, commissions, overtime pay, back pay, accumulated sick time pay, human resources expenses, and beyond. Blockchain’s keen ability to record and update employee tax considerations and provisions automatically is catching the attention of the HR industry. By wielding the capability to streamline and secure the taxation process, it is likely that blockchain-powered platforms will become the record of choice for HR departments around the globe. Speaking of taxes, no business wants to be hit with an audit but it does happen. Audits are so daunting that it has actually held back countless businesses that only feel comfortable maintaining physical record systems, despite the time, energy and money they require to properly upkeep. If presented with an audit, having blockchain technology already in place is like having a life preserver thrown out to you while you’re struggling to stay afloat in choppy waters. The blockchain makes it easier for a business to sustain an audit because it can securely share its records with regulators in near real-time. The time and cost spent for document collection is subsequently reduced drastically. Furthermore, the blockchain’s cryptographic hashes and source verification build a strong barrier against document manipulation and fraud. 5. Enhance employee experience with better access to benefit packages & a dynamic expense reimbursement system. HR and employees alike will appreciate blockchain’s ability to expedite access to benefits packages. Once employers outline the terms of employment prior to hiring, it is HR’s responsibility to uphold the conditions in the contract. The traditional model requires manual implementation of provisions that might impact an employee’s benefits package, running risks of errors or preventing proper delivery of benefits. Inputting these terms into blockchain technology instead allows HR to seamlessly deliver upon these benefits. For example, if a company outlines that an employee’s healthcare benefits are due to kick in after a 90 day waiting period, the blockchain technology can be engineered to implement those benefits at the right time. Again, this is coded through the same IFTTT language that governs smart contracts. Apart from healthcare benefits, Blockchain can potentially offer a more robust approach to pay scales by applying defined salary increases for identified skills or key capabilities that are deemed valuable to the company. They can also administer performance-based bonus awards to employees in a more measurable, data-driven way. Blockchain expands on the employee experience even in the realm of expense reimbursement. In its current format, reimbursing employees can be nebulous and time consuming. For employees, they are often forced to wait for paperwork to go through and checks to clear. For HR, it can also create pain points and expend time and energy. Blockchain is disrupting the expense reimbursement scene by allowing organizations to create their own company currency. In developing an individualized cryptocurrency unique to their company, organizations will reduce expenditures associated with the current expense reimbursement process: elimination of processing fees, accounting for international exchange rates, reducing in-house HR staff, etc. This also appeals to both parties in the transaction and provides corporate mobility, with businesses now having the ability to easily reimburse between various jurisdictions. With current reimbursement system, there is an ongoing conflict between employer and employee about what should be compensated, what should not, how, when, etc. Blockchain-led solutions ensure transparency, with all company-funded transactions linked into the blockchain network. Though initially cultivated in the cryptocurrency industry, blockchain is branching out into the world of work. There are many potential uses for blockchain technology, which could disrupt hiring, payroll, taxation, benefits administration, data storage, and so much more. Despite current challenges in cost and scalability, the case for blockchain HR is strong. Promoting transparency and trust in company processes are two priorities for HR professionals as they manage human capital and face a competitive hiring landscape. While the technical performance of blockchain technology and its ability to encrypt and offer laser sharp accuracy are hardly up for debate, blockchain’s success will ultimately depend on how well it is able to infuse trust and transparency into an organization’s operations.
Learn about fascinating HR trends that are emerging in the human resources space in 2019 and beyond. We live in the age of disruption, guided by emerging technologies, public policy developments and shifting cultural values. While every industry, job and organization races to keep pace with rapid changes, the human resources industry is on the front line of responding to movements in how we live and work. HR professionals, armed by new technology amid a deluge of innovation, are charged with implementing solutions across all phases of talent management while also agilely accommodating the evolving expectations of employees and job seekers. According to Mercer’s Global Talent Trends 2019 report, a staggering 73% of HR leaders predict significant industry disruption in the next three years—up from just 26% in 2018. For example, more than half of the HR departments surveyed believe that artificial intelligence automation (AI) will replace one in five of their organization’s current jobs. However, AI and automation will also create 58 million net new jobs by 2022, according to estimates from the World Economic Forum, which will keep recruiters and hiring managers busy for years to come. The unprecedented restructuring of the workplace—powered by smart technology—presents boundless opportunities for the HR industry, well into the future. But the shifting workplace and a widening skills gap also demand that a company’s HR team aptly respond to emerging trends to stay ahead of the curve. Organizations that fail to implement new workforce strategies will fall behind the competition when it comes to talent management and meeting human capital needs. The following HR trends are impacting companies of all sizes across various industries and represent tremendous opportunities for HR leaders to adapt, plan and strategize for the future of work: 1. Organizations are increasing their employee engagement spending to create experiential workplaces. Employee engagement—the level of emotional connection, involvement and commitment that an employee has with their organization—is a critical tool for maintaining a healthy bottom line. Dedication and enthusiasm grow when