ATS and Assessment: Where Are We Headed?

Although it is happening a bit more slowly than many of us would have liked, the worlds of applicant tracking and assessment are slowly beginning to overlap. This is a good thing, because these two components of the modern staffing system actually complement one another very well. For instance, applicant tracking systems add value because they:

  • Help companies effectively manage excessive resume volume
  • Help companies manage the tasks of staffing a distributed organization
  • Provide a way to capture important data about the hiring process (i.e., applicant source data, EEO statistics)
  • Provide staffing professionals with a dashboard from which they can connect many aspects of the staffing process Those of you who regularly follow my writings have probably heard me rant about the inability of applicant tracking systems to provide quality decision-making tools. This is really unfortunate, because ATSs are sold based on their ability to deliver quality, leaving customers somewhat dismayed when they discover that the act of spending tons of money on an ATS does not automatically add any value to the staffing process. One of the most unfortunate things about the current ATS market is that vendors are trying to skirt the issue of their systems’ shortcomings by touting their ability to allow users to create high-level qualifications screening questions. Anyone who has seen the haphazard (and dangerous) manner in which this functionality is most often deployed will realize that, when used incorrectly, this type of functionality can actually create more problems than it solves. Those of us who have been using data-based predictive tools to help increase the value of the staffing process understand that delivering quality requires an additional component. No matter what type of tool is used, this component must be something that can actually use information provided by candidates to make reliable, accurate predictions about how well that candidate will perform on the job, or how well they “fit” with an organization. This is where assessment comes in. Assessment is useful because it:
  • Uses scientifically derived tools in a standardized manner to facilitate quality decision making
  • Can be used to clearly demonstrate the value of hiring decisions
  • Helps to ensure the legal defensibility of the staffing process
  • Can be used to build a bridge between assessment and many other key HR systems (i.e., training, performance management)

I want to make it clear that I am not completely biased here. I feel that the world of assessment is far from perfect as well. Most assessment companies have not really advanced the model too far from the use of paper and pencil tools. While delivery systems are now far more advanced and great efficiency has been added to the process of assessment, there are still some problems to be dealt with. For instance, assessment is still labor intensive. There is still a big tradeoff between the ease of configuration and the amount of value the system can provide. Secondly, off-the-shelf, pre-packaged assessments will work but may miss subtleties that are critical for effective performance. On the other hand, setting up a customized assessment is labor intensive and can be time consuming. Perhaps the biggest problem with assessment is that assessment providers are not making it easy enough for corporations to understand the value their tools are providing using the language of the bottom line. You can see where I am headed with this. The complementary functionalities and abilities of these two components of the modern staffing systems make them a great match for one another. I think there are several reasons for this including:

  • ATS providers are trying to remedy the fact that customers are frustrated with their inability to deliver quality.
  • More companies are starting to have an interest in learning about the value of assessment.
  • The overall level of experience with staffing technology has advanced to a level where integrating these two functions is getting easier.

No matter what the reasons, for those of us following these industries, the trend towards integration is hard to ignore. Despite the general sense that things are starting to happen, the way in which this will play out is not yet clear. This is to be expected given the relative immaturity of this marketplace and the level of fragmentation that has continued to define it. So while it is too early to be certain about how the integration of assessment and applicant tracking is playing out, given the existing state of things, I am guessing that we will see each of the following paths to integration over the next three to five years. End-to-End Services Companies are attempting to provide end-to-end services by offering both ATS and assessment products. Recently, we have seen ATS companies buying assessment companies and assessment companies buying ATS companies. This model allows the vendor to have complete control over the product and its integration and to sell on a “whatever you need, we’ve got you covered” model. The Pros:

  • One-stop shopping easy for customers
  • Increased customer control over ability to demonstrate value of the system using metrics and measurement
  • Increased ability to integrate the two systems more completely

The Cons:

  • Does not allow client much control over selecting system components
  • Many vendors don’t yet have a wide variety of assessment content available
  • This model requires vendors to assume the overhead of employing specialists to support implementation of both types of products.

