Receive daily articles & headlines each day in your inbox with your free ERE Daily Subscription.

Not logged in. [log in or register]

The Changing Face of Applicant Tracking

by Jun 2, 2005

Applicant tracking system (ATS) is a curious name for the software that powers most recruiting functions in Fortune 500 organizations and in many smaller ones as well. One would assume that recruiters and hiring managers would want a tool that assisted them in discovering the right person for a position ó not a tool that just tracked applicants. The name is reflective, though, of what these tools are designed to do. Their primarily purpose is to store resumes, retrieve them through search engines based on keywords, and track a candidate’s progress through telephone screens, interviews, and either an offer or a rejection. In fact, all the most popular applicant tracking systems are designed around the philosophy that the resume is central to recruiting. These systems enable the resume to be stored, retrieved, and matched against a requisition. They are not based on tracking relationships or people unless those people are “attached” to a particular requisition. This means that there is usually no way to gather and retrieve information about people who have not expressed interest in a specific job. There are a few systems, however, that are based on another and more useful philosophy ó that people and relationships are central to recruiting. These systems help recruiters develop and build relationships with people and develop talent communities. Most of the confusion recruiters have about applicant tracking systems is caused by not clearly understanding or appreciating the difference between these two philosophies. The agency world has been using tools that are more aligned to the relationship philosophy for some time now. They use applicant tracking systems that are designed to facilitate relationships, store contact information, and regularly communicate with candidates. These systems include Bullhorn and Prohire (which is built and sold by Recruitmax). The corporate recruiting world has focused almost exclusively on ATS-centered around tracking resumes. The applicant tracking systems most commonly used include Taleo, Webhire, Recruitmax, and Brassring. Some of them can do rudimentary relationship and talent community building, but their strength is around administrative and database functions. These relationship functions have been added on later and are not as seamlessly part of the product as they should be. Corporate recruiters who want to develop talent communities and build relationships are limited right now to a handful of systems. These include Hire.com and Yahoo! HotJobs’ HotHire (developed as a replacement for Resumix by Yahoo! Hotjobs) ó both products built more on the candidate relationship philosophy. Otherwise, corporate recruiters resort to contact management software such as ACT. Contact management software allows recruiters to store vital information about potentially interesting candidates, such as telephone and email data, as well as personal notes about the potential candidate. These systems also store resumes and track them against requisitions, but they are much better at candidate communication, scheduling appointments, reminding recruiters about specific people, and developing talent communities. They often provide candidates with tools to self-manage their relationship with the organization, such as updating their personal information when it changes or even removing themselves from the system when they are no longer interested. The history of how these systems evolved is fascinating and rich enough for several columns. But the core part of the story is that human resources functions are administrative and look for tools that help them store, track, codify and report data. Historically, HR and corporate recruiting had little interest in relationships or in “selling” jobs or people, and more interest in process and the ability to meet legal challenges. The agency world, on the other hand, has been built on relationship development and candidate communication. Recruiters who move from agencies to corporate roles are often surprised to find that they do not have the same tools. Many ex-agency recruiters feel handicapped in the corporate environment because of these differences in philosophy and tools. Agencies make their profits from quickly and efficiently putting good candidates in front of hiring managers. They often do not bother with resume storage, and instead keep track of potential candidate’s contact information and some notes about the candidate to help in their communication and to jog their memory about the candidate. When a need arises, they search through their notes and past communications to potential candidates and, when they find a potential fit, they call the person up, re-establish contact, and request a resume. This is slowly becoming the model corporate recruiters are using. It has many benefits. First of all, this philosophy changes the way recruiters source candidates. Rather than look for the perfect candidate who fits an exact need, they store information on a wide variety of people who may be a fit for some future position. As needs arise, they scan their contact lists, make phone calls and find or are led to an appropriate candidate very quickly. Often by using their persuasive powers, they influence hiring managers to consider candidates who otherwise might have been passed over because they were not exact matches to a requisition. This, in turn, reduces the time to present candidates. In fact, relationship-focused recruiters can often present a candidate in a few hours, rather than in a few days, which is more common. Time to present is becoming a measure of recruiter quality because it speaks to the recruiter’s ability to anticipate hiring managers’ needs and to have candidates ready. Unfortunately, most corporate recruiters spend lots of time looking at resumes of people who are unlikely to ever be hired and storing them. They do this to be legally compliant, to meet EEO guidelines, or just because the ATS requires that it be done that way. Corporate recruiters should learn from the agency model. Hiring managers go outside to agencies because they know they will quickly get appropriate candidates with little need for them to provide a lot of detail. Agencies can do this because they focus on understanding what needs the business has and which competencies will help meet those needs. Then they start to contact the people in their talent communities who have similar competencies. Within a few days, their contacts lead them to the best candidates. They rarely search resume databases or try to match requisitions to resumes. This is a futile effort for the most part, because hiring managers are never sure of exactly what they want and expect to be influenced by candidates and recruiters. In rare cases, hiring managers can even be delighted by the caliber of a candidate they did not expect to see. Matching humans to jobs requires flexibility ó something databases are by design not equipped to provide. A well-executed recruiting model assumes that matches are inexact and that candidates who meet the critical requirements but lack other requirements may be the preferred choice. Tools that provide flexibility in data entry, allow networking and candidate communication, and allow recruiters to make “fuzzy” matches to candidates will emerge as the winners in the overcrowded ATS marketplace.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Matt Huffman

