Building a Better ATS?

Applicant tracking systems are somewhat unique in the level of frustration and dissatisfaction they engender among users. The churn of clients between ATS vendors ó and the inability of any vendor to establish serious profitability or grow much beyond the definition of a small business ó is indicative of the fact that the industry has a long ways to go before it emerges from infancy. Applicant tracking systems have been around for some twenty years now, but they have failed to deliver on their promise of revolutionizing recruiting. These systems were supposed to make recruiting a more effective and strategic function. Unfortunately, much of this has not happened ó and based on current trends, it seems unlikely to occur. Why hasn’t this happened? The reasons can be grouped into ATS vendors’ shortcomings in three areas: vision, expectations, and standards. Vision Vision, or the lack thereof, is the principal problem facing most ATS vendors. ATS vendors have demonstrated an utter inability to expand the definition of an ATS beyond what the name requires them to do ó applicant tracking. Applicant tracking systems are essentially process management and reporting tools. Admittedly, recruiting is a lot about process ó but automating these processes does little to improve recruiting on its own. True, applicant tracking systems bring efficiency to the process. But they don’t bring much in the way of effectiveness. Gains through efficiency can only go so far. A floor is reached quickly, beyond which any improvements in time or reductions in cost are minimal. Also, this does nothing to improve quality. The industry in general, and some vendors in particular, would have users believe that adapting concepts such as supply chain management, client relationship management, etc., through their technology improves recruiting. This is mostly hype, as even a cursory examination of the claims would establish. Case studies of the value provided by an ATS, trotted out as proof, are little more than exercises in creative writing. The “results” are based on assumptions that make most theories in economics look like hard science. Further, the concept of “value” would not be accepted in any business. One manifestation of this problem is the recent emphasis on “sub-optimization” ó a convenient excuse designed to highlight a system’s presumed value by blaming under-utilization on users. With every new release, ATS vendors simply prove that they are afflicted by the “Microsoft Office disease.” Changes in functionality are sometimes interesting but are largely designed for demo value. Functionally, they are worthless for the most part. The undisputable fact is that almost no ATS delivers functionality beyond a very small aspect of recruiting. Though this myopia on the part of vendors is hard to explain, it is very prevalent. For example, in 2000, the INS (now Homeland Security) started a pilot program to allow employers to verify employment eligibility electronically. Given the volume of hiring taking place through applicant tracking systems, it would seem that supporting this service, even at a fee, would be an obvious way for an ATS to expand its value (and the vendors’ revenue streams). Yet not a single ATS vendor participated in the pilot program. Expectations The ATS industry and its clients together are a textbook case of misaligned expectations. There’s plenty enough blame to spread around to both users and vendors. The industry is partially to blame for having created expectations that are impossible to deliver on. With software products the temptation is always to over-promise and under-deliver ó but the ATS industry has plumbed new depths in this. The industry would like users to believe that their products are a silver bullet aimed at the heart of all recruiting problems. The problem is that recruiting is a far more complex process than most realize. The principal functionality in applicant tracking systems is centered on managing workflows as if they were linear, with predictable inputs and outputs. But as any recruiter will attest, recruiting is anything but linear. The inputs do not behave like so many components on an assembly line, and the outcomes are usually far from certain. With no hope of delivering anything that even comes remotely close to the promise, the industry has little choice but to put the best possible spin on what it offers and continue the illusion that the value provided is far in excess of the reality. But it takes two to tango. Users share in the blame for the misalignment. Few users grasp just how complex an activity recruiting really is and what needs to happen for it to become an effective, strategic function. Given the tangle of laws, corporate policies, the unpredictability of candidates, communication problems, and data requirements, it is extraordinarily difficult to create technology that can allow a user to effectively navigate through the complexity. Compounding the problem is the fact that recruiting is a profession still considered by many to be more of an art form than a discipline. Technology for such needs is difficult to engineer, but that does not deter users from believing that products can be developed to satisfy all their needs. Vendors can hardly be blamed for trying to fill this void between expectations and reality with their claims. The temptation to hype the value of products is made greater by the fact that there are few significant differences between products. Just as the success of Microsoft Office has little to do with functionality, the success of applicant tracking systems is more dependent upon positioning and marketing than it is on any intrinsic value. Shootouts at industry shows don’t count. As anyone who has attended one will attest, winning a shootout has more to do with the person working an application than the application itself. And of course, as every vendor knows, there will never be a long-term study comparing the effectiveness of their product against others. Standards The industry has no standards, period. Much of the dissatisfaction of customers could be addressed if the industry were to make its products compatible with other applications that support aspects of recruiting not supported by any particular ATS. Standalone products do exist to support most activities associated with recruiting, from sourcing to on-boarding. But the lack of technology standards, particularly for data exchange, makes it difficult if not impossible for these products to work together. Just establishing a stable link to move data from an ATS into a payroll system is a struggle for many vendors, as legions of customers will attest. Despite the clamor from customers to change this situation, the industry is strangely reluctant to do anything about it. Many vendors have actually made the situation worse by creating proprietary standards, as the many flavors of HR-XML that have been developed (and mercifully discarded in some cases) prove. HR-XML is an effort with some promise, but its acceptance has been limited. Many pay lip service to the concept by getting “certified,” but do little thereafter to have their products support the standard. Certification itself is largely meaningless, since it is simple to obtain and imposes no obligations on the vendor being certified to continue support for the standard. The result of this lack of standards is that customers end up with Rube Goldberg implementations involving a host of products, if they ever hope to expand support for their recruiting activities beyond process administration. What is perplexing is that virtually all shortcomings of ATS products are well known and have been for a long time. Postings in forums, blogs, comments at user groups, and speakers at HR conferences all lament the inability of the industry to move beyond a very narrow feature set. Yet there is no evidence to suggest that the industry plans to do much about expanding what it has to offer. Obviously the situation will improve (if only because it’s hard to see how it could worsen) with the advent of web services and a likely shakeout among vendors forcing the survivors to truly differentiate themselves. In two future articles to follow this one, I will address the specific limitations of applicant tracking systems and offer a few of my own suggestions on how the situation can be improved.