Plug-and-Play Integration Companies are learning to integrate with one another. Some assessment companies are using experience gleaned from client implementation to create pre-configured plug-ins. This provides a large amount of flexibility such that both types of vendors can provide services in many situations. The Pros:

  • Provides customer with options
  • Allows providers to gain experience that can be used to improve products and services

The Cons:

  • No matter what, each situation has some differences that can’t be accounted for in an off-the-shelf integration
  • Not realistic for all vendor combinations to be accounted for

Strategic Relationships Companies are forming strategic marketing, referral, and sales-based relationships with one another. These may require custom integration work but these integrations are not productized. The Pros:

  • Allows a high degree of flexibility for all parties involved
  • Allows companies to avoid overhead by using the other vendor’s expertise and implementation support resources

The Cons:

  • Extra hands from different organizations can complicate the implementation process
  • Relationships often not based on substance or reality of which systems actually complement one another best
  • Can create revenue imbalance in the favor of the organization that initially brings in the business

CRM Tsunami Although it hasn’t happened yet, it’s a good bet that some of the larger CRM companies are eyeing this market and waiting for the right time to retool their products to meet the emerging demands. The Pros:

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  • These companies understand data and how to use it to support decision making
  • Large amount of resources to throw at creating new and innovative solutions

The Cons:

  • May not have assessment experience needed to really make a difference
  • Big company means big prices
  • Quality of implementation resources will be critical to success.

Light Functionality Some ATS companies are firmly locked into serving the middle market with tools that are effective without requiring a large amount of customization. Increased consolidation in this market segment will eventually involve the addition of assessment tools that are equally inexpensive and easy to implement. The Pros:

  • Provides an easy and affordable tool for companies that are not in the target market for big ATS providers but that can still benefit from ATS-type services
  • Less expensive and easier to implement

The Cons:

  • Lack of customization means sacrifice in efficiency for both ATS and assessment
  • Quality control over assessment product will be crucial to success (Many technical issues must be ironed out before assessment will be able to be deployed in a hands-off, scaleable manner.)

Totally Agnostic Some companies just let the market dictate how and with whom their services are coupled. This is certainly the simplest approach and in reality probably suits the way these things often happen. The Pros:

  • Customer has lots of flexibility
  • Does not force customer to use a less then optimal solution just because of a relationship between two vendors

The Cons:

  • Less experienced customers may need to look to vendor for ideas, recommendations, etc.
  • May make implementation process take longer and be less smooth
  • Does not promote innovation on the part of either vendor

I am going to avoid saying any one of these approaches is best or predicting which one will become dominant. At the end of the day, the best approach is the one that will get you the results you need. I do know that companies that make assessments and companies that make ATS software have DNA that is different enough that either will have trouble single-handedly building out both types of functionality. It goes without saying that a good partnership between ATS and assessment is one that will create and support a staffing process that provides users with a clear understanding of its efficiency and effectiveness in terms of measurable bottom line results. I believe that some form of integration is a must for making this happen. Finally, I think it is also important to note that vendors are not entirely to blame for the current problems with adopting the tools required to support effective staffing decisions. The burden for ensuring quality hiring must be shared by the organization. The continued inability of HR to gain support for staffing innovation from organizational leadership is a serious problem. Still, I want to keep this discussion positive by recognizing the progress that has been made over the past three years and encouraging all parties involved not to lose sight of our end goal: getting the right people into the right jobs.

Dr. Charles Handler is a thought leader, analyst, and practitioner in the talent assessment and human capital space. Throughout his career Dr. Handler has specialized in developing effective, legally defensible employee selection systems. 

Since 2001 Dr. Handler has served as the president and founder of Rocket-Hire, a vendor neutral consultancy dedicated to creating and driving innovation in talent assessment.  Dr. Handler has helped companies such as Intuit, Wells Fargo, KPMG, Scotia Bank, Hilton Worldwide, and Humana to design, implement, and measure impactful employee selection processes.

Through his prolific writing for media outlets such as ERE.net, his work as a pre-hire assessment analyst for Bersin by Deloitte, and worldwide public speaking, Dr. Handler is a highly visible futurist and evangelist for the talent assessment space. Throughout his career, Dr. Handler has been on the forefront of innovation in the talent assessment space, applying his sound foundation in psychometrics to helping drive innovation in assessments through the use of gaming, social media, big data, and other advanced technologies.

Dr. Handler holds a M.S. and Ph.D. in Industrial/Organizational Psychology from Louisiana State University.

LinkedIn: https://www.linkedin.com/in/drcharleshandler

 

 

 

 

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4 Comments on “ATS and Assessment: Where Are We Headed?

  1. I was a recruiter for 18 years and saw the tremendous need for objective assessment tools in making hiring decisions. So much so that I left recruiting and am now representing Profiles International. Inc. a premiere leader in the People Assessment business. We’re probably a few years away from tying in assessment tools to ATS systems in a cost effective manner but it’s coming! Any company that is not using VALIDATED assessment tools now is hurting their companies in a major way. The statistics supporting the use of Job Performance assessment tools, (and that does not include Myers-Biggs, PI, DISC or all the other non-validated, non-job performance tools), is so glaring that I can’t understand why companies are dragging their feet.

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  2. I would greatly appreciate it if you could draw a distinction between validated job performance assessment tools and tools such as Myers Briggs and Hogan HPI. I have been trying to use basic skills testing such as those for programming and accounting skills from Brain Bench. Our OD team says they are not validated for the specific job and can’t be used; however, they use the Hogan profiling tests on a regular basis to help select the final candidates. Apparently, I don’t understand the online testing dynamics. Your thoughts would be appreciated.

    Thanks – Dan

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  3. Another great article Charles- well thought out and presented.

    As to your question of which convergence model might offer the most utility or profit, it seems that several may be equally beneficial to customers and that none can be altogether avoided by winning vendors. From our position as a middle market ATS and wide market recruitment software, we encounter a range of customer needs that speak to multiple approaches.

    Strategic Relationships and Plug-and-Play Integration are obviously important, and to that end we are working with our own house XML and also the Assessment XML schema developed by HR-XML.org for use with developed content (ideally validated and proven content).

    We also believe that ATS systems must support seamless custom assessment because the world?s stock of existing (and deliverable) content will never entirely meet the need. An analogy would be to use only pre-developed dialogue throughout a verbal interview – possible, but not practical for anything but rote hiring for non-knowledge roles. As roles do change and morph, assessment needs to as well, and those cycles may not be concurrent. In plain English, our customers want to ask some of their own questions. We define Marketing as the total delivery of our solutions, and from a marketing perspective, we expect that offering easy data exchange and custom content tools will be the best way to ensure high value for the most customers.

    Up the ATS food chain, it may make better sense to buy content and domain expertise, but as noted, the DNA is quite different between ATS and Assessment firms and customer results may vary. Also, it?s hardly certain that ATS or Assessment could prevail- or CRM for that matter.

    Did anyone catch the item in the New York Times business section Sunday discussing successful off-shoring of drive through restaurant order takers? In that kind of world, staffing vendors of all kinds may find successful niches; from ATS to Assessment all the way to integrated HCM.

    Soon enough, we should have name-brand vendors who will meet with the boards of big companies, learn of the strategies envisioned, and outsource it from there, possibly contracting with individual business units- showing that if you outsource long and hard enough, like a Mobius strip, it could come all the way around!

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  4. As always, Charles identifies many of the key points when evaluating ATS versus Assessment processes/systems. Having used many of these products, we finally had to develop our own ATS in order to integrate our assessment testing platform with it and have the two systems work together.

    Charles? concern about companies using ATS product screening questions is legitimate, based on our experience. We just finished an analysis for a client using a well known ATS and our call center simulation, mental alertness, and job fit tests. We found that the higher the job candidate scored in the ATS questionnaire (meaning the more likely the employer felt they should advance in the hiring process because of their answers), the more likely they would actually be terminated in the job, or opposite of what the client thought would happen (r = .162; p =.022; N=200). The good news is that our analysis will help us establish better questions for the client. The bad news is that the client has been advancing wrong candidates in their hiring process.

    Certainly this is just one example, but it illustrates that screening and selection cannot be accomplished by just writing some questions based on hiring ?experience?. Careful process and data analysis based on well established legal guidelines should be followed.

    In terms of value, both ATS and assessment vendors will live and die by the same rules. For HR to be a strategic player, it will need to demonstrate that it provides financial value to the organization. ATS and Assessment vendors that can show that an investment in their solution will provide CFO certified value should win business and grow.

    Thanks Charles for nicely summarizing some of the key challenges facing applicant tracking and assessment systems.

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