You’ve probably heard of Applicant Tracking Systems (ATS). But does it actually matter which one you use?
It’s well known that the competition for top talent has never been tighter. Factors like a rise in freelance jobs, automation, artificial intelligence, and a trend towards highly specialized workforces mean that companies and recruiters are competing harder than ever for the best talent on the market.
At the same time, Gen Y is following closely on the heels of Millennials as part of a new wave of young people entering the workforce. These demographics are digital-native, and the means by which they find, evaluate, and accept jobs is different from their predecessors.
Consider, for a minute, these staggering statistics about the recruitment market in 2020:
- 79% of candidates use social media in their job search.
- Recruiting via social media is growing with 84% of organizations using it currently and 9% planning to use it
- 91% of employers are using social media to hire talent, today.
- 80% of employers say social recruiting helps them find passive candidates.
- Employers believe that social media marketing will be the most in-demand HR skill by 2020, followed by Data Analysis and Predictive Modelling.
- 89% of those who are job-hunting believe that mobile devices are a crucial part of the job-seeking process
These six stats alone show that candidates have more options than ever to find and apply for jobs. They expect a mobile-friendly experience and they want the process to be completed quickly.
At the same time, the best talent is being snapped up almost immediately and it can be incredibly expensive to fill open positions. Top this off with the fact that there has never been more data available about candidates, or more information to sift through on a daily basis to make hiring decisions.
So yes, your ATS does matter.
And ensuring you know exactly what it does, what kind of features it should have, and how it can power up your hiring, will set the foundations for smarter, faster, and more efficient recruitment.
A brief history of the ATS
Before we dive into what an Applicant Tracking System is, it’s important to understand how they came to be, and why.
An ATS was originally a simple system that helped recruiters scan paper resumes into a database for the purpose of sorting and screening them. Before these systems, recruiters would manually collect, organize and parse through each resume that came across their desk.
Sounds exhausting and tedious, right?
Well, it was. And that’s why a digital solution was created. Having a digital repository of resumes and applicant documents helped HR teams organize candidate information more efficiently and enabled compliance with labor and data storage regulations.
(Oh and by the way, we shouldn’t forget that there are still a lot of companies out there in the pre-ATS age, managing their applicant tracking in an excel template. If this is you, definitely keep reading on.)
As the ATS evolved, it began to morph into a light version of the Candidate Relationship Management (CRMs) we see today (we’ll talk more about those later). These slightly more advanced Applicant Tracking Systems offered very basic resume screening capabilities, and could simplistically track an applicant’s path through the hiring process.
This evolution has continued into the modern ATS platforms we see today, which have become an integral part of recruitment activities like:
- Building an employer brand;
- Smarter application forms;
- Parsing resumes;
- Scraping and storing candidate information;
- Scheduling interviews;
- And more.
The evolution of the ATS is thanks in large part to the great strides made in big data, AI, and processing technologies, not to mention the introduction of cloud computing.
Now that we’re up to speed with where the ATS is in its evolution, let’s take a look at what a modern Applicant Tracking System is and what it can do.
What is an Applicant Tracking System?
First, it’s important to understand what an Applicant Tracking System is, in the modern sense of the term. There are a lot of different definitions out there for an ATS but, essentially, it can be summed up as follows:
An Applicant Tracking System is a software application that enables the electronic and automatic handling of a variety of different recruitment needs with the goal of making the process more effective for the recruiter and candidate.
Generally, more powerful ATS platforms are cloud-based SaaS (Software as a Service) solutions, meaning they can be accessed anywhere and at any time. Specific features will vary depending on the ATS platform and the type of business it caters to.
The three primary business types that ATS software serves are:
- Enterprise-level companies
- Recruitment agencies
- Small or medium-sized businesses (SMBs)
The scope and complexity of specific ATS platforms – as well as the cost – will vary depending on what type of business it caters to. On-site and SaaS solutions will generally be more expensive but will offer significantly more features and services than open-source options.
To give you an idea of how prevalent and effective ATS platforms are in recruitment today, consider these stats:
- 99% of the Fortune 500 use an ATS to filter resumes, as well as 70% of larger companies, and 20% of SMBs.
- 75% of recruiters use a recruiting or applicant tracking system.
- 94% of recruiters say their ATS has positively impacted their hiring process.
The ATS definition included above is worded broadly, because the capabilities of these modern systems affect virtually the entire recruitment process, especially:
- Candidate sourcing – automated job posting, application pages that integrate into the candidate database, and employer brand management.
- Candidate management – automatic uploading of candidate information and application documents into a central database, appending scheduling and screening information to candidate files, perpetual storage of current and former candidates to generate talent pools.
- Pre-screening candidates – keyword parsing of resume and cover letters, automated screening of unqualified candidates, automated outreach and interview scheduling.
- Screening candidates – managing and hosting online tests and video interviews, storing and appending screening results to candidate files, a collaboration between recruitment team members on candidate profiles.
- Extending job offers – generating and sending offer letters, collecting signed documentation and appending them to candidate files.
- Employee onboarding – assigning onboarding materials, tracking completion, ensuring all compliance documentation is completed.
- Recruitment process optimization – intelligence and metrics into every step of the recruitment process, allowing recruiters to identify bottlenecks and make efficiency changes.
The ATS features listed above reflect only the most common capabilities available on most platforms today. There are many more that recruiters will discover once they integrate an ATS into their recruitment process.
What is the primary purpose of an applicant tracking system?
The primary goal of an Applicant Tracking System is to simplify the recruitment process and to make it more effective and efficient. This is accomplished by giving recruiters access to a powerful, centralized platform on which to collect and view applicants, track their progress, and filter them out based on their qualifications.