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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.

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7 Comments on “Building a Better ATS?

  1. Sometimes these columns on the perils of Applicant Tracking make me feel as if I’m reading the words of a Blacksmith warning everyone how all these horseless carriages would just be a flash in the pan, completely unable to give you the personal attention only a horse can provide.

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  2. I have got to kick this forum habit. I?m not going to post for the next week or two. But before I lay off, I can take a nice juicy dig into this article, which lobs up more slow pitches at once that I see in a normal month-especially since these are right down the middle of my profession.

    Where to start? Line one, I suppose.

    ?Applicant tracking systems are somewhat unique in the level of frustration and dissatisfaction they engender among users. The churn of clients between ATS vendors ? and the inability of any vendor to establish serious profitability or grow much beyond the definition of a small business ? is indicative of the fact that the industry has a long ways to go before it emerges from infancy.?

    We all know that there are lots of software programs and technologies that create dissatisfaction. And how much profitability is enough in a small ($500 million maybe?) market? And does industry consolidation always mean maturity? Nobody makes big money in hair care, but there are thousands of successful firms in the industry.

    ?Applicant tracking systems have been around for some twenty years now, but they have failed to deliver on their promise of revolutionizing recruiting?

    Who promised that? And who can say that the Internet has not revolutionized recruiting? How much of that would have been possible without some ATS help?

    ?Why hasn’t this happened? The reasons can be grouped into ATS vendors’ shortcomings in three areas: vision, expectations, and standards.?

    Hmmm, who says that vendors have the sole responsibility to make things happen? Many vendors hate change, especially successful ones, as change their positions.

    ?Vision or the lack thereof, is the principal problem facing most ATS vendors. ATS vendors have demonstrated an utter inability to expand the definition of an ATS beyond what the name requires them to do ? applicant tracking.?

    Uhhhh?.they wouldn?t be ATS vendors anymore, would they? Not saying that?s a bad thing- I personally think the industry is moving to more pure consulting on the high end and pure software engineering on the other side, but anyway?.

    ?Admittedly, recruiting is a lot about process?

    Is it about anything else?

    ?True, applicant tracking systems bring efficiency to the process?

    Uhhhh?..did I miss something?

    ?But they don’t bring much in the way of effectiveness. Gains through efficiency can only go so far. A floor is reached quickly, beyond which any improvements in time or reductions in cost are minimal. Also, this does nothing to improve quality.?

    How does one separate efficiency from effectiveness? I suppose a quarterback can be efficient and still lose, but does that speak to his or her skills, or the way they were employed?

