Given the state of existing systems, HR teams still struggle to make educated decisions quickly. They lack real-time analytics on employee performance, industry benchmarks, engagement, etc. When businesses fail to make better decisions, they are bound to fail. Data is desirable at all levels as it helps in deliberating on the business’ next move. Most of the time leaders complain about the overall process of decision-making being complex and erratic. This explains why the majority of big corporations spend an enormous amount of money in hiring third-party management consulting firms for strategic advice and implementation. Even with these measures in place, the decision making is still prone to error given the fragmentation of the process.
People Matters spoke to Pranav Jyoti, Global Head of HR Operations on why blockchain and it’s ideology is the next big thing in HR and how VLCC deployed the thought to make right and timely decisions.
Pranav shares, Human Resources across the world, especially Southeast Asia is sitting on the goldmine of data. HR in any organization that is number driven has access to data concerning-recruitment, training, absenteeism, productivity, candidate fraud, employee satisfaction. One of the key historic data vaults has been the payroll data itself. Data is the biggest asset which can drive talent management and help you plan your next strategy. And he believes that blockchain will revolutionize the way organization not only manage business but talent.
Alex Tapscott and Don Tapscott, may have said it best when they said, “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Originally, blockchain is the decentralized ledger behind the digital currency bitcoin. The decentralized system allows the network to operate on a peer-to-peer basis and hence keeping it transparent and error-free. Pranav shares that blockchain decentralizing or distributing and decentralizing decision making that there is no chance of ambiguity. The blockchain is a code to getting together, being fair, and building a strong decision-making factory.
Implementation of blockchain thought was a dynamic process and evolutionary. Pranav stated that "We started this at VLCC two years back." He think the best way to start with blockchain is to first recognize your problem statement. It took VLCC about a quarter to define its problem statement and it took them another three months to correlate the data coming from different aspects.“ VLCC recognized three problem areas:
- Erroneous Data: Where is the ultimate truth? Everybody has their own data. What and where is the central data to take decisions. A single source of truth is a central, controlled source of data from which the whole company can draw. Blockchain provides you with a single source of truth. And hence you offer superior value to the end user: the leaders, the managers, and the employees. They’ll spend less time hunting for data across the organization and more time using it.
- Attrition: Employee attrition leads to significant costs for a business which includes the cost of business disruption, hiring new staff and training new staff. We need a system to understand the drivers of, and minimizing staff attrition. As regards managing employee exits, feeding the separation inputs into the Blockchain trigger feedback into the employee satisfaction and engagement process. Further, integrating employee data with the distributed Blockchain would pick up the necessary parameters. This kind of data validation assumes more relevance in gig ecosystem.
- Recruitment: The blockchain technology connect and collect candidates’ information across platforms to get the profile matching correct against the Job Description. Additionally, it suggests referrals based connections one has in their network, thus enhancing sourcing network. For hiring, access to academic credentials and certifications could diminish the number of time recruiters spends verifying information. The blockchain allows peer-to-peer interactions that decrease middleman costs and streamline the flow of data needed in the hiring process. This technology will allow candidates to go directly to the masses while keeping their data confidential.
- Training: VLCC has a number of centers across the globe and reaching to each center and perform training need analysis is an arduous task. Deploying blockchain, VLCC had a single source of data regarding employee KRAs, the current skills, the required skills, etc.
On asking how VLCC go about implanting blockchain, Pranav comments, “Blockchain is pretty easy to implement but the challenge area is the unavailability of talent. He shares an example of an HCM tool they adopted a few years back and shared that it amazingly failed due to difficult jargons and bad user experience. However, blockchain is an experience. It is fairly easy to understand and utilize it in your day to day work. To make sure the technology is being used by employees and offer the decision-making ability to everyone in the company, VLCC divided the technology adoption process into four phases:
Phase 1- Setting up a team of blockchain expert:
The company appointed region-wise blockchain experts who took the ownership of educating and incorporating the use of blockchain in the day to day activities.
Phase 2- Let people participate:
Let people participate in the decision-making process. Make them learn how the teams are using blockchain in making decentralized decision-making process.
Phase 3- Help people visualize the outcomes:
Employees will not adopt any technology until they feel it has an advantage attached to it or it make their work easier. Let them participate in the process and help them see the bigger picture attached to adopting the technology.
Phase 4- Make them adopt in their day to day activity:
In this last stage, we asked our employees to use the technology in their work- be it report generation or making use of data for their next sales call.
In his parting notes, Pranav says that organizations need to adopt a calibrated approach to adopting a Blockchain-based HR operating model that tracks and validates the disparate streams of HR information, ensuring disintermediation, and separating authentic data from background noise. Blockchain has the capability to identify more and more gaps and plugging it in HR will prove to be indispensable for both business and talent management.