Applicant tracking system process flow
To accomplish this efficiency, ATS platforms follow a consistent cycle for collecting, processing and reporting on candidate data. This cycle typically looks something like this:
- Job is created
- Job is published to the company website and/or job boards
- Job seekers apply
- Applicants are screened
- Interviews are conducted
- Applicant is hired
At each stage and handoff, the ATS is automating the most tedious and repetitive tasks for the recruitment team. This frees them up to make more important and impactful decisions on who to interview and hire.
Now that we’ve covered what an Applicant Tracking System is, and how they work, let’s talk about how they fit into the recruitment process.
How does an applicant tracking system work in the recruitment process?
Applicant Tracking Systems are continuously active, automated platforms that are integrated with virtually every stage of the recruitment process. The full breadth of how an ATS works can only be understood by breaking this scope down into each of the stages of recruitment outlined in the previous section.
ATS in candidate sourcing
A typical ATS on the market today will impact the candidate sourcing phase of the recruitment process in the following ways:
- Building and managing application pages and forms,
- Posting job ads, and
- Enabling employer brand management.
ATS platforms enable recruiters to create unique job descriptions and application forms for each vacancy they have. These pages are then placed on the ATS-driven careers page, where candidates can apply for the posted position.
Through this process, the ATS essentially acts as the first point of contact, or “storefront” for candidates when they find and apply for a job. Applicant contact information and supporting documentation is collected through these forms and funneled into the candidate database for review.
In addition to posting jobs, ATS platforms are also integrated with most of the major job boards and social media websites that candidates use during their search. Through these integrations, recruiters are able to post a large number of recruitment ads to a wide range of sites at the click of a mouse. Again, applicants are funneled through the ATS application page, after which their information is sent to the central candidate database.
Finally, many ATS platforms offer turnkey solutions to create and manage the company’s careers page, employer brand, and wider candidate experience. This integrates with the trend of recruitment marketing, and enables recruiters to continuously monitor and improve their branding and image.
The best example of this optimization relates to the need for a mobile candidate experience. As mentioned earlier, there are now two generations of candidates in the workforce who grew up as digital natives.
Consider some of these stats around the need for mobile candidate experiences:
- Millennials check their phones more than 150 times per day! This is five times higher than the average adult.
- Almost 9 in 10 job seekers plan to use their mobile phones to search for jobs.
- Only 13% of companies use mobile technology for recruitment and candidate management.
- Only 25% of all job candidates rated their candidate experience as great.
Clearly, there is a lot of room for improvement in the industry, and growing demand for mobile-friendly candidate experiences. Many ATS platforms today have identified this need, and offer a fully mobile-optimized experience at each stage of the application process.
ATS for candidate management
Once candidates have applied through one of the ATS-driven channels, a profile is automatically created for them within the database. This profile contains all of the information they provided in their application, as well as anything that is generated later in the recruitment processes.
As the candidate works their way through the recruitment process, information and tags will be added to their profile to indicate their status and qualifications. Even if unsuccessful, candidates will remain in the ATS database, allowing for future consideration.
This process is called creating a talent pool and is an invaluable asset for recruiters. As we’ll see later, this passive candidate data is invaluable when paired with a CRM platform to nurture inactive applications.
ATS in pre-screening candidates
After a profile has been created, the ATS will automatically go to work parsing through the information to determine if the candidate meets basic requirements to move on to the screening phase. This relates directly back to the original intent of ATS platforms and is one of the most significant ways that they help decrease workloads and improve recruitment efficiencies.
At a basic level, an ATS can automatically leverage keyword and Boolean search principles to scan resumes and cover letters for specific skills, experience, education, and so on that are specified by the recruiter. Modern ATS platforms have begun to integrate AI tools and natural language processors to dig even deeper into candidate information at speeds previously unavailable to recruiters.
Once completed, recruiters will be given a list of only the candidates who met their specific basic criteria. This saves a significant amount of time on manually parsing through resumes, enabling recruiters to take on more important roles.
To put this into perspective, consider these stats:
- 50% of job hunters don’t meet the basic requirements for the jobs they’re pursuing.
- Nearly 75% of resumes never see human eyes, because they don’t meet basic requirements.
- Companies receive an average of 250 applications per job opening.
ATS platforms take the burden of manually weeding out these unqualified candidates, letting recruiters focus on the truly great applicants. It’s easy – and scary – to imagine the amount of wasted time that would be caused by manually sifting through and eliminating all of those unqualified candidates. Automating this phase dramatically reduces churn and unproductive time, enabling the recruitment team to focus on overall efficiencies and process improvements.
Once the ATS has done its pre-screening job and given the list to the recruiter, those applicants are then pushed to the screening phase.
ATS in screening candidates
Some platforms, like Recruitee, also include modules that host online job tests, or run video and phone screen interviews directly through the application. In these cases, the ATS platform is able to record the results of these screening activities, and automatically append them to the candidate profile.
Another benefit of some ATS platforms is that they offer a portal for collaborative hiring, bringing together the recruitment team, management group, and future colleagues. People who are important to (but often excluded from) the decision process can play an active role in reviewing candidates and sharing their opinions.
Each of these capabilities enables the candidate to move seamlessly through the candidate experience, takes tedious administrative tasks away from the recruiter, and generates greater transparency around screening decisions.
ATS in managing job offers
Once the recruiter and hiring manager have made a decision on who they want to hire, ATS platforms allow them to move quickly on extending a job offer. This is critical in locking down your candidate of choice, as statistics show that most job seekers accept the first offer they are given. Recruiters who drag their feet or go radio silent at this stage – even for a few days— are at great risk of losing their chosen candidate, and wasting their hard work.
To combat this, ATS platforms are able to generate templated job offers (already cleared by legal) instantaneously. All the recruiter and hiring managers have to do is fill in the agreed upon terms, and hit the send button. If a candidate is given and accepts verbal confirmation of a job offer, and then receives the documentation on the same day, then they’re far more likely to take that final leap of signing off on their new job and salary.