    ?With every new release, ATS vendors simply prove that they are afflicted by the ‘Microsoft Office disease.’ Changes in functionality are sometimes interesting but are largely designed for demo value. Functionally, they are worthless for the most part. The undisputable fact is that almost no ATS delivers functionality beyond a very small aspect of recruiting.?

    Another contradiction here. If the industry is in it?s infancy, why do its products display the qualities of maturity? All mature technology seeks only small improvements- planes still fly at around 600 MPH, cars still run best at 80 MPH, phones still transmit the human voice?.. It?s not indisputable that modern ATS systems don?t deliver- who would consider running a sizable staffing effort without one?

    ‘Though this myopia on the part of vendors is hard to explain, it is very prevalent.’

    It?s not hard to explain if its not there. All the major vendors know what the general feature set of a top shelf ATS is. The differences are in ways and means of delivering those features to end users.

    Regarding the Homeland Security Pilot- ?it would seem that supporting this service, even at a fee, would be an obvious way for an ATS to expand its value (and the vendors’ revenue streams). Yet not a single ATS vendor participated in the pilot program.?

    Is it just possible that the marginal costs would exceed the marginal value, and thus vendors did not use resources to do it? If clients made the demand, vendors would fulfill it (that?s the way business works usually). Vendors can, of course, create demand, but nearly always at great risk and expense.

    ?The ATS industry and its clients together are a textbook case of misaligned expectations. There’s plenty enough blame to spread around to both users and vendors.?

    Glad to know it. A few grafs ago, it was all the vendor?s fault. We have evolved!

    ?The industry is partially to blame for having created expectations that are impossible to deliver on. With software products the temptation is always to over-promise and under-deliver ? but the ATS industry has plumbed new depths in this.?

    Uhhhh?..I think that?s capitalism in a nutshell.
    I bought some Coors beer last night, but no sexy twins have yet to appear. Where do I write to complain?

    ?The industry would like users to believe that their products are a silver bullet aimed at the heart of all recruiting problems.?

    Yup, Coors does the same thing there too!

    ‘The problem is that recruiting is a far more complex process than most realize. The principal functionality in applicant tracking systems is centered on managing workflows as if they were linear, with predictable inputs and outputs. But as any recruiter will attest, recruiting is anything but linear.’

    Actually, good systems adopt to non-linear flows. This is where CRM practice actually is valuable and contributes to better recruiting software. And I have yet to read about a distinction being made between ?Recruiting? and ?Applicant Tracking?, which are really two totally different disciplines.

    ?It is extraordinarily difficult to create technology that can allow a user to effectively navigate through the complexity. Compounding the problem is the fact that recruiting is a profession still considered by many to be more of an art form than a discipline?

    Finally, something I can agree with!

    ?Just as the success of Microsoft Office has little to do with functionality, the success of applicant tracking systems is more dependent upon positioning and marketing than it is on any intrinsic value.?

    Hmmmm?. I?m writing this on MS Office, and I can count on sending a Word doc anywhere and having it read, and SOMETHING has to translate my thoughts into bits and bytes?. Gonna have to disagree again on this point. Is there any product in any sphere not dependant on positioning and marketing?

    ?The industry has no standards, period.?

    ?HR-XML is an effort with some promise, but its acceptance has been limited. Many pay lip service to the concept by getting ‘certified,’ but do little thereafter to have their products support the standard?

    Am I missing stuff again?

    Excel Sheets, Word Docs, Outlook emails, and ODBC certainly are standards in daily use with ATS systems. The EEOC and OFCCP, as well as a serious number of legal cases do tend to establish a framework we all share.

    ?Just establishing a stable link to move data from an ATS into a payroll system is a struggle for many vendors, as legions of customers will attest?

    I have never had a client who could not move data from a Microsoft database to another common format. This might have been a problem in the early 1990?s, but is this really something to get worked up over?

    ?What is perplexing is that virtually all shortcomings of ATS products are well known and have been for a long time.?
    How can this be reconciled with a ?lack of vision? ? I?m spun again.

    ‘Postings in forums, blogs, comments at user groups, and speakers at HR conferences all lament the inability of the industry to move beyond a very narrow feature set.’

    Customers have decided on the feature set. When customers demand more, more will come. Customers make demands with money. Apparently, customers have decided that they have better things to do with their money than to demand more features with it. This seems extremely simple to understand.

