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Growing Into Applicant Tracking Systems

October 10, 2006
Related Topics: Candidate Sourcing, Featured Article, Staffing Management
Nasty turnover rates, high recruiting volume, deep cyclical volatility, a difficult mix of low-end and high-end positions, and a heavy emphasis on customer service have always marked the hospitality industry. It's not a pretty place for recruiters or applicants.

"The problem today is to fill open positions with speed because of the impact on customer service at each property," says Jonathan Kubo, director of recruiting and relocation for Interstate Hotels & Resorts, a hotel management company with more than 280 properties and 26,000 employees. "Open positions, or positions filled with less than optimal candidates, can have a negative effect."

With most companies in the industry hiring on an ongoing basis, inefficiencies in the recruiting process generate additional problems.

"For both hourly and nonhourly employees, any delay in hiring caused by an untimely process or compliance issues means that you lose candidates to your competitors," Kubo says. Constant hiring can burden staff and pump up costs.

Jeff Wade, vice president of human resources at Hersha Hospitality Management in Philadelphia, feels the same pain.

"Recruiting in the hospitality industry is always a challenge because many of the positions are lower-wage jobs, and front-office positions are often filled by college students who want to move on with their careers," Wade says. "We can find bodies, but it's difficult to find people with the right attitude toward guests, and it's hard to train people to be hospitable and guest-focused."

Kubo reduced the hiring workload at Interstate by installing a customized applicant tracking system that allows direct comparisons of candidates and fully automates compliance monitoring. In an average 30-day period, 3,400 applications come in through Interstate's ATS and the company closes out 400 positions.

Wade followed the same path at Hersha to meet the company's growth surge as it expanded from 15 hotels to 54, with a dramatic surge in hiring. Hersha's new ATS launched on September 1.

But applicant tracking systems only work when all parties—applicants, hiring managers, recruiters and executives—use the system. Ease of use remains an issue at smaller firms, which are still in the early phase of ATS adoption. Midsize companies are adding functions to existing systems, while large companies are moving toward the full integration of ATS and broader talent management systems.

ATS initiation
Rapid growth and high turnover in the hospitality industry provide a fertile field for testing quick and effective automation.

Hersha personifies the smaller-company trend toward ATS adoption, while Interstate is following the ATS developmental pattern for midsize firms that are now adding functionalities.

When Wade joined Hersha in April 2006, there was no HR function or recruiting infrastructure. A general manager handled hiring for all hourly positions; a half-dozen outside recruiting agencies filled management positions.

The company signed on 1,000 employees in 2005 with no uniform process for applicant tracking and no systematic practice for interviewing. With 1,000 additional new employees needed for 2006, Wade had to install an HR function, build a recruiting process and hire more than a hundred new employees a month.

Although Wade faced urgent hiring needs, he rejected the idea of outsourcing.

"We have a unique founder-led culture, built on a foundation of taking care of our associates who, in turn, take care of our guests," he explains. "My fear was that outsourcing providers might look for candidates and pass them on to us too quickly, and not take the time to tell our story effectively. Outsourcing recruiting would be like outsourcing sales."

Instead, Wade hired HR and recruiting personnel and installed an ATS system, all within a matter of months. He now works with a staff of seven, including a director of talent acquisition.

"The recruiting process is no different from any sales position," he says. "When I looked for a director of talent management, I did not look for someone with a HR background. I hired a director of sales from a hotel."

Wade also structured the director's compensation so that 30 percent of it is contingent on meeting recruiting goals and preset metrics.

"Part of her performance will be measured from the feedback we get from both successful and unsuccessful candidates through our ATS," he notes.

Hersha surveyed its 3,000 employees, who reported that they searched and applied for employment online, confirming Wade's sense that the company could automate recruiting for all positions, from hourly associates in hotels to senior leaders at corporate headquarters.

"All candidates want to be able to go online and to be kept in the loop," he notes. "Automating the system allows recruiters to focus on speaking with the candidates."

Wade tapped ERC Dataplus Inc. to provide an ATS.

"We began the process in April 2006, signed an agreement in June and had a complete customized system in place by September 1, which is really fast," Wade notes.

The customized system takes employees all the way from prehire to three-month and six-month reviews to exit interviews and everything in between.

New hires go through an initial hour-long orientation online from anywhere they chose, which speeds up onboarding and gives them a better sense of the company.

"No one, from senior vice presidents to hourly workers, can go on payroll without being in the system," Wade says. "It's our first step in moving to a paperless HR function."

Evolutionary process
Interstate implemented its current ATS in September 2005.

"I like our system because we have the option to post positions on job boards and community organization sites though a one-step process for posting on multiple sites, but then all applications are brought in to a single point," Kubo reports. "We can track the status of the application and manage online all the data related to selection and interviewing."

With ATS up and running, Kubo is now considering adding a prehire assessment function that can sort applicants by their probability of success on the job. The function uses prescreening questions for basic information and specific questions designed for each position, and then remove applicants that don't meet minimal requirements.

Kubo is now meeting with ERC, Interstate's ATS provider, to determine which assessment tools are most appropriate.

"We want tools that are customized for the industry and the company," Kubo says. "One of the big advantages is that all the tools will all be incorporated into the system. My role is to evaluate if the assessment tools make sense."

"Now, we are seeing modifications of the technology at the larger companies, including a significant increase in using validated assessments to get better hires and reduce time and costs," says Paul L. Rathblott, president and CEO of ERC.

He also reports significant improvement in the integration of other add-on components.

"At one end of the spectrum, you have PeopleSoