We interrupt our program of Celine Dion’s greatest love songs to bring you a special bulletin. At twenty minutes before eight, central time, Professor Farrell of the Mount Jennings Observatory in Chicago reports observing several Human Resource Information Systems vendors descending very quickly and aggressively on the Applicant Tracking industry. Professor Pierson of the Observatory at Princeton confirms Farrell’s observation, and describes the phenomenon as “like a large, rabid wildebeest jumping on a sleeping kitten.” And now, back to the theme song from Titanic. Unlike Orson Welles’s famous “War of the Worlds” broadcast very loosely paraphrased above, there actually is an invasion going on. Human Resource Information System (HRIS) vendors ó SAP, Peoplesoft, Oracle, Lawson and others ó are working on infiltrating the applicant tracking space as we speak. But before everyone runs to their bomb shelter, breaks out the canned goods, or buries their Britney Spears CDs in a time capsule, there are a few things that make the current invasion much less likely to succeed. 1. The HRIS vendors have a long way to go before they become real recruitment solutions providers. It’s important to note that the HRIS vendors are currently light years behind the applicant tracking system vendors in several areas. Many of the major shortcomings can be seen in the candidate interface. I won’t name the vendor (you know who you are), but I recently spent a couple of hours talking with an HRIS client’s business analysis and implementation team. They asked me to discuss any issues one might encounter with the applicant tracking component of their system. And I found one. A major one. I literally could not figure out how to complete my online application. What I did complete ó much of it likely unusable for the recruiters that would receive it ó took approximately 45 excruciatingly painful minutes. During the process I discovered that it was physically impossible to enter my college correctly in the required field, unless I knew that my school was called “Univ of Iowa” in the system and searched for that exactly. If I were a real job seeker, I would have given up less than a third of the way through the process. The job search interface was quite interesting as well. Imagine a keyword search that only searches the job title text (but doesn’t tell you that). Then imagine job title text that only allows a set number of characters, so few that it necessitates abbreviations in most job titles. Now imagine trying to find a job that is of interest to you in this scenario. Unless you have the foresight to enter “Recrtmt Ops Mgr” in the keyword search field, your search will come up empty. On the recruiter side, a somewhat arbitrary ranking system exists that depends entirely on data collected in the manner above. My overall conclusion was that if this is the best they can do right now, they’ve got a long way to go before they are considered a serious competitor in this space. 2. Most HRIS vendors don’t understand how to deliver an ASP product yet. Traditionally, HRIS vendors have delivered their solutions on client/server platforms where you host the hardware and software and users (clients) download a software program that links them to the servers. Their lack of expertise in the ATS space has become painfully obvious when they have tried to deliver solutions on an ASP (application service provider) platform, in which the vendor hosts all of the hardware and software and users access it through a web browser. One prominent HRIS vendor had a wild ó and short ó ride in the ATS market. After their customers complained of system instability, lack of training, complex requisition creation, character limits on job descriptions, and even a lack of integration with their own HRIS product, they took the ASP version of their product completely off the market. From afar, they thought getting into the ATS space was a great idea, but when they got there they realized that, by implementing a poorly created product, they would only cause harm to their overall reputation as a solutions provider. 3. HRIS vendors are not yet delivering the support recruiting teams expect. Think for a moment of a very, very long food chain. You’ve got your IT department at the top, then some big whales, followed by mid-sized, small and then tiny fish, and then a bunch of very minute plankton. Right below that, you’ll find most recruiting teams. That’s how far down the food chain recruiting is in terms of receiving I.T. support. Most applicant tracking solutions are not at all supported by the IT department, and there is rarely an experienced business analyst who steps in to translate requirements to features in the initial planning stages. In true Darwinian fashion, recruiting teams have adapted and evolved to deal with this harsh environment. Recruiting software providers have also adapted by providing levels of support that client/server vendors typically leave to a company’s IT teams. One ATS consultant refers to it as the difference between “in-sourcing” and “outsourcing.” HRIS vendors are used to helping companies build support teams internally to work with a given software solution and customize it to their needs, while ATS vendors deliver a fully outsourced applicant tracking solution. It is therefore not possible to treat an ATS as a typical “in-sourced” software solution. Throwing out technical support and implementation teams with little to no knowledge of recruiting is a true recipe for disaster. The HRIS vendors are learning this the hard way. Recruiters are loud. They will complain. They will make their IT department painfully aware of the shortcomings of the system. And that will reflect very poorly on the other solutions that vendor has implemented, weakening their overall customer relationships. 4. The HRIS vendors have fewer resources dedicated to product development. You’ve probably heard a lot from Wall Street lately about their desire to see companies refocus on their core competencies. Wall Street reasons that companies have been stretched too thin, trying to do too many things at once and suffering proportionately in their core, more profitable business lines. The enterprise application and HRIS vendors are also stretched very thin. Their solutions range from payroll and benefits administration to customer relationship and even financial management. While the larger enterprise ATSs like Hire.com, Recruitmax, Recruitsoft, and Deploy Solutions ó the HRIS vendors’ primary competitors ó often have over a hundred developers focused on product development, the HRIS vendors typically struggle to get dedicated resources assigned to their recruiting products. This will make change a very powerful asset to the current crop of ATS vendors. If the pace of change is accelerated, the HRIS vendors will simply not be able to keep up. What Does the Future Hold? This is no time for panic in the ATS industry. For the reasons stated above and many more, the threat posed by the HRIS vendors in the short term is minimal. To date, their appeal has been limited primarily to IT departments that have allowed them to “bundle” their solutions together with many other, much more expensive solutions without doing much due diligence with their recruiting teams. In the long term, the threat of the HRIS vendors taking over the ATS industry is only real if they devote more resources to the task of recruiting automation or purchase a major player already in the space. For now, I’ve got some unsolicited advice to dispense for everyone involved. To recruiting teams: Stand up for the system that will meet your needs. Prepare detailed lists of requirements, and only choose an HRIS vendor’s product if it truly meets those requirements. If you doubt your own ability to come up with a list of requirements and features, enlist the help of someone who can. Don’t back down from an IT department that thinks they know better than you do what your needs are. You will use the system, not the IT department. To the ATS vendors: Don’t rest on your laurels. Don’t panic either; other industries like payroll processing continue to thrive despite the presence of these same vendors. Minimize the long-term threat to your business by evolving quickly and strategically. Put yourself in position to demonstrate and quantify your ROI. Act as a business partner and a solutions provider, not just a software vendor, by delivering more than software. To the HRIS vendors: Do it right or don’t do it at all. Don’t put your existing customer relationships at risk with a poorly designed product. Don’t rely solely on IT teams making ill-advised decisions for the recruiting team. Closely examine if the rewards of an ATS product justify the risks. And beware the wrath of the frustrated recruiter!
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