    ?Obviously the situation will improve (if only because it’s hard to see how it could worsen) with the advent of web services and a likely shakeout among vendors forcing the survivors to truly differentiate themselves.?

    Glad to finish up on a strong note- I agree that web services will go a long way to separate consulting players from software vendors. Its happening now- but ?standards? are the sine qua non of web services, so I guess we are gaining some after all.

    ?In two future articles to follow this one, I will address the specific limitations of applicant tracking systems and offer a few of my own suggestions on how the situation can be improved.?

    Well, that was a satisfying review. But this one is too easy. I?m not sure I want to play again.

    I hope the next levels are a little more challenging. And not too soon, I HAVE to get some real work done!

    With Best,

    Martin

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  3. If the promise is to ‘revolutionize’ recruiting, then every ATS will fail. I really can’t see that recruiting has changed all that much. It is the human side that stays the same and only the tools evolve. I think recruiting is evolving, getting better as an art form. I don’t think it requires, or will display, a revolution.

    Some may say that ‘the internet has revolutionized the recruiting industry.’ I say it has only changed our tools to some extent. We still have to deal with people the same as ever. We used to use the newspaper and the telephone, now we use the internet and email. Big deal! They are just tools. An ATS is just a tool. Some are better than others. If ATS systems have failed to deliver on the promise, then perhaps the promise was just hype in the first place.

    Don’t get me wrong. I use an ATS (cBizone), and I like it. I also use email more than the phone. But, the real recruiting is done with personal skills and the intellect, not the tools.

    Just my 2 cents.

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  4. My interest is a variation of this article topic.

    I’d like to connect with folks who have used online business networking tools, like LinkedIn.com or Ryze.com, from a recruiting perspective.

    I’m particularly interested in your opinions about what you like, or dislike, when you use these networking tools for ‘applicant search and discovery.’

    All observations shared with me will be considered as market insights. FYI, I’m researching and writing a white paper for the GeoNetworker International project at http://geonetworker.webhop.net

    I thank you for your consideration.

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  5. Based on my experience in Australia as the user of an ATS as well as vendor of intelligent matching software at the same time – we should not blame only one side of the supplier-buyer relationship for the mediocre results.

    While ATS vendors are not most innovative bunch – as many of them actually never worked as or with recruiter – customers, like agencies and HR departments have not shown much of the vision and innovation as well.

    As most of us agree, HR departments and recruiters are typically tactical players and as such do not seek revolutionising solutions – rather practical, efficiency orientated tools to manage their workflow. Their lack of strategic view on the problem has also significantly contributed towards the sate of the recruitment industry as it is now in relation to efficiency, quality and tools which have been made to satisfy the needs.

    Hence, on one side ATS vendors should start evolving and innovating on principles of ‘user centric’ computing, while their users should re-think they way recruitment process is designed and structured and be ready for significant changes.

    Might be that our belief how ?recruitment really did not change? is one of the major obstacles in moving forward at faster pace? Deliverables and requirements did not change, but the way how those are conducted and articulated is. It has been never faster, more demanding and less forgiving!

    And let me conclude that next step will not come without an extra spend on one side and investment on the other.

    Hopefully not all of that sped will be on marketing!

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  6. In response to your query about using networking sites for recruiting, I have an ABC list of my experience:

    A. Activity is the key. I typically use Ryze and other networking sites to develop my professional knowledge and work on my volunteer/non-profit interests. If you work the connections and develop the tools on the site, you’re more likely to see results.

    B. Be contacted. As a result of actively participating in forums and groups, I have been contacted by several candidates directly. My company has not made any direct hires just yet, but does consider the folks who approach me.

    C. Consider it Connecting, not closing. It’s another avenue to connect with individuals. If you are skilled at networking to begin with, then tools that facilitate this can greatly develop your candidate base, but just signing up for one is not going to close you candidates.

    In the end it is a decision that you have to make, is it worth your time? Will you be likely to find that golden candidate? Possibly.

    -palmer-

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  7. Nik,

    Thanks for sharing your thoughtful insights. FYI, having researched various business networking sites, and interviewed some of their users, the most common issue we hear is ‘I became a member, but nothing happened.’ The most common cause for people not being found — they don’t understand the significance of carefully choosing key words, and then writing a comprehensive profile.

    DHD

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