employees feel valued and empowered in the workplace. In turn, employee engagement also increases employee retention, enhances performance and maximizes productivity. Companies suffer when employee engagement is low and unfortunately many companies currently suffer from poor engagement. As Gallup reports, only 13% of over 31 million respondents worldwide are truly engaged at work. HR professionals are observing the problem with 43% reporting low or declining employee engagement as a top concern for their organization, according to Mercer’s Global Talent Trends 2019 report. It is expected that organizations will respond to these concerns by ramping up efforts to boost employee engagement. More specifically, these efforts will be aimed at redesigning the employee experience. Organizations will strive to create a company culture that people want to contribute to and be an integral part of each workday—not just a place where they report to so they can receive a paycheck. Some examples of this effort might include regular pulse surveys and transparency reports, employee-centric events, experiential onboarding programs, rewards programs, thank you cards, employee-led teaching sessions, wellness programs, social media campaigns, personal coaching, and stay interviews to retain top talent. The added investment in employee engagement will likely pay off for companies, as experiential organizations have more than four times the average profit and more than two times the average revenue. 2. Organizations are leveraging artificial intelligence (AI) technology to eliminate unconscious bias. While many companies want to remove unconscious bias from the hiring process, it proves to be difficult because these predispositions operate automatically and act without our awareness. Furthermore, there are far too many biases to manually remove them from our decision-making processes. Unconscious bias is an ingrained human trait and some experts therefore suggest that the best way to overcome biases is via non-human solutions. 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. AI for human resource systems can be also programmed to automatically disregard a candidate’s demographic information, such as gender, race, and age. It can take a step beyond protecting the basic demographic information and also ignore other details that may indicate racial or socioeconomic status, such as school names and zip codes. AI offers the opportunity for human resource professionals to cross-check results with the processes in place, identifying where unconscious bias may exist. Unlike traditional methods, the results of AI can be tested and validated by creating a profile based on actual credentials of successful employees, providing hard data that either validates or disputes beliefs about what qualifications to search for in candidates. 3. More companies will use virtual reality-based sexual harassment training. Though training programs are widely in place to address sexual harassment, it still remains a pervasive problem in the workplace. Historically, sexual harassment has been viewed by companies through a legal and risk mitigation lens. With many companies still drawing from content that focuses on how to avoid litigation, they are not being prescribed actual strategies to prevent harassment in the first place. But some companies are now employing virtual reality (VR) programs to prevent workplace incidents, placing employees directly in training scenarios that unfold depending on how the user reacts. By mimicking conversations, VR-based programs invoke a deeper sense of empathy and make employees more acutely aware of social cues beyond just what they’re saying to another employee—such as eye contact, body language and personal space. VR is an effective sexual harassment prevention tool—more so than the traditional videos, presentations or handouts—because it allows employees to learn under the same conditions they would be in if the situation were to actually occur in the workplace. As more personal stories of harassment are shared and society takes measures to address the epidemic of sexual harassment in the workplace, it is likely that more companies will update their approach and adopt immersive VR-based programs. 4. Companies are implementing remote-friendly work arrangements that enhance engagement. To compete with the gig economy and respond to demands for work-life balance, more employers are taking a cue from startups to offer flexible work arrangements, including flextime and telecommuting options. As coworking spaces grow in popularity and millennials and Gen Z become more prominent in the workplace, organizations are pushed to recognize the value of hiring remote workers. Flextime arrangements are also seen as a means of accommodating rising demand for work-life balance. It is clear that the demand for flexible working is increasing year on year. Worker demand for remote working capability has reached 75%, up from 70% in 2017. The benefits of a remote workforce go beyond just higher employee satisfaction and well-being though. It has been found that remote workers can be more productive, healthier and help companies reduce costs. Furthermore, it allows companies to draw from a larger pool of prospective employees to attract the world’s best talent. Upcoming trends in remote work will find companies addressing some of the engagement and IT challenges that arise when your employees are logging in from locations around the globe. Companies will explore specialized technology regulations, onboarding, training, engagement, wellness initiatives, and events aimed at engaging the remote workforce. 5. Learning and development (L&D) is becoming more personalized. The golden age of choice, flexibility and control is upon us. As consumers, we are accustomed to enjoying personalized experiences based on our unique needs. For example, we can customize our news feeds to show us the updates and specific topics we want to see. Netflix recommends programming we may be interested in, based on our previous activity. Historically, HR practices have focused on standardizing L&D for a company, offering “one-size-fits-all” solutions that put the company’s needs as the starting point. But, going hand in hand with the need for higher employee engagement, the traditional approaches to L&D are no longer cutting it in the new workplace. The expectations for training programs have advanced from simple content tutorials to adaptive machine learning experiences that are tailored to the unique needs, levels, functions, preferences, and interests of each individual employee. Companies that adopt personalized L&D tools will save money in the long run, turn out more productive employees and make processes more effective. This is because personalization detects behavior patterns and reveals correlations in such behavior among employees. As similarities and parts start to be identified, employees can then be segmented accordingly. Through this segmentation, HR leaders are able to effectively deliver relevant L&D content that meets the individual needs and goals of each team member. 