Building a Better ATS? Part 2

This the second part in my article series on the limitations of applicant tracking systems. Part 1 provided a global perspective on some of the major issues impacting ATSs. Here in Part 2, I’ll focus specifically on some of the current limitations in the way applicant tracking systems are handling key areas of the hiring and talent management process. Identification of Talent Needs In order to accurately identify recruiting and talent needs, an organization must:

  • Determine the talent and skills it needs to meet its corporate objectives
  • Conduct manpower planning (that is, convert skills required into hiring goals)
  • Decide who needs to be hired when

Currently, there is little or no support for the first two items among any ATS. Vendors assume that client organizations have a full understanding of their manpower needs. No vendor I am aware of incorporates any capabilities to support the adjustment of staffing goals as skills are either acquired or lost. Some ATS products do support the import of staffing goals from third-party systems, but this generally requires the use of middleware, as well as special configurations to the ATS (non-standard functionality generally entails added costs). Sourcing Sourcing is perhaps the most fundamental aspect of recruiting. Without sourcing, an ATS is like a car without the proper fuel. It makes no difference whether the car is a Lexus or Chevrolet; it’s not going anywhere without the right fuel. The fact is, no one is getting hired without good sourcing. That means that, in order to be effective, an ATS must be able to:

  • Interface with sources of talent
  • Track source effectiveness

There are a number of problems with most applicant tracking systems in this when it comes to interfacing with talent sources. Interfacing with talent sources is generally limited to job boards. Other sources, such as job fairs or campus placement, usually require manual intervention. Lack of standardization, combined with a limited adoption of XML, ends up limiting intake capabilities. Posting capabilities to any source other than a job board requires the use of third-party services. Even placing an ad in a newspaper is generally not possible without involving an ad agency, though most major papers accept electronic placement and have clear specifications for placement and pricing. As for tracking the effectiveness of sources, this is generally limited to data available to a client in their own recruiting efforts or anecdotal evidence. Where such tracking is not automatic (that is, for all sources other than job boards) data is sparse or non-existent because of a lack of technology to track sources. Another problem is that there is no central database on the effectiveness of particular sources. Given the huge numbers of jobs being placed through any ATS, it would be relatively simple to develop aggregate information on source effectiveness, at least for systems that are available as ASPs. Screening With pressure on HR departments to downsize their staffing functions, there is a big need to improve automated screening. In general, screening ó or at least pre-screening ó is a largely mechanical activity. Ideally, effective screening capabilities allow recruiters to make the most of their time in creative sourcing and in-depth screening of well-qualified candidates, rather than wading through masses of candidates to develop a slate of finalists. For this to happen, an ATS needs to provide support for:

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  • Assessment
  • Matching job requirements to resumes or profiles

Assessment is, in all fairness, outside the purview of an ATS, given the validation requirements of psychometric instruments. Most ATS vendors support some form of integration with third-party assessment tools. However, the lack of standardization in interfaces and the limited adoption of XML have made the use of third-party assessments needlessly complex. The technology to match job requirements to candidate resumes is readily available, but it’s incorporation into ATS has been slow. Much of the screening that is done is largely based on keyword matches rather than any intrinsic evaluation of candidate skills. While current matching technology is far from perfect, in combination with assessments and some qualifying through targeted questioning it can reduce much of the work recruiters do in pre-screening. Some applicant tracking systems claim to solve this problem by providing powerful search capabilities, including the ability to automatically advance or disposition candidates based on searches. However, this is mostly of value in doing demos. While the technology to support search is robust, its effectiveness is limited to the ability of users to define the appropriate criteria and translate them into meaningful questions and/or search strings. Few recruiters are trained in writing good search queries or care to do so and with candidates increasingly aware of how to write resumes to have them picked up in searches; recruiters are left to reviewing most resumes themselves. Process Administration Process administration ó i.e. the ability of an ATS to support diverse recruiting processes, including requisition management, interview scheduling, tracking activities, and candidate communication ó is the primary strength of most applicant tracking systems. Unfortunately, strength in process administration is hardly something that impresses or excites anyone outside a few people in legal or employee relations departments that deal with OFCCP or EEOC audits. It is difficult to keep a straight face when hearing a claim that a system has strategic value and impacts the bottom line for an organization when its main purpose is to move documents electronically. Also, there is only so much that can be done here to improve recruiting, aside from reducing some of the tedium (and paper cuts) associated with paper shuffling in a pre-ATS world. Client organizations do benefit from seeing more consistency in process administration because of required steps and pre-conditions in process flows. And clearly, an ATS is indispensable in defending an audit. On the other hand, this means that the system is really more of a control mechanism than a productivity enhancer. An ATS reinforces the view that recruiters and hiring managers are not to be trusted to get it right, and would, if left to their own devices, run amok violating hiring processes. To carry this through to its logical conclusion, by leveraging their strengths applicant tracking systems enforce discipline and bring about efficiency in recruitment ó but they do it as an instrument of a “Theory X” mindset. Not exactly material for the marketing brochure. Onboarding Closing out a recruiting effort requires that a new hire be brought onboard. While the definitions and expectations around what that means differ, a certain number of activities must be completed. These include:

  • Verifying credentials (education, licensure, etc.)
  • Verifying employment eligibility
  • Interfacing with payroll/HRIS

There is limited support for verification of credentials. Many ATS products can support interfaces to third-party services for verification of credentials, though the functionality and results are still somewhat sketchy and inconsistent. There is almost no support for verification of employment eligibility. No ATS vendor participated in the INS’s (now in the Dept. of Homeland Security) pilot program for electronic verification of employment eligibility. Interfacing with a payroll system or HRMS generally requires the use of middleware. Despite the fact that it’s a common need, this is far from being standard functionality. ATS vendors are not entirely at fault here, since payroll/HRMS providers, especially the major ERP vendors, have no interest in simplifying or standardizing data exchange. Nonetheless, ATS vendors rarely inform clients that payroll/HRMS integration is a far from seamless process. Certifications from ERP vendors are touted, leading to the implicit assumption on the part of clients that a certified product can be easily integrated with an ERP. Even systems that integrate with payroll/HRMS are incomplete solutions. The data being transferred is limited to what is collected for recruitment. Much of the information needed for getting an employee a paycheck or enrolled in benefits (social security number, deductions, dependents, etc.) is not included. Since an ATS has powerful capacity for intake of candidate data at various points in the hiring process, it would seem that being able to collect the data necessary to complete on-boarding could be readily added. Yet this is generally not supported. Budgeting/Cost Management Recruiting can be expensive, and most organizations need to manage their recruiting budgets. If recruiting is to be considered a strategic function, then it is all the more imperative that recruiting managers demonstrate the ability to manage budgets and provide value that exceeds costs. This is easier said than done, since tracking costs is difficult. Recruiters often do not have access to cost data, or else it is in a form not readily accessible by an ATS. But prior to monitoring a budget, a budget needs to be created. The data to support the creation of a budget (historical trends, time to fill, skills, etc.) is available in an ATS, but no product has the capabilities to support using this data for forecasting and creating a budget. Metrics Lately, much recruiting and HR literature has focused heavily on the need for metrics. This is certainly correct. Tracking key performance indicators (KPIs) is an absolute requirement for monitoring the effectiveness of the recruiting function. While some KPIs can be calculated from the data in an ATS, others KPIs require the use of data from multiple sources. For example, most cost data is available in an ERP, and performance data is only available in an HRMS. Some metrics can only be determined using all three sources. Most ATS products have good reporting capabilities, but typically they rely on users to define their own KPIs. Standard reports are limited to applicant tracking. The inability to effectively interface with other systems (HRMS, payroll) prevents the full range of KPIs related to staffing being available. The problem here is again one caused by a lack of standards and unreliable technology. In conclusion, ATS products address only a small fraction of recruiting needs. The inability of vendors to increase the footprint of their applications is difficult to understand given that there is so much low-hanging fruit. Since customers are paying for third-party applications to fill the void where possible, these are clearly opportunities that can generate a revenue stream. The vendor that starts capitalizing on these opportunities will quickly break away from the pack.

Raghav Singh, director of analytics at Korn Ferry Futurestep, has developed and launched multiple software products and held leadership positions at several major recruiting technology vendors. His career has included work as a consultant on enterprise HR systems and as a recruiting and HRIT leader at several Fortune 500 companies. Opinions expressed here are his own.