Prevailing economic and employment conditions are conspiring to make life difficult for companies trying to attract the best talent. We examine three factors that make intelligent human capital management (HCM) technology the only choice for smart businesses that are keen to keep up the downward pressure on costs.

Although the UK economy continues to teeter tentatively towards recovery, inflation is rising and interest rates are set to increase sooner rather than later. Consumers have little money to spend and organisations, particularly those in the public sector, must continue to watch how cash is apportioned.

Secondly, high profile companies – like Microsoft and Sony – have warned of a growing skills gap and an impending crisis in expertise. That situation is expected to deteriorate in 2011; graduates have to fight hard for a limited number of vacancies and companies have to fight even harder to attract, and retain, high quality talent.

The final concerns come down to costs, both in terms of economic and labour-based constraints. Research from consultant PricewaterhouseCoopers suggests the cost of replacing a competent member of staff equates to approximately a year of that person’s salary.

Finding the right person – from external advertising, dealing with recruitment agencies, interviewing candidates and negotiating salaries – is often a time-intensive and costly process. Even when a decision is made, there can be no guarantee that the person selected will represent a good fit for your business as many appointments are made on ‘gut feeling’.

At a time when many organisations are looking to cut costs and maximise value, HR departments are increasingly being tasked with identifying smarter ways to hire top quality talent as effectively and as cheaply as possible.

Help comes in the form of human capital management (HCM) technologies, which can help organisations to develop a more cost effective and successful recruitment strategy. These systems boost automation and improve reporting functionality to enable HR departments to analyse the costs and success of its different recruitment methods and ultimately, recruit as successfully and cost-effectively as possible.

HCM systems can also assist HR professionals to identify a preferred list of external agencies and negotiate better rates based on the success of the candidates they put forward. When it comes to internal assessment, detailed reporting techniques can be used to assess worker performance against broader company objectives’, helping the organisation to assess the suitability of specific employees. The results of enhanced automation are swifter access to accurate and real-time information and, ultimately, smarter recruitment.

Times are tough but that should not mean you scrimp and save on HCM software. The intelligent approach to recruitment will improve efficiency and provide a strong return on investment.