Applicant Tracking Systems Evolve

Anyone who’s been away from the applicant tracking system (ATS) market for the past few years would likely be surprised by the new role these venerable recruiting systems play in hiring talent today.

Introduced two decades ago, the ATS revolutionized recruiting by automating the storing and processing of resumes and by protecting companies against lawsuits through greater consistency in hiring practices.

In intervening years, innovations made the ATS an improved tool for resume parsing, helped to streamline the job requisition process and, through new reporting metrics, enabled HR leaders to identify the most fruitful sources for job candidates, allowing better targeting of recruiting dollars.

Today’s ATS has morphed into as much of an integration platform as a document management system, recruiting experts say, serving as a hub for services like video interviewing, background checking, assessment testing and onboarding and as a link to social media sites.

“The ATS is now seen as the core part of an ecosystem of ancillary recruiting technologies that have hit the market over the past two years,” said Sarah White, principal analyst in talent acquisition for Bersin & Associates, an HR research and consulting firm.

Society for Human Resource Management (SHRM) member Elaine Orler, president of the Talent Function Group, said the ATS has evolved from a stand-alone product to a cornerstone of larger talent acquisition technology platforms.

“There are probably 200 vendors that started in the ATS market and have since exploded in various directions,” said Orler, who was a member of SHRM’s Technology and HR Management Special Expertise Panel. “I’m not aware of a single pure-play ATS vendor in the market anymore.”

Areas of Innovation

Much of the recent innovation in recruiting technologies surrounds mobile applications and a shift to software-as-a-service delivery models, as well as in use of candidate relationship management (CRM) software and social networks.

Rob Prinzo, president of The Prinzo Group and a board member with the International Association for Human Resource Information Management (IHRIM), said a 2011 survey his firm conducted reflects the growing use of social media as a go-to recruiting tool. Recruiting via LinkedIn, Facebook and Twitter placed fourth on the list of top sources for job candidates, Prinzo said, up from eighth in 2010 and 13th in 2009.

“The ability to post out to the big three social media sites is transforming recruiting practices, and it’s a feature companies should look for in an ATS,” Prinzo said.

More ATS vendors are stressing integration with social networks in their marketing campaigns, White said. “As one example, LinkedIn has changed the way ATSs build out profiles, and candidates can now apply for some jobs purely with a LinkedIn profile, no longer needing to submit traditional resumes,” she said.

John Hinojos, vice president of consulting services for HRchitect, sees more companies employing CRMs to target passive candidates—those not pursuing openings but who might be enticed if exposed to the right pitch—as well as to stay connected to other promising candidates in talent pools.

“An ATS and an integrated CRM allows you to push out job openings to someone you may have been keenly interested in in the past but who you didn’t have an opening for at the time, or who has applied for jobs previously,” said Hinojos, a member of SHRM. Such systems reduce the dollars and time needed to advertise externally for positions, he said, something an ATS can’t accomplish on its own.

Recruiting has made the leap from laptops and desktops to mobile devices as well, Prinzo said. Spurred by mushrooming mobile recruiting apps, more corporate recruiters are using BlackBerries, iPhones and Androids to post jobs, browse social networks and conduct recruiting via text messaging initiatives.

Recently, when SHRM member Sheila Stygar, senior director of talent acquisition at PepsiCo, was involved in selection of a new ATS that culminated in the purchase of a Kenexa product, among her top criteria was proven mobile functionality. “Our managers are frequently on the road, and now they can approve requisitions and view candidate records through their smart phones,” Stygar said.

Choosing a System

A 2011 Bersin & Associates study found that nearly half of companies surveyed were considering replacing their ATS in 2011. Some existing systems are considered antiquated as contract terms come due, White said, and a shift from reactive to more proactive hiring strategies, and a desire to manage candidate life cycles better, are fueling the push to replace ATS systems.

Organizations that moved to what Orler deems “generalist” or decentralized recruiting models during the recession—shifting responsibility for hiring to regional operations or HR generalists at the local level—are migrating back to centralized models and rebuilding their recruiting staffs as the economy improves.

“As that shift happens, it also affects the kind of recruiting technology needed to support the recruiting model,” Orler said.

At a minimum, experts said, most HR leaders want an ATS that is able to parse resumes effectively and track applicants with compliance around the requirements of the U.S. Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) as well as support their high-volume recruiting efforts. They have a daunting array of ATS options to choose from, ranging from free systems all the way up to feature-rich, best-of-breed technologies, Orler said. She does recommend free ATS systems to certain clients.

“Any organization that hasn’t used an ATS before, and there are still some out there, can get a real feel for their capabilities and learn the market by using a free system,” she said. “Many of these systems also have been setting the bar higher on usability.”

It’s rare that just one technology works effectively for recruiting any more, Orler said, given varied hiring and succession planning needs. “The typical now is four, and the minimum I see is usually two,” she said. The core four include an HRIS product used for foundational data like job structure requirements but that can have recruiting capabilities, an onboarding tool, an ATS and a CRM.

“One trend I see is a desire by more companies to make sure their ATS ties in seamlessly with an onboarding system,” said Hinojos. He recently worked with a law firm, for example, that chose its recruiting technology only after selecting an onboarding system.

“The firm spends a lot of money to convince people to come work for them, and the last thing they want is for new attorneys to experience a painful onboarding process once they start at the firm,” he said.

Integration and Analytics Key

Orler said one factor often overlooked when considering an ATS is how easily it will integrate with other HR systems. Close questioning of vendors on how such integration will work can save labor costs and improve data accuracy, she said. For example, companies will want to minimize the need to recreate electronic information or re-enter data manually as part of a systems integration project.

Regarding analytics for things like sourcing, cost-per-hire and time-to-fill reporting, Orler said, a minimum requirement should be that an ATS “enable all users to build their own custom reports against a data model that already exists. Reporting should be user-friendly, and you should be able to just drag and drop field information into a report and have the system understand it based on limited data.”

Dave Zielinski is a freelance writer and editor in Minneapolis.