Once the offer has been signed, all of the important recruitment and onboarding documentation is automatically added to the now-employee file within the ATS, eliminating the need for physical documents or files floating around the shared company drive.
ATS in onboarding
Once a candidate has been hired, an ATS can be used to assign and track the progress of basic onboarding activities. This can apply to basic company-wide onboarding or role-specific onboarding activities. Specific tasks and deadlines can be tracked within the ATS to ensure that the new hire is on track.
Studies show that candidates who receive proper onboarding are 69% more likely to stay with a company for three years or more. It’s well known in recruitment that proper employee onboarding is critical to retention and performance. ATS platforms help manage the administrative side of this mission-critical activity.
ATS in process optimization
At each stage of the recruitment process that was just outlined, ATS platforms are generating data and insights into a wide range of different metrics. This can be anything from which sourcing platforms are performing the best, to how long certain steps are taking, to how much the whole process costs.
Most ATS platforms today offer robust, visually-driven reporting platforms that can be used to measure and track a wide range of KPIs common to recruitment today. This reporting capability enables recruiters to identify bottlenecks in their process, inefficiencies in their sourcing, and spots within the workflow where they can find room for improvement.
The data-driven nature of ATS platforms is the most powerful feature available to recruiters today. There is no need to guess anymore if certain techniques are or are not working. ATS platforms give recruiters access to a wealth of continuous data that can and should drive their hiring decisions and processes.
Which begs the question – how does an ATS compare to other common recruitment software tools?
How does an ATS compare to other recruitment software?
Applicant Tracking Systems are just one of a whole suite of recruitment tools available to hiring teams today. And, recruitment software is only a small subset of the massive human resource management market that has exploded with technological improvements and the rise of big data.
To clarify what is meant by recruitment software, and where ATS platforms are positioned within this umbrella, it’s important to understand what these tools aim to accomplish.
Recruitment tools generally focus on the following pillars:
- Workforce planning: creating pools of internal and external candidates.
- Sourcing: job ad management, promotions, and social media engagement.
- Candidate acquisition: referrals management, screening, assessment, and candidate selection.
- Applicant tracking: interviewing, background checks, candidate communications.
- Onboarding: scheduling meetings, managing orientations, and training.
- Analytics: reporting on recruitment data and metrics.
To put into perspective just how large the demand for recruitment software is, consider that talent acquisition platforms are the most important and in-demand tool. The global digital talent acquisition market is expected to grow from $22m in 2020 to $33m by the end of 2025. There are more than 400 solutions for hiring and that number is continuously growing.
An ATS platform – depending on its size, scope, and complexity – can help accomplish all or some of the above “pillars” of recruitment, making them an integral part of this market.
Recruitment software – and ATS platforms in particular – are generally broken into the following buckets:
- Cloud and SaaS solutions. The software, support, and data storage are all stored off-site in the vendor’s secure systems.
- Integrations and suites. Recruitment tools are added as modules within a large HRIS system, integrating with the wider human resources platform at the company.
In addition to these two main infrastructure buckets, ATS platforms (and recruitment software in general) are often broken into tiers that reflect the type and size of the company that they are geared toward.
The most common ATS tiers are:
- Enterprise. The ATS is usually a subset of large-scale HR or ERP systems.
- Agency. Often similar to Enterprise in configuration, but require large amounts of storage for the various clients and industries inherent to agency recruitment.
- Small- and medium-sized businesses (SMBs). Simple and more economical solutions to recruitment automation.
In general, ATS platforms represent one of the most widely used turnkey solutions found within the recruitment software umbrella. The variety of options available to HR teams means that there will almost always be a recruitment tool that matches a company’s cost and abilities requirements.
It’s interesting to note, though, that the recruitment tool most often compared to the ATS is Candidate Relationship Management (CRM) platforms. This is another popular recruitment software and one that is typically used in tandem with an ATS platform.
ATS and CRM: two sides of the same recruitment coin
While ATS platforms are becoming more and more sophisticated, they are generally still seen as a repository for applicants and tools that help to manage the application process. They often meet an internal compliance requirement and are the system of record for candidate information and workflow management.
A CRM, on the other hand, is a system for both recruiters and job seekers, one that helps hiring teams build and nurture relationships with passive and active talent. They are typically used to create and nurture talent pools and serve as an intelligence hub for hiring teams to find and re-engage existing applicants.
Put differently, an ATS platform is built to make selecting and hiring candidates as streamlined as possible by eliminating tedious administrative tasks and systematically improving on core recruitment metrics. CRM systems work in tandem to scale a recruiter’s sourcing efforts by engaging and attracting passive candidates before they are even needed.
Many recruitment teams, therefore, use both an ATS and CRM as two sides of the same recruitment coin. Together, they are able to attract and engage passive candidates, help make the recruitment brand stand out, streamline competitive job offers, and make for generally faster and more engaging customer experiences.
Understanding the recruitment landscape of today goes a long way to understanding why recruitment software is integral to successful hiring. Hiring teams, now more than ever, need to be fully aware of the candidate experience and strive to continuously improve it for applicants.
Between 70% and 80% of recruitment happens at the pre-application stage, so it’s critical that recruiters are showcasing the right message and experience to stand out from the competition. This constant need to measure success and adapt intelligently to change is made possible thanks to powerful platforms like the ATS, and its close sibling, the CRM.
Benefits of an Applicant Tracking System
The benefits of an automated Applicant Tracking System (ATS) become abundantly clear when taking into consideration the daunting recruitment market that we find ourselves in today. 73% of employers are having difficulty finding skilled candidates at the moment and 45% of them are concerned about finding employees with the necessary talent.
On top of that, never has it been more time-consuming and resource-intensive to find and hire the best talent, especially for the most in-demand positions.
An overabundance of options for sourcing and screening new candidates – not to mention the data inherent to those processes – has led to recruiters adopting powerful recruitment technologies to alleviate some of the workload.
So, before discussing what the benefits of an ATS are, it’s important to first look at why recruitment technology is needed in the first place.
Why use an Applicant Tracking System?
The answer to “why” recruitment software is necessary is twofold.
First, it lessens the amount of repetitive and tedious tasks a recruiter must complete, freeing them up for more important duties.
Second, automated systems allow for an overall better recruitment experience and results for the company and the candidates.
Here are some of the primary reasons that modern recruitment software is necessary in today’s hiring landscape:
- They improve the quality of a company’s hire and good hiring is one of the best predictors of a company’s future success.
- HR departments and managers are struggling to find and retain top talent. Recruitment software is a powerful weapon for helping to minimize this stress.
- Poor HR technology has been the norm. Advances in technology have leapfrogged recruitment software to the top of the SaaS market, to the benefit of hiring teams.
That last point is one that is a major driving force behind why more and more companies are adopting modern ATS platforms. As explained earlier, an ATS was originally just a platform on which to store digital copies of resumes and cover letters. They lacked the ability to automatically parse through that information and deliver usable information quickly to recruiters.
This ability to not only digitize but to automate and enhance the entire recruitment process is thanks to cloud computing, AI and more powerful processing technologies. ATS platforms – and recruitment technology in general – is at the center of this renaissance, leading to an abundance of benefits for companies worldwide.
18 benefits of recruitment technology
While this section focuses on ATS platforms, many of its benefits are shared across the other recruitment technologies on the market today. We’ll take a look at all of the many benefits that recruiters receive from implementing, executing, and maintaining an ATS tool in their HR department.
These benefits can be broken down into the following categories:
- Decreased workload
- Improved candidate experience
- A more efficient recruitment process
- Better hiring results
Let’s dive into each one.
When deployed correctly, an ATS platform can benefit recruiters and hiring managers in the following ways:
1. Automatically upload recruitment ads to numerous sites in one click. Dramatically decreases the amount of time spent manually creating and posting ads.
2. Collection, storage, and aggregation of candidate information is automated. All data that the candidate provides in the application, plus information readily available on the internet, is automatically scraped and stored by the ATS, taking that burden off of the recruiter.
3. Automated or keyword-based parsing of resumes and cover letters reduces applicant pool quickly. Removes the need for recruiters to manually sift through piles of unqualified candidates. The ATS handles pre-screening and identifies qualified candidates based on parameters pre-determined by the recruiter.
4. Scheduling interviews directly with the candidate. Automated emails from the ATS the time-consuming task of reaching out to each candidate and finding a time to meet.
5. Recording results of the interview and other screening activities. All screening information is centralized to the candidate profile within the ATS. Recruiters or hiring managers no longer need to store that information manually.
6. Automates job offers and document signing. Once candidates are screened and a new hire is selected, ATS platforms are able to send job offer documentation quickly so as not to cause costly delays. Signed documents from the candidate can also be stored centrally in the candidate’s profile. This frees up time for recruiters to get creative with their job offers.
While these first six benefits directly benefit the recruiter and reduce menial tasks, they also enhance the candidate experience in a number of notable ways.
Improved candidate experience
Streamlining the recruitment process also makes it better for the candidate as they navigate your hiring process. Here’s how.
7. Seamless communication from application to offer (or rejection). Consistent and timely communication throughout the application process signals to candidates that they are being taken seriously and that you are a professional place to work. An ATS platform automates the critical stages of communication with the candidate, ensuring that the overall experience is as efficient and transparent as possible.
8. Quicker screening and better clarity of where they stand. Because of this efficient communication and scheduling, candidates move through the hiring funnel quickly. They will know whether they have made it to the next phase or if they have been rejected shortly after their application. This allows them to make decisions on their next move.
9. Assurance that the hiring process is fair. By providing clear communication and transparency around the screening process, candidates will be able to see and understand how the process works. This provides assurances that they are being treated fairly.
Each of these benefits to the recruiter and candidate are a direct result of improvements to the overall recruitment process, which is perhaps the biggest benefit of an ATS platform.
A more efficient recruitment process
ATS automation and data management impact the recruitment process in a number of positive ways. These impacts will vary greatly depending on the capacity of the ATS and how it is deployed within an organization.
That being said, here are some of the primary recruitment process improvements that can be attributed to ATS platforms:
10. Provides insight into the effectiveness of different processes. Clarity into which recruitment techniques are working well and which need improvement. Enables recruiters to make objective decisions about what they will continue or stop doing.
11. Tracks and reports on important recruitment metrics. Established KPIs can be continuously tracked and reported on directly with the ATS. Enables recruiters and managers to identify issues quickly, and establish the solution using reliable data.
12. Automates critical recruitment processes. As mentioned, ATS tools automate tedious and repetitive tasks, ensuring that the entire recruitment process doesn’t bottleneck under too many resumes or not enough manpower.
13. Stores all current and past candidates. Large, cloud-based storage enables recruiters to keep track of all candidates, creating a talent pool that can be regularly mined when needed.
14. Enables collaborative recruitment. Team access to ATS platforms enables future co-workers and hiring managers to become involved in the selection process.
15. Provides an “always-on” platform to manage recruitment. Cloud-based, SaaS platforms usually have 99.9% up times, meaning this mission-critical tool will always be there when needed.
All of these benefits lead to the final, core benefit of an ATS: better hiring results.
Better hiring results
The central goal of any recruitment process is to continuously improve the performance and retention rates of new hires, while also optimizing return on effort and investment.
To that end, “better hiring results” could be broken down into three primary fields:
16. Shorter time-to-hire. Hiring faster, while maintaining quality, reduces productivity downtime company-wide, and reduces time waste within the HR department.
