Blockchain a Game Changer for Total Rewards and Employee Benefits

In today’s climate of talent shortages, benefits are a top priority for HR managers. While technology-driven advancement is an important feature of improvement programs, those who want to leapfrog their peers should consider adopting blockchain-based offerings and solutions, write experts Paul Lalovich, Tesha Teshanovich, and Ivan Bjelajac.

One of today’s (and future’s) most talked about technologies, blockchain is here to stay, and it’s spreading everywhere, bringing security, speed, and reliability to a variety of industries while serving even more needs. more varied.

One area poised to be disrupted by blockchain is employee benefits. While the rest of the corporate world is experimenting with blockchain at an increasing rate (payments, supply chain, etc.), the field of employee incentives and compensation has traditionally been slow to embrace innovation. blockchain-based.

A missed opportunity – blockchain gives employee benefits a chance for significant upgrades that can benefit all stakeholders, from employees to management and shareholders or owners. If done right, the best-known emerging technology for Bitcoin and other coins that leverage its backbone, can be a game-changer for the landscape.

Benefits of Blockchain Based Total Reward

We see six key areas emerging in blockchain-based total reward programs. Companies among the first to implement these solutions are likely to win praise for their forward-thinking and vision, but most importantly, to develop a significant competitive advantage in the war for talent.

Giving qualified employees the option to receive part or all of their salary in a restricted enterprise coin, stablecoin, “synthetic” incentives, digital benefits or other cryptocurrency choices are attractive propositions. with great potential. Any or all of these possibilities would be delivered on the blockchain.

Direct compensation of employees
Payroll via blockchain-based technologies is the simplest possible implementation. An employee may have the choice of receiving payment traditionally or through a cryptocurrency asset, including a stablecoin.

Synthetic capital on the blockchain
As companies grow, this option would allow employees who achieve well-defined goals to share in the success through company stock or options delivered as restricted coins. This helps build employee wealth and their sense of personal investment in the company. By enabling smart contracts, managing these reward programs will be smooth and simple.

Synthetic or phantom stock plans and stock appreciation rights (SARs) are two types of stock ownership plans that do not use stock at all but still reward employees with bonuses deferred linked to the performance of the company’s shares.

Benefits Management Cost Optimization
Insurance networks have been quick to see the potential of blockchain, and all major players are turning to using the technology. This makes integrating a company’s benefits and compensation programs, also on the blockchain, an obvious choice. The increase in speed and communication, as well as ease of management, will reduce costs.

As this is an area of ​​great concern for many businesses, finding ways to better manage health care and life insurance is a huge win. Blockchain security is also a plus for privacy-conscious employees.

Project Tokenization
The increased use of freelancers, remote contract workers, and other elements of the gig economy has left open the question of how to encourage project work without straining budgets initially. Blockchain token rewards based on the achievement of performance goals are a clear and straightforward solution, allowing high performers who are not necessarily permanent hires to be rewarded fairly and equitably. The effect this could have on worker motivation and morale is obvious.

Tokenization of awards, prizes and honors
The use of tokens for employee prizes and awards is only limited by the creativity and imagination of a company’s management and human resources team.

Again, the strength of this forward-thinking approach is the ability to tie the delivery of these tokens to employees in a way that is tied to performance ratings or even specific dates in the event of vacation bonuses or related rewards. With all of this running securely and reliably on the blockchain.

Company specific restricted parts
A company with its own tokens for use with the above programs and more, which are limited to its own platform and blockchain network, is excellent protection for the interests of the company and the employees. It is also an exciting type of marketing within its industry as this type of program is spreading. Token release can follow many mutually beneficial strategies in line with the company’s unique vision and philosophy.

Bold move?

2022 is the year to look at issues in the company’s benefits and compensation programs with honesty and openness. And then make a decision based on the changing realities of work today and tomorrow. Using strategies and programs developed five years ago before Covid is not a strategy that will achieve peak performance.

So there’s no better time than the present to engage experts in this field and see how blockchain can revolutionize your company’s incentive, rewards, and compensation program, now and in the future. .

About the authors: Paul Lalovich is a partner at management consulting firm Agile Dynamics, of which Tesha Teshanovich is a director. Ivan Bjelajac is managing director of software engineering company MVP Workshop.

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