How Smart Contracts are Transforming Remote Hiring for Growing Businesses
As skill gaps continue to create headwinds for US businesses fostering growth ambitions, the cause for blockchain adoption and the ability to create smart contracts for more hiring efficiency are growing.
According to a report from the McCourt School of Public Policy’s Center on Education and the Workforce (CEW), the United States needs 5.25 million additional workers with training beyond high school through 2032, and 4.5 million will require at least a bachelor’s degree.
The report, entitled ‘Falling Behind: How Skills Shortages Threaten Future Jobs,’ found that 171 of the 561 occupations analyzed face skills shortages in the years ahead, while nine occupations are expected to experience critical shortages in sectors like education, engineering, and healthcare.
While millions of roles are set to experience skills shortages in the future, the technology available to employers to overcome these challenges is becoming more dynamic.
One of the biggest innovations that could transform talent acquisition is blockchain, and the smart contracts that are a key component of the technology.
Blockchain is also experiencing a seismic level of growth and is expected to reach a market size of $1.4 trillion by 2030, representing a CAGR of 90.1% over five years.
Smart contracts can accelerate remote hiring by automating many different aspects of the recruitment and onboarding process, enhancing transparency, security, and efficiency in payments without the need for intermediaries.
Could smart contracts transform remote hiring and the employer of record (EOR) landscape? Let’s take a deeper look at a technology that holds plenty of promise for bridging growing skill gaps:
How Smart Contracts Work
Smart contracts are self-executing contracts with their terms directly written into code and stored on a blockchain, which itself is an immutable distributed digital ledger.
Acting as digital agreements, smart contracts can automate processes and eliminate the need for intermediaries, helping more businesses to deploy an effective hiring strategy with agile contract terms and adaptive payment structures.
By incorporating smart contracts into employment processes, it’s possible for organizations to work with greater levels of transparency and efficiency throughout their hiring practices.
When an employee or business meets their side of the conditions stipulated in the smart contract, such as the verified completion of a project, payment can be released without the need for intermediaries, reducing administrative costs and other troublesome delays.
Prompt Employee Payment
Many modern remote work platforms now support digital payroll using cryptocurrencies and currency-backed digital assets. This is helping to support the growing demand for blockchain-based salary disbursements.
Smart contracts actively reduce payroll friction for global teams, with self-executing payments capable of being actioned in the preferred currency of the employee. External tools like AI and machine learning (ML) can also be implemented to maintain a level of regulatory compliance with local employment laws.
These faster payments are made possible because there is no need for an intermediary throughout the process. This means that money can be transferred in a way that’s free of many of the hidden costs that come with traditional payroll systems. With international wire transfers charging between $45 and $65 per transaction and currency conversion fees responsible for between 3% and 5% of each payment, smart contracts are set to become an excellent cost-saving tool in the long-term.
The Age of Trustless Hiring
Another advantage for companies looking to bridge skill gaps to foster growth is that smart contracts can open the door to more accurate hires.
Blockchains are more than just a fintech tool, and they can remove the need for trusted third parties to mediate contracts, helping more businesses to identify and onboard the most qualified candidates from all around the world in a frictionless way.
Contracts and payment terms can be easily drawn up and set into action in a way that all parties are happy with.
To further boost the accuracy of hires, blockchain’s immutable technology means that records of skills and experience within the international talent pool can one day become free of fraud.
Enhanced Security
Because all smart contracts are written into the blockchain, the ability to encrypt transactions means that it’s harder to hack.
Additionally, each record takes the form of a new block on the chain and is connected to all previous and subsequent records on the ledger. This means that the entire blockchain would need to be altered in order to change one single record, making on-chain technology one of the world’s most secure payroll tools.
Bridging the Talent Gap
Although the talent gap is expected to grow in the coming years, blockchain technology and its ability to deploy smart contracts may be critical in supporting growing businesses in finding the best global prospects for vacant roles.
With strength in security as well as payment efficiency, there are plenty of ways in which switching to smart contracts can benefit businesses throughout different sectors.
As blockchain use cases continue to grow, the future looks exciting for how smart contracts can help businesses to access talent worldwide to help achieve their scaling ambitions.