86% of recruiters say that ATS platforms helped them improve time-to-hire.
17. Improved cost-per-hire. Getting better candidates, faster, for less money improves overall company profitability in the long run.
18. Better quality-of-hire. Based on performance reviews, ramp up time, turnover, and retention rates, and hiring manager satisfaction, this is the master metric for how successful a recruitment decision was.
78% of recruiters say an ATS improved the quality of their hires.
Of course, each of these benefits is only achievable if you have the right features for your organization.
What features does the best recruitment software have?
The features that you need in recruitment software will depend entirely on the size of your company, your budget, and how complex your recruitment process is.
Luckily, whether it's ATS, CRM, HCM or one of the many other types of recruitment software, there is likely a platform to fit your needs. To help you get started, here’s a checklist of recruitment software features you should consider.
□ Task automation
□ Candidate management
□ Interaction tracking
□ Interview management
□ Job board posting
□ Resume search
□ Resume parsing
□ Team collaboration
□ Employer branding management
□ Careers pages
□ Data centralization
□ Passive candidate management
□ User-friendly, intuitive interface
□ Recruitment analytics dashboard
□ Metrics reporting
□ Candidate import and export
□ Candidate tagging
□ Mobile recruiting
□ Security and stability
Each of these features will have its own subset of information that you will need to consider when choosing the right fit. It’s important to do your due diligence when choosing an ATS or other recruitment technology, as this will form the core of your overall hiring process.
How much do Applicant tracking systems usually cost?
Here are the main ATS pricing models explained and reasons for why the prices vary.
If you've been scouring the internet for your next ATS provider, and haven't been able to find a proper pricing page, that's because most companies select their rates according to a number of factors, including the number of job openings, business size, integrations, modules, and many other things.
Before pricing is adapted for you, you'll probably be starting with one of the following models:
Flat rate: This ATS pricing model means you pay one amount regardless of user count or any count. Flat rate is usually calculated according to company size and is best for large enterprises that can afford a multi-year long contract at once.
Pay per user: This model is suited towards smaller companies since you get charged for the number of recruiters, and other hiring stakeholders that will be on the admin side of the applicant tracking software.
Pay per vacancy: This model depends on the number of active job openings you're working on. Pay per vacancy works well for small businesses as well if they have low hiring volumes.
Pay per module: When the applicant tracking software comes as a part of a larger platform, this pricing model is typically applied. It's basically an additional feature that you can add to what you already pay, like a CRM or onboarding platform.
When looking into the cost of an applicant tracking system, remember to involve every stakeholder in the process, and draft a business case before vetting the best ATS solutions out there.
How an ATS differs from other HR tools
Anyone doing research into modern recruitment or HR tools can be forgiven if they’re a little bit confused about their options. The variety and scope of technology today means that there is a software or tool designed for virtually every human resources need imaginable. To put the market size into perspective, leading industry analyst Josh Bersin reported in November 2018 that he is tracking “more than 1,400 HR technology companies”.
The biggest confusion is often around the difference between tools like an Applicant Tracking System (ATS), and general HR tools. To understand this, it’s important to take a step back and look at the general difference between recruitment and HR tools.
Recruitment is a part of the “human resources” umbrella, yes. But the tools needed for different phases and requirements of an employee’s lifecycle can vary significantly. Most notably in the recruitment phase.
The best way to wrap your head around these differences is to understand the different roles within an HR department. Recruitment teams, who focus on finding, screening and selecting qualified prospects will have a totally different set of requirements than payroll or benefits teams. Then there’s company-wide issues like performance, engagement, and legal compliance.
Each of these areas of HR require specific platforms that can be called recruitment tools, HR tools, or a variety of other names that we’ll cover in this article.
HR tools vs. recruitment tools
To help contextualize all of the different software platforms out there, it’s helpful to take a look at the fundamental difference between HR tools and recruitment tools.
HR tools, generally speaking, refer to a range of platforms that tackle one or multiple areas of human resource management. They are designed specifically to enhance the efficiency of human resources teams in a variety of different areas. These platforms rely largely on the easy management of employees and their data to streamline and automate common HR processes.
On a surface level, HR tools are designed to move all administrative HR tasks to an online or digital platform, where they can be automated and sped up. This allows HR departments to work more efficiently on critical tasks, and enables better planning around costs and targets.
Large, enterprise HR tools will often offer a modular set up, with specific tools designed to aid specific areas of human resources. Some of the key functions that HR tools focus on are:
- Employee onboarding
- Managing and storing HR policies and documents
- Managing employee contracts
- Payroll and compensation management
- Benefits administration
- Performance, learning, and development
- Absence management
You’ll notice that HR tools are primarily concerned with people who are already employed by the company, rather than candidates. Their job is to ensure that employees are receiving any and all of the support they need, while taking the burden off of the HR department.
Depending on the size and budget of the organization in question, these HR tools can either be one large, modular platform that covers most or all of the above functions, or a series of different tools that integrate with one another.
Some of the more complex HR tools even contain their own recruitment tools as standalone modules. Or, recruitment tools can be their own, separate platform that feeds into the wider HR process.
Recruitment tools, on the other hand, are software platforms used specifically to automate part or all of the recruitment process. This might include sourcing, selecting and shortlisting candidates, screening, and interviewing.
Recruitment tools like an ATS, unlike broader HR tools, are focused solely on the recruitment process. They don’t usually provide functions beyond the onboarding phase, and are specifically designed to maximize outcomes related to the recruitment and placement of candidates into job vacancies.
As a recruitment tool, an ATS is designed to improve the candidate experience and to make managing large numbers of resumes easier and more efficient for hiring teams.
