Is Your ATS an Asset or Liability?

In the past few weeks I’ve written about two seemingly unrelated issues ó the shift in corporate America to emphasizing the hiring of less-active candidates, and how to assess executive potential in up-and-coming managers. The first article highlighted the need for applicant tracking systems (ATS) to improve the suite of candidate relationship management services companies use. Less active candidates have different needs than active candidates (two examples: more information with respect to how the job ties into the business strategy, and implementing a continuing dialogue of the status of major company hiring initiatives), and a properly designed ATS can automate much of this. The second article indicated that one of the important traits that senior line executives need to possess is the ability to use technology to more efficiently manage and scale business processes. Such business functions as distribution, sales, and manufacturing have been able to use technology to provide profound improvements in performance. HR/recruiting hasn’t seen had the same IT/process improvement benefit. In my opinion, not many HR managers truly understand how IT can impact business performance. This is why few get promoted to business unit management positions and why even the best ATSs are not as effective as they could be. This could be sheer speculation on my part. So to prove the point, I’d like you to take this quick assessment of how well your ATS measures up against the best, and how much it’s costing you every day. A low score across many companies will prove my point that HR/Recruiting and IT don’t mix. One clue you might have a problem: low user adoption rates. If you don’t have at least two-thirds of your recruiters properly using the major features of your ATS, you’re wasting lots of time and too much money. More important, you’re not hiring all of the top people you should be. The ATS Performance Evaluation Where do you stand on these important measures? 1. Recruiter adoption rates

Good: At least two-thirds of the recruiting team uses most of the features of your ATS, keeping all information current.

Not good: Low user adoption rates; many important features not used or understood; information not kept current.

2. Desktop navigation

Good: It’s easy for recruiters to find all of their hot tasks and action items every day. It integrates efficiently with enterprise calendar and scheduling tools.
Not good: Recruiters have to hunt through req folders to find the status of most issues. Alerts aren’t easy to set up and hot tasks often go cold because of the need to keep dual scheduling and calendar systems.

3. Ease of use

Good: Finding and updating records is easy, quick, and efficient; recruiters gain time to spend on critical recruiting tasks, with some flexibility to match individual recruiter styles.
Not good: Recruiters need to open up too many windows and make too many clicks to change a candidate’s status; it takes too much time to update information. The system is not very intuitive.

4. Resume screening and reviewing

Good: It’s easy to rank order all of your candidates from every source in terms of quality and review these resumes quickly. Recruiters don’t waste time looking at the resumes of unqualified people.
Not good: Filtering and screening resumes is not done by everyone ó and even those who do it find it slow, cumbersome, and not very accurate. Recruiters spend too much time reading too many resumes of unqualified people.

5. Candidate application process

Good: It’s easy for candidates to find jobs and apply online. Seven minutes or less is the target. Questions are designed to insure no opt-outs of top people.
Not good: It’s hard to find jobs; applying is difficult; parsing of data to speed up applications is non-existent or inaccurate. Opt-out ratios at each step are high.

6. Requisition management

Good: It’s easy to use. There is a great library of approved requisitions that are easy to find and use. Getting approvals is natural.
Not good: It’s cumbersome. It’s difficult to open, find, and organize requisitions. Approvals are difficult or impossible to manage electronically.

7. Sourcing channel strategy and management

Good: It’s easy to write ads, post and update jobs on best sites, manage outside vendors, and manage multiple sourcing channels including pipelines and employee referrals.
Not good: It’s difficult to track responses by source, and managing multiple channels is not easy to do.

8. Reporting and metrics

Good: Recruiters, recruiting managers, and hiring managers can quickly find out what’s happening on every search, how productive each recruiter is, and where the best sources of talent are located. Reports can be modified easily without vendor involvement.
Not good: Reports are mostly historical and too late to be meaningful. There is little visibility available about how productive the recruiting team is on a daily or weekly basis. There is limited flexibility to create user-defined reports without significant vendor support and cost.

9. Hiring manager interaction

Good: Managers are involved and pleased with the system. It’s easy to correspond, including sending resumes, scheduling interviews, updating candidate status, and maintaining notes. It’s easy to keep managers up to date.
Not good: Managers fight the system. Too much time is wasted coordinating candidate activities with hiring managers and others interviewers. It’s difficult to keep track of important information and resumes.

10. Off-line activity

Good: Very little information is needed to be kept in offline files or spreadsheets.
Not good: Recruiters develop their own outside workaround processes to offset inherent weaknesses in the ATS.

How many “not goods” did you have? Add them up and multiply by 10%. This is your ATS Inefficiency Factor. Each “not good” detracts from a company’s ability to hire good people. A good ATS, properly implemented and used correctly, will significantly enhance a company’s ability to hire more top employees. The cost of missing a great hire because of inefficiencies in the recruiting process is just as costly as making a bad hire. Often, bad hires result from a manager being forced to hire a second or third choice because the best candidate either didn’t apply, or the best person opted-out during the process. [Note: If any problems are revealed by the survey, you should take a more dynamic evaluation, my ATS Online Performance Evaluation. This interactive diagnostic tool will quickly pinpoint your problems and quantify how much an underperforming ATS is costing you every day in lost productivity and, more importantly, in lost opportunity to hire top people. We’ll be presenting a free online summary of the results of this survey on October 27, 2004. You’ll be invited as long as you take the survey. In addition, we’re now working with all of the major ATS vendors to determine where they stand on developing new features to support the needs of less active candidates. We’ll provide a sneak preview of this report during the online summary. This is something you won’t want to miss if you’d like to get more out of your technology investment.] Recognize that a well-designed and properly used ATS can provide these major benefits.

Improve recruiter productivity through ease of use and more expert tools.
Improve the candidate experience by focusing on the needs of less active and more discriminating top performers.
Attract and hire more top performers by integrating workforce planning with multi-channel sourcing strategies.
Reduce time-to-fill through the development of high-yield pools, pipelines and networks.
Reduce “bad hires” by providing better tools to instantly weed out the good from the bad, and providing more time to select rather than settle.

If your ATS Inefficiency Factor is at 100% (all “not good”), it means that just about all of your new hires sourced and managed through the system are not as strong as possible. This is costing you time, money, and lost opportunity every single day. There is no reason to settle for an underperforming ATS. Short-term fixes are possible. This could be as simple as ensuring that recruiters put all of their hot candidates into a “red alert” folder. These “hot candidates” could then be worked daily without having to find them by requisition. Surprisingly, we find that only 20% of corporate recruiters use this simple technique. Sadly, we also find that many top rated ATSs make this simple idea hard or impossible to implement. The other area we find lacking is a company-wide optimized standard for using the ATS’s resume filtering and screening capability. This is the most important productivity feature of an ATS, and most recruiters don’t use it correctly. While some screening tools are below par, improper use makes matters worse. Recruiters can’t spend time looking at the resumes of unqualified candidates. This is a huge time-waster and technology can help. The major ATS vendors are starting to recognize these problems and many are willing to take action. But they need more direction and leadership from their clients. Without this input, hiring top talent will never be a systematic business process. It requires strong HR/recruiting managers who know the value of well-designed and properly implemented IT systems. For some, this will be a steep learning curve. But the lack of knowledge and appreciation for IT has been one of the reasons most companies have not seen a good return on their ATS investment. A tremendous opportunity now exists for corporate HR/recruiting to take full advantage of the latest technology and expert systems to improve the quality of every hiring decision. It starts by not accepting the status quo. Tell your ATS vendor to focus on what’s important to you, not what they think is important. If you didn’t do too well on the ATS diagnostic evaluation, now’s the time to take action. The results are just a clue that you’re not hiring the best people you should be.