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Placing the right people in the right jobs and maximizing performance and productivity have long been essential to running an effective business. If an individual doesn’t have the skills or experience to handle a particular task, the chances of failure are greater. On the other hand, assigning a project to someone with the appropriate knowledge and background can increase the chances of success.

Sounds obvious enough. Yet, how many times do initiatives fail because the people running a project or doing the work in the field lack the necessary talents and experience? Human Capital Management (HCM) technology helps organizations get the right people into the right job functions and helps businesses evaluate how well employees are doing their jobs.

HCM can involve a variety of functions, such as the recruitment and hiring of people, ongoing training, placing people in the most appropriate jobs based on their skills and experience, and other processes related to human resources (HR).

Given the high level of competition for skilled workers around the globe, HCM will likely become more important over time. HCM software “ will be one of the fastest growing markets in the technology space for years to come,” says Jason Averbook, CEO of Knowledge Infusion, a consulting firm that specializes in HCM technology.

Among the key drivers for technology that helps manage people is the continued need for specialized talent, Averbook says. “ Any professional, whether from the line of business or HR, will tell you today that talent is much harder to find than it was five years ago,” he says.

The major benefits of HCM have evolved with the different generations of HCM software, Averbook says. “ The earliest versions of HCM software were solely focused on efficiency or cost savings for the organization,” he says. Whether that involved labor or time savings, “efficiency was the early and sole purpose for deploying HCM solutions,” Averbook says.

The second generation of HCM software has been “built to focus on effectiveness or the ability to use people to drive additional wealth into the organization,” Averbook says. “HCM software is no longer a tool for HR, it is a tool for the business,” with benefits that can vary based on which industry an organization is in. For example, in retail, one of the gains could be an increase in same-store sales based on talent, and in health care, it could be increased patient satisfaction and success rate.

“These outcomes turn HCM software from a cost-savings tool for the back-office HR and payroll functions to a tool for the business to drive new revenues,” Averbook says.

The upcoming generation of HCM solutions will focus on communication, collaboration and knowledge, Averbook says. “As Web 2.0 tools enter the workplace, organizations will leverage social networking, wikis, blogs and other tools to [ensure that] the people chain — right people, right place, right time, right knowledge — is optimized,” he says.

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