    Great article, I think the points re: the traditional ATS are very valid. We have tried a few of these ATS and ultimately found that the most effective for our model of relationship driven executive search was the office 2003 w/ business contact manager coupled with the new desktop search features by both Yahoo and Google (which are currently free) for searching on resumes, candidate notes and e-mails

  • Nick Holmes

    While this article is an interesting snapshot of what is going on within the US ATS market, it misses the whole point of what has been happening in Europe. With much stronger labour laws concerning firstly privacy of candidate data and secondly making it much harder for organisations to donwsize, European organisations have by necessity focussed more energy on quality of hire and long-standing candidate relationships than US counterparts. To support this European ATS systems have been built on both criteria – administrative fluency and high touch candidate experience. How about looking a little bit wider?

    In addition, European recruitment is often focussed away from resumes. Many European companies recruit on more varied processes, often using a multitude of different forms or methods of application to meet the needs of the candidate pool. While this may not be 100% useful for US organisations, it certainly deserves examination by US corporate recruiters as alternative (perhaps more candidate-friendly) ways of moving candidates into your hiring process.

  • Dimitri Boylan

    Kevin Wheeler hits the nail on the head! Back in ?95 we were in the brutal NYC Headhunting business and all our applicants were passive job seekers. I would stay in touch with some people for 2 or 3 years before getting a resume. Applicants and Hiring Managers became interchangeable ? they were all important people who knew other important people. No applicant tracking system could serve our business model so we built our own on the Internet using Netscape 1.0 for the UI. We put a job board on the end of it and later carved out some of the functionality to create HotJob.com, and a commercial ATS called Softshoe. Softshoe went on the win Comdex ?98 because there were so few enterprise level apps running on Netscape 1.0 and delivering what is now the common navigation abilities of a browser, but the real beauty of the system could only be appreciated by a hard core headhunter, someone who knew that relationships drove their business. But HotJobs growth eclipsed our software business and we stopped selling the application, but there are remnants of our model still in the software today. As someone pointed out, to some extent recruiters a better off using their Outlook and Google Desktop Search than a rigid resume based ATS at this point in time. Unfortunately, serious agencies and recruiting departments need enterprise level control, storage, and workflow that the desktop approach does not provide. Most importantly, by putting the relationships into a system, we moved a lot of knowledge from the individual recruiters into the company as a whole, reducing the impact of turnover in our own staff on revenue generation. We doubled our number of placements within 6 months of implementation. That was a long time ago, but the fact remains ? it?s all about who you know.

  • Martin Snyder

    Great article as usual from Kevin. I?m commenting on two topics-

    From the article- ?A well-executed recruiting model assumes that matches are inexact and that candidates who meet the critical requirements but lack other requirements may be the preferred choice.?

    If that is the case, there are many poorly executed recruiting models out there- and how does this notion speak to the relative value of the artificial intelligence and fuzzy search technology that is often advertised as a silver bullet? I think there remains a prevailing mindset that the person who best fits ?the requirements? is the best person for the job. If ?the requirements? are difficult to reduce to words and testable standards, suspicion naturally grows about the actual operative selection criteria.

    There really is a cultural divide between TPR’s and some corporate recruiters. But there are many corporate recruiters either from the TPR world or naturally savvy who think like salespeople; and salespeople need CRM tools to reach their highest potential. For people not selling or serving, CRM is not particularly useful.

    Second, on Kevin?s characterization of the ATS market as ?overcrowded?.

    Well, that may or may not be true. It depends on where you believe the ATS is on a product lifecycle basis. If it’s early in the cycle, at the adaptation stage, the challenges are technology and reach; getting the product into the hands of the middle adapters as fast as possible. There will be many competitors and many business models.

    If it’s in the mass consumption stage of the market, the challenge is brand positioning, price strategy, and efficiency. There will be fewer competitors, and competitors will have more clearly defined market niches.

    If it’s in the mature stage, the challenge is complete cost control and successful passing of costs to customers while maintaining as much price power as possible. There will be very few growing competitors and moderate merger and acquisition activity among existing competitors. There will be few new competitors.

    If it’s in the renewal / death phase, the business models are reinvented or superseded, by existing or new market entrants. There will again be more competitors, newer competitors, and growing competitors as the new model or replacement technology takes over the market.

    A good argument could be made for any of the four lifecycle stages in today’s ATS business. Which is the actual situation ? Is it really overcrowded ?