The BIG Decision: Buy an Applicant Tracking System or Buy a Service? Some Thoughts & Guidelines

Most organizations have sought out some type of tool to help them manage and organize the administrative side of recruiting. Over the past decade, as applicant tracking systems have debuted and matured, the goal for many organizations has been to buy one. Almost all of these systems are client-server based and cost quite a bit. They also require a large volume of resumes to be economical and need support staff and expertise inside the organization. Many firms have between 2 and 10 people directly involved full-time with feeding and caring for the beasts. Smaller companies are left with simple, but often quite effective tools, such as GoldMine and Act and other contact management programs. While these tools do not have scanning capabilities and only rudimentary keyword searching, they can meet the basic needs of organizations that receive only modest numbers of resumes and do limited hiring. However, today everything is changing because of the Internet (what else!). I have written about numerous products that are emerging because the Internet, for the first time, allows vendors to develop software that either eliminates the client (which costs quite a bit and requires installation and maintenance) or allows the client to be much “thinner” and hence less expensive and easier to install and maintain. Many companies like Restrac, Resumix, Personic, Greentree, and others have created web-enabled tools that make the entire recruiting process more accessible and more customized to the needs of individual organizations. But, whether you choose a full-blown client-sever system, a web-enabled tool with a thin client, or a simple contact manager you have to buy, install, and maintain software and hardware. This can be expensive but there are many benefits, as well. The pluses of these systems are many: you own and control all the data which sits safely on your hardware within your buildings. You can set up whatever internal processing systems you desire and can use these systems to extract data in a wide variety of ways. If you have many recruiters, they all have access to the databases and can control distribution of data, add personal comments, and purge resumes and other data whenever they want. They offer security, speed, and predictability. But, what if you didn’t want to buy and maintain a system? What if you wanted to outsource the entire administrative side of recruiting – all the resume scanning, keyword selection, database maintenance, and reporting? What if you just wanted to buy a service that would give you access to all of this and you didn’t have to pay for hardware, software or people to run it? Well, there are a number of choices today. Each of them gets better all the time as technology, the Internet, and users become more sophisticated. Hire Systems is one of these firms. Owned by the Washington Post, it is a fast-growing supplier of outsourced recruiting administration via the Internet. It offers you a resume scanning service, a personnel requisition system for internal use, tools to post to job boards automatically, resume search capabilities and reporting for one monthly fee plus a price for each resume. Another company with a slightly different approach is called Interactive Search, Inc. or I-Search which was founded on 1994. It offers a variety of services including applicant tracking, resume input into your proprietary database, and management of your job postings on your web site. Both of these companies insist that your data is secure and protected, and I haven’t heard any complaints about their security. They both promise to quickly input all resumes and to have redundant hardware so that there are no “crashes” or “outages” in service. While these service-based organizations can save you money, they do have a downside. You do not directly control your resume flow and are subject to any delays that might occur in inputting the data into the system. You have to develop a strong relationship with these organizations and design systems for communication and quality control that are mutually sustainable and beneficial. And, obviously, there is always the possibility of a system failure or crash. Here are some questions to ask yourself. If you answer mostly YES, then think about purchasing a client-server systems such as Personic, Restrac, or Resumix. If you answer mostly NO to these questions, take a look at outsourcing options such as those offered by Hire Systems or I-Search.

  1. Do you have a moderate volume of resumes (<4,000/month) flowing in from a variety of sources (email, paper, your web site, and so on)?
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  3. Do you have an IT function with the personnel and hardware that can deal with client-server system?
  4. Do you need to have direct control over your resumes and database because of intense competition or government/ regulatory security requirements?
  5. Do you need to prepare a variety of custom reports, on-demand, frequently?
  6. Do you have administrative/clerical staff to scan and maintain an internal database?
  7. Are you prepared to make a sizeable investment in client-server software?
  8. Does your company want to integrate data and share it with enterprise software packages like PeopleSoft?
  9. Do you already have a sophisticated recruiting staff familiar with client-server systems?
  10. Is reliability and uptime a major concern? Would it be a disaster if your system were down for a few hours in a given week?

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for ERE.net, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at kwheeler@futureoftalent.org.

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