6. Companies are using people analytics to improve processes. For years, people analytics was considered just a small part of the HR function. But companies today are using people analytics as a critical business instrument that can be applied at every level of an organization, ranging from the recruiting process all the way to talent management. When it comes to performance management, people analytics helps remove the human bias that often comes with evaluations. It also allows for an evaluation of both the process and outcome, which can help HR teams separate variables (such as luck) from real skill. Overall, people analytics can help paint a more clear, structured and honest picture of an organization’s performance. When it comes to staffing, 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. It can also facilitate collaboration within an organization, providing insights about how well certain people and groups work together. As staffing, collaboration and performance processes are improved, people analytics can then be leveraged to help the HR team uncover employee behavior patterns, track employee development within the company and monitor employee engagement. 7. The employer brand is becoming a critical recruitment and retention tool. In today’s competitive hiring landscape, the HR department is being tasked with marketing the company to recruits and employees. People are increasingly wanting to work for a company whose values align with their own. In an international Glassdoor study, 77% of workers said they would consider a company's culture before applying and millennials reported that they care more about work culture than salary. Meanwhile, applicants and employees also have access to more information than ever before. For example, numerous websites allow for employees to write about the company culture and social media can allow for partners and customers to share experiences. The employer brand is therefore becoming an important tool for HR, often deciding if an applicant will say yes to a job offer or whether a current employee will stay long term. Applicants are coming to interviews not just aware of an employer’s advertising campaigns and brand communications. They also readily read up on the company’s charitable giving and the way it treats employees. Meanwhile, current employees are more conscious of the company’s corporate social responsibility activities and the way it treats partners and contractors. If values don’t align, a company could miss out on prospective talent and lose valuable employees. 8. Robotics and autonomous (HR technology) agents are saving valuable time. Within the realm of AI, many companies are incorporating chatbots and apps into their HR systems. This can provide immediate and consistent answers to common questions related to holiday leave, compensation, benefits, company policies and legal rights. As self-service platforms, the bots and apps 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. 9. Nudge-based technologies are facilitating work flow. HR technology is being implemented to suggest behaviors for employees and 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. Technology can also analyze data from e-mail, calendars and internal collaboration systems to measure a manager’s productivity and provide suggestions for how they might be able to improve their team’s performance. It can also let them know how much time they spent with each of their direct reports or how many emails were exchanged ahead of a project. Nudge-based technologies can also be used in lieu of repetitive communication from the HR department. For example, automatic reminders can be sent to managers to fill out performance evaluations. 10. The skills gap can only be closed by hiring lifelong learners and offering constant reskilling. Gone are the days of vertical careers, fixed titles and detailed job descriptions. The workforce is shifting from fixed job titles and detailed job descriptions to ever-revolving roles. It doesn’t matter how talented or motivated new hires fresh out of university are—nor what stellar technology training they’ve received. At the current pace of technology growth, chances are that many of these technical skills will be obsolete within a few short years. It is therefore no longer enough to hire for the skills in demand today. Companies need to focus on hiring lifelong learners who have the ability to constantly learn new skills and navigate technology that might not even yet exist. This often requires a deeper assessment of a candidate’s soft skills and personality, not just their past history. To help delve into these traits—which do not often appear on a candidate’s resume—some organizations are implementing virtual reality, automated simulations and gaming tools in their recruiting. These HR technologies can help them observe how a candidate handles unfamiliar situations in real-time and how effectively they absorb new information to troubleshoot nebulous problems. Because many of the skills of tomorrow don’t even exist yet, employers won’t be able to always adequately recruit for them. Some companies are looking inward to develop these skills within their current workforce, providing current employees with constant access to training and offering them meaningful incentives to continuously reskill. While technology demands new skills and experiences from workers, the hiring landscape is also becoming more competitive for employers. These compound trends can make it difficult for HR teams to keep up with hiring needs. Instead of constantly hiring for new skills and restructuring staff, HR departments can help fill the widening skills by ensuring that lifelong learning becomes an embedded part of company culture. The future of HR innovation presents both challenges and opportunities for companies around the globe as they compete for top talent. While new HR technology trends and evolving values are disrupting talent management and profoundly changing how companies operate, the workforce is still people-centered. As companies look to adopt new workforce strategies, the successful ones will look at these bourgeoning trends through the lens of the human experience to identify what will best inspire and innovate.