Some of the key functions features in dedicated recruitment tools include:
- Candidate sourcing
- Applicant tracking
- Recruitment analytics and reporting
- Pre-hire assessment (pre-screening, interviews, testing, background checks)
Many modern recruitment tools will also act as information aggregators, scanning social and search sites for information about new candidates. To that end, recruitment tools aim to provide as much information about candidates as possible, and present, process and make decisions on it effectively and efficiently in order to improve overall hiring results.
Now that we’ve discussed the difference between HR tools and recruitment tools, let’s take a look at some examples of each.
Examples of HR tools
As mentioned, HR tools are platforms that tackle one or several areas of human resources management. The primary HR tools include the following:
- HRMS or HRIS
- Performance management
- Payroll and compensation management
- Benefits management
- Employee engagement
- Learning management
- Succession management
- Workforce planning
This list is not exhaustive but covers the eight most common HR tools in use today. Many enterprise platforms offer some or all of these features, while other tools focus on one specific function.
Let’s take a look briefly at each.
HRMS or HRIS
This is the most common way for HR teams to input, store and track employee information. They are used to create employee profiles and track data around virtually all HR metrics.
These HR tools are primarily data-driven solutions that are used to create in-depth reports for the purpose of auditing and management. They act as HR’s central platform and will usually integrate with the company’s other HR tools.
Either a module or standalone tools, performance management tracks employee goals and progress, conversations with their managers, and feedback from co-workers. These HR tools are designed to track an employee’s performance relative to their goals for the purpose of providing regular or periodic reviews.
Payroll and compensation management
These are HR tools that automatically calculate, track, and deliver paychecks and bonuses to employees. They will also automate tax deductions, paid time off, and other parts of an employee’s total compensation packages. These tools are purely designed to automate menial tasks and to ensure accuracy in a highly sensitive area of the business.
Like payroll management, these HR tools are designed to automate and streamline the delivery of employee benefits packages. They handle activation and cancellation of benefits according to company policy and serve as a central platform for documentation and critical information.
Using techniques like pulse checks, surveys, and regular feedback, engagement tools aim to monitor a company’s culture and the general sentiment of the employees within it. They regularly collect and present information around engagement to give insight into what employees are thinking, and what they want.
Learning management platforms or modules that provide a place for employees and managers to create and monitor the progress of professional development plans. Many enterprise solutions will contain large libraries of learning documents, as well as integration with third-party resources. The goal of these HR tools is to ensure that employees are continuously evolving their skills and knowledge.
Succession management refers to the systematic and proactive practice of planning for vacancies in key management positions. These HR tools help organizations identify future vacancies in key roles and employees who may fill those roles. It then helps provide a program for grooming that individual to seamlessly move into the new position when necessary. These are often modules of larger performance and learning management systems.
Like succession management, workforce planning tools aim to identify trends in retention and attrition, as well as future company business goals, to determine future HR needs. These HR tools provide teams with insights into what changes are likely coming in the organization, as well as ways to deal with those new requirements.
Examples of recruitment tools
Now that we’ve looked at the main types of HR tools, it will be clearer how recruitment platforms like the ATS are different.
The three main types of recruitment tools are:
- Applicant Tracking Systems (ATS)
- Candidate Relationship Management (CMS)
- Interviewing and assessment software
There are also some basic tools that can help with automating communication, aggregating information, and writing job ads. We’ll discuss those at the end of the article.
Applicant Tracking Systems (ATS)
An ATS is used as the central hub for processing job applicants, organizing job posts, processing resumes and tracking interviews. The volume of resumes that companies receive thanks to online job placements has made having an ATS platform standard practice for recruiters.
94% of companies that use an ATS report that it has improved their hiring processes, including quality-of-hire, time-to-hire, and cost-per-hire. That’s because an ATS helps to automate and streamline repetitive and time-consuming tasks while maintaining clear and consistent records of every applicant that comes through the virtual door.
Candidate Relationship Management (CMS)
CRMs on the other hand, work alongside an ATS to actively source candidates by building and maintaining talent pools. These recruitment tools help nurture passive candidates through recruitment marketing so that, when vacancies arise, there’s always a backlog of qualified people to consider.
While an ATS is primarily focussed on applicants, CRMs focus on the larger potential candidate pool. Together, these two platforms can be leveraged to dramatically improve the effectiveness and efficiency of a company’s hiring process.
Interviewing and assessment software
The third type of recruitment tool, interviewing software, is becoming more and more integrated into ATS and CMS platforms. As standalone tools, they offer online, real-time interviewing capabilities, either by video or audio. They also allow recruiters to record interviews to review on their own time.
Modern interviewing software is even able to provide data on each candidate by assessing things like word choices, speech patterns, and facial expression to help predict how a candidate may fit in a particular role.
Other recruitment tools
There exist hundreds of smaller tools that recruiters can use to enhance one small part of the hiring process. Some of these include:
- Recruitment chatbots, which leverage AI to provide basic messaging services. This can include performing simple tasks like answering basic questions and scheduling interviews. They can be deployed after hours, or to take the pressure off of recruiters during peak time periods.
- Social media scrapers that search over a dozen social media websites for specific words and phrases associated with a job opening. This can be used to find and contact candidates at a much faster rate.
- Text analyzers that read and review recruitment ad copy to predict how effective it will be or if it runs the risk of turning certain demographics off of your posting.
The options for the HR and recruitment tools on the market today are as varied as the companies and individuals who will be using them. It’s important to understand the difference between platforms and to have a firm grasp of your company’s specific needs.
How to choose the right ATS
As mentioned earlier, there are roughly 1400 unique recruitment software platforms on the market as of 2018. The ATS market alone is worth more than $12 billion USD as of 2019. As a result, choosing the right ATS platform can sometimes be confusing and daunting. There are simply too many options to choose from, meaning that you need to have a systematic and objective process for making this mission-critical decision for your business.
