Since Bitcoin was first launched in 2009 and attracted its competitors a few years later, cryptocurrencies have come a long way. Unlike the traditional system, their use allows us to engage in financial transactions without relying on banks or governments.
Due to most of them being decentralized, cryptocurrencies offer safer and more efficient transactions. Many famous companies have already adopted Bitcoin as a possible payment method, including Microsoft.
Their adoption in the financial sector is on the rise, so we can’t help but wonder — should human resources provide crypto as a benefit to employees?
Blockchain technology itself has a lot of use cases in HR, so let’s explore why paying salaries in crypto is a smart idea and might become the salary of the future.
How can blockchain technology improve HR processes?
When it first came into the picture, blockchain technology stood behind bitcoin transactions only. Fast forward to 2023, and its use cases have significantly increased.
We haven’t yet reached a point where it’ll fully replace banks, but it can potentially revolutionize the financial industry.
Blythe Masters once said: ‘’The blockchain is the financial challenge of our time. It is going to change the way that our financial world operates.’’
Amongst many others, blockchain has a huge impact on HR as well. Below mentioned are points in which blockchain technology can benefit the HR industry.
1. Improve recruitment process
The recruiting process is a time-consuming and challenging task. To find the right candidate, you need to go through hundreds of applications, many of which have been tampered with. Not every person tends to tell the truth in a resume, which means there’s a possibility for your new employee to underperform.
With the help of blockchain technology, candidates’ past work experiences and education are securely stored on the blockchain, meaning the risk of receiving fabrications is greatly reduced.
2. Effective contract management
The use of smart contracts eliminates the need for third parties, meaning the agreement can be automatically signed, once the predetermined terms and conditions are met. Basically, there’ll be no need for unnecessary documentation, since smart contracts transform a paper contract into a digital one.
Not only that but once the employee has finished their task, their salary will be immediately distributed. The most popular blockchain that offers smart contracts is Ethereum.
3. Improved financial operations
We all know how complex cross-border transactions can get and this whole process can be simplified with the help of a decentralized ledger. All of the transactions will be safely recorded on the blockchain. Moreover, every payment can be easily and instantaneously done, while transaction fees can be drastically lower.
4. Increase security for personal and financial data
The HR department is faced with sensitive information on a daily basis — from health insurance to bank details. This automatically means their system is exposed at cybersecurity risk.
Blockchain technology is all about transparency, however, it’s impenetrable. Storing all of this sensitive information on a blockchain reduces the risk of it being hacked. Blockchain transactions are encrypted and stored in blocks and each new block of information connects to the previous. That’s what makes this technology the world’s most secure database architecture.
It’s important to note that in addition to utilizing blockchain technology to increase security for personal and financial data, the HR department should also get familiar with cookie laws. The department should ensure that their website or platform complies with regulations regarding the use of cookies, which are small text files that are placed on a user’s device to track their online activity. By following cookie laws, the HR department can help protect the privacy of their employees’ personal information. Utilizing blockchain technology and getting familiar with cookie laws are both crucial steps in safeguarding sensitive data against cybersecurity risks.
5. Helps companies to pay employees in cryptocurrency
Blockchain’s primary use is to work with cryptocurrency transactions. More than ten years ago, Bitcoin was the only coin with its own decentralized ledger. However, this trend has gotten so far that now we have several cryptocurrencies with their own private blockchain.
Companies can decide which cryptocurrency and blockchain will benefit them the most. To this day, Bitcoin (BTC) remains to be the most popular, while Ethereum (ETH) remains to have the largest blockchain.
Why paying your employees in crypto is a smart idea
We’re always associating cryptocurrencies with investments, but have you thought you can use them as a way to pay salaries as well?
That’s right! As a way to boost your HR game, you can now pay your employees in crypto. This trend is still in its infancy, so there’s still a long way before full adoption. However, many companies are already practicing crypto payroll, as a way to attract young workers.
How is this beneficial for your company?
- Increased employee satisfaction
- Stand out from the competition
- Easier payments to remote overseas workers
All around the world, cryptocurrencies are used as payment methods, mostly because these transactions are faster. Transferring of funds can be done within minutes, which means employees won’t have to wait days or maybe weeks to receive their wages, as they would with bank transfers. This is especially important for international remote workers since the transaction fee can be smaller.
Not only that, but offering crypto as a benefit, makes your job descriptions more attractive. People nowadays tend to be drawn to cryptocurrencies, especially millennials, which gives you an advantage in hiring and recruiting.
Why would a worker want to receive their salary in crypto?
Even though it’s a risky investment many find Bitcoin to be an alternative way of making a second source of income – and rightfully so! Since the day of its release, Bitcoin has shown a fair increase in value with an all-time high of over $65.000.
El Salvador and the Central African Republic have even adopted Bitcoin as a legal tender and we’re expecting a few others to do the same. Moreover, approximately 15.174 businesses worldwide accept Bitcoin.
Employees who are seeing cryptocurrencies as a future investment, will be especially pleased to receive their salary in crypto. It’s like giving them the motivation to save and invest.
It’s possible for some to find this risky, after all, Bitcoin is volatile and totally unpredictable. However, you can still pay a small part of their salary in crypto, for example, their bonuses. That way, a small portion of their salary will be used for investing, which means these small savings can always be doubled.
How to pay your employees in Bitcoin
Since this trend is relatively new, you might have difficulties adjusting to the process. Here are a few things to keep in mind before you jump in:
- Inform employees and receive their authorization. Sure, implementing this can be beneficial for your company, but it’s not recommendable to do anything, without your employees’ agreement. Don’t forget to inform them about these changes and about the risks involved as well. Keep in mind, every person has probably heard about cryptocurrencies, but it doesn’t mean they know exactly how they work.
- Purchase Bitcoin. Open your corporate account and fill it in with the needed amount of Bitcoin. This account and transactions need to be supervised, so it might be a good idea to find a third-party vendor to do this for you.
- Establish the costs. Different countries have different takes on cryptocurrencies. Exchanging Bitcoin is a taxable event and your employees have to be informed about this. There are also transaction fees, so if you’re planning on absorbing them, make sure to mention them.
- Make sure it’s legal in your country. Some countries have no problem with companies paying employees in crypto, but some are against it. That’s why it’s best to research and inform your attorney, before making rash decisions that might end fatally.
How to buy cryptocurrency
Before offering crypto payrolls, you have to purchase the cryptocurrency itself. It’s a rather simple process, but a not-so-tech-savvy person may run into problems. Listed below is a step-by-step guide on how to buy cryptocurrency.
1. Find a crypto exchange
Before you decide on the first you stumble upon, do your research and make sure it’s safe. You don’t want to become subject to fraud. There are a fair number of crypto exchanges out there, so find the one that’s most convenient to you.
2. Verify your account
Almost every exchange will ask you to go through a verification process, especially if you’re buying large amounts. The process itself shouldn’t last more than ten minutes.
3. Choose a payment option
It’s up to you to decide the payment method. For example, you can choose to buy shiba inu coin with credit card or you can buy it directly through your bank account.
4. Place the order
Once your payment option is connected with the exchange, choose your desired asset and insert the amount.
That’s all!
Is cryptocurrency the future of finance?
Many seem to agree. Cryptocurrencies are already changing the world as we know it. They differ a lot from a traditional concept but have somehow managed to win us over.
It’ll take time before cryptocurrency use is fully adopted. However, we’re definitely getting there – slowly but surely!
Despite cryptocurrencies not being regulated, many companies have accepted them as payment methods and it’s expected this trend is going to continue growing with time.
We can never know what the future holds, but cryptocurrencies have proven to be extremely beneficial, which makes people think they’re indeed the future of finance.