The two primary variables that will influence what ATS provider you choose are the platform (or hosting) type, and the size of your company.
For the platform type, the main ATS categories are:
- Software as a service (SaaS). These are full, turn-key solution providers that host your platform and company data on a cloud-based server. They typically provide set-up, support, and ongoing customer success management to help you get the most out of the product. Many companies are moving to a SaaS platform due to the ease of use, and 24/7 access, anywhere the employees are located.
- On-site. These are software platforms that are hosted on the company’s own IT infrastructure. They provide benefits such as more customized security and data maintenance possibilities but require much more upkeep and IT manpower to maintain.
- Integrations. These are smaller, modular solutions that integrate with one another to create a full ATS platform. ATS integrations are great for smaller companies with a more limited budget and allow for picking only the solutions you need, and the ones that fit your specific requirements.
Company size and type typically includes the following categories:
- Enterprise. Large corporations, typically with 5,000+ employees. They are physically located in many different locations, and have complex recruitment and data management requirements.
- Small-or-medium-sized businesses (SMB). Companies with hundreds of employees, who may be geographically dispersed. They typically will require less powerful ATS features and data storage than Enterprise clients.
- Agency. They will typically need large amounts of data storage, and applicant processing capabilities due to higher volumes of job applicants.
The first step in choosing the right ATS, then, is to understand your company needs, and which of the above categories you fall into. This will allow you to focus your product search to solutions that are geared towards your needs.
A step-by-step guide to choosing an ATS
The five key steps to choosing the right ATS that you should follow are:
- Assess your needs
- Set a budget
- Review options
- Test drive your picks
- Make a selection
In this section, we’re going to break down each step to help you get started with choosing the best ATS possible for your company.
1. Assess your needs
As mentioned, the first step in any decision-making process is to determine what your company needs are. You can start this process by writing down all of the requirements that you can think of that will improve your recruitment process.
But, this step should never be done in a vacuum. Instead, you should collaborate with both your recruitment team members, as well as any major stakeholders (like hiring managers) throughout the company. Conducting a simple survey via email or a platform like SurveyMonkey will give you great insight into what your company as a whole feels is needed from a new ATS platform.
The best way to facilitate this process is to take the time to clearly identify and define the problem that you are trying to solve. You should have a clear understanding of the issues that you want to fix, and improvements you’d like to make to your recruitment process. Bringing in opinions from around the company will help to clarify these problems, and will help steer your search toward the platforms and features that will help solve those issues.
At this stage, you should be thinking about which functions you need, and which you don’t (we’ll talk more about this later in the article). This will help guide your questions to ATS providers during the assessment and selection phases.
2. Set a budget
The next step in choosing an ATS is to lay out how much money you’re willing to spend on a new platform, and what your desired return-on-investment (ROI) will be. Make a list of the core benefits that an ATS will bring to your company, and measure those benefits relative to the cost of the platform.
At this stage, you should be aware of the standard pricing models for most ATS platforms. Typically, an ATS provider will charge on a cost-per-active-job basis. As in, you pay a certain rate for each job vacancy you promote and process during a given year. There may also be costs associated with customer support and maintenance that you will want to take into account.
Make a list of all potential costs, clearly identify how much you’re willing to spend, and then create a list of must-have benefits and KPI-improvements that will be needed to hit your target ROI. It’s important to link your target ROI to a specific business-related outcome (i.e. reduced time-to-fill will lead to increased revenue) to make it easier to sell your pitch to company decision makers.
3. Review options
Once you have your needs and budget firmly established, you can start doing some research into what platforms are on the market. Knowing your company type and desired ATS infrastructure will help focus your search to those platforms that meet your needs.
Some key considerations to keep in mind here are:
- Ensure you focus on software that doesn't make your job more complicated.
- The platform will need to integrate with any tools you currently have.
- The ATS should clearly address your core requirements.
- The ATS should improve your entire recruitment process, not just one or two parts of it.
- It should be easy to learn and use to ensure buy-in from your team.
- Look for a company that will be a partner, not just a provider. They should be reliable, and available to help you continuously improve your outcomes.
These are all lofty goals when you first start looking into platforms. Luckily, there are many online resources you can rely on to help zero in on the highest potential platforms. Websites like Capterra, TrustRadius, or G2Crowd all provide detailed and authentic reviews from real customers, feature comparison tables, and deep insights into platform performance and reliability.
After doing some research into various ATS platforms, you’ll likely have a short list of options that you’re considering. Reach out to each provider to set up an introductory call, a demo, and, most importantly, a full-featured test drive.
4. Test drive your picks
Once you have a short list of ATS platforms, you should request that the providers set up an extended full-feature test drive of each platform. This will allow you and your team to test the platform in a real-world setting to determine how well it integrates with your workflow, and how well your team is adopting the new tool.
During this phase, try to use as realistic a test as possible. Note the performance of specific features, flag any concerns or unnecessary tools that may cause issues down the line, and make an overall assessment of the platform. Again, be sure to invite your team into this conversation to get as many perspectives as possible.
From here, you should be able to narrow your list of ATS platforms to just one or two. Then, you can apply your ROI and cost-benefit analysis to your final shortlist to determine which one will give you the best “bang for your buck.''
5. Get started
Once you’ve selected your platform, it’s time to work with the ATS provider to get things set up with your IT department and recruitment team. Work through the implementation and onboarding process with the provider, ensuring that your team is involved at each stage.
Once fully implemented, you should continuously monitor your team’s usage of the platform for variables such as ease-of-use, process improvements, and overall recruitment results. Continuously track and monitor your core KPIs so that you can justify your spend on the platform when it comes time to renew your contract.
Questions to ask about ATS platforms
During the process of choosing an ATS platform, you’ll want to keep a list of important questions to ask each provider. These are questions that relate to your core requirements and budget considerations and will help you determine which platforms to dig deeper into, and which to eliminate from considerations.
How you generate these questions - and track the answers - is entirely up to you. But, it’s good practice to focus on the following areas when creating your question list:
- Candidate engagement
- Candidate management
- Scheduling and interviewing
- User experience
In this section, we’ll share a few sample questions from each topic.
- How is this platform built to easily source new candidates?
- What partnerships do you have with major job boards?
- What features are there to recommending the best candidates?
- How does the platform scan resumes and flag high potential applicants?
- Can you walk me through the candidate application process?
- What features does this platform have for employer branding enhancements?
- What is the end-to-end process for posting job ads?
- What features are there for communicating with applicants?
- What is the process for advancing candidates through the pipeline?
- What task management features does the platform offer?
- How does the platform enable collaborative hiring?
- What information can be added to candidate profiles?
- What are the email synching options, to import communications with candidates?
- How are job offers and documentation managed?
- Are there any features to support diversity hiring?
Scheduling and interviewing
- Is it possible to customize the pre-screening process by job posting?
- Are there automated scheduling features for interviews?
- Does the platform synch with calendars and room booking when interviews are planned?
- What are the premade interview and scorecard kits available in the platform?
- How are interview results tracked?
- How are comments and feedback collected and tracked for each candidate?
- What premade report templates do you offer?
- Can you create custom KPIs to track?
- Are there automated reporting options?
- What are the major recruitment and HR software platforms you integrate with?
- Can you integrate with my current platforms?
- What are some add-on integrations that could be added to the platform at a later date?
- Is the system compliant with all data and privacy laws?
- Where is the data stored?
- How is the data secured and encrypted?
- In the event of a data breach, what is your protocol?
- What support do you provide for implementation and onboarding?
- Do you provide training for all team members who use the product?
- Will we be assigned an Account Manager and Customer Success Manager?
- What are your support hours?
- How easy is it to implement this platform?
- What is a typical learning timeframe for new users?
- Do you have any case studies that focus on ease-of-use or overall user experience?
Applicant tracking system implementation
Often, the most overlooked step in choosing an ATS system is preparing for implementation.
There are three areas that you should pay particular attention to ensure a successful ATS implementation. This includes:
- Getting everyone on board the ATS
- Deciding on hiring goals
- Identifying and using vendor help
Get everyone on board
When implementing a new system or replacing an old one, it's important to make sure all your team is up to scratch. It's good to begin by highlighting how the new system will improve performance across the board. You can do this by using case studies or showcase statistics on how other companies have benefited from using the selected ATS with their hiring.
This will help your team focus on the benefits of the new software.
You should also be looking at providing training for new users and making sure that your team can practice using the software before you go live.
Having clear goals and measurable metrics will help you stay on top of your hiring. To do this successfully, first figure out your success metrics.
- Make sure you have short and long term hiring goals
- Create an ongoing plan to track measurements so that you can improve over time
Companies measure recruiting metrics in different ways, so make sure your company uses the most up-to-date and relevant hiring metrics.
Identify and use vendor help
Vendors are experts on implementing their ATS, so they know what's been tried, what works, and what doesn't.
Many ATS vendors offer implementation help in varying degrees, usually depending on the company's size or hiring teams. For smaller clients, some vendors will offer case studies of successful implementations. Most vendors assign their consultants to help with every step of the process for larger clients.
Make sure to utilize this benefit and get as much help and support during your ATS setup.
Lastly, plan ahead!
Plan ahead by listing out your pain points, establish clear communication with your team and the vendor, ask for help if you need it, and then go live. If you want to become a true expert in getting your hiring teams up to speed with your ATS, check out our ATS Onboarding guide.
ATS software features checklist
With the variety and complexity of ATS platforms on the market today, it’s easy to get overwhelmed by all of the features. It can’t be stressed enough how important it is to have a clear understanding of your company needs and overall ROI goals. This will help you focus on only the features that will help improve your recruitment process and move the dial for your business as a whole.
To help give you an overview of the features there are to choose from in a typical ATS, we’ve put together a short checklist. Use this when creating a shortlist of requirements from your new ATS provider.
- Automated background checks
- Automated candidate evaluation
- Automated reporting and premade templates
- Automated scheduling
- Boolean search, AI-driven resume parsing
- Career site builder
- Custom tags and filters
- Data security
- Easy application forms
- Free trial or test drive
- Integrations with other tech software
- Interview results tracking
- Intuitive, user-friendly interface
- Job board analysis and recommendations based on success rates
- Mobile app
- Mobile-friendly at every stage of usage (employee and candidate-facing)
- Multiple languages
- Ongoing support and training
- Posting to multiple job boards at once
- Rating and rankings for candidates
- Social media recruiting
- Sourcing extension
- Talent pool management
- Team notes
- Texting candidates
- Video interviews
This checklist is not exhaustive and should be used only to guide your ATS screening. You’ll likely have more specific feature requirements after going through the process of determining your needs and creating a shortlist of must-haves. Thanks to huge developments in technology, and a booming ATS market, there is undoubtedly a platform out there that will fit your exact needs.
Finding the perfect employee starts with intelligent sourcing and reliable screening, both of which can be accomplished using a solid ATS platform. It’s pretty tough to hire the right candidate for the job if you can’t find them in the first place, so you should make sure that you have the best possible tool at the heart of your recruitment process.
So, when choosing your tech stack, start with finding the best possible ATS for your needs and budget. This will enable you to continually tweak and test your sourcing and screening process using built-in data analytics features to ensure that your recruitment process is always operating at peak efficiency. Once you have this core building block in place, and you’re confident that you’re recruiting top-notch talent, then you should focus on the remainder of the talent management process. This will ensure that your hard won employees stay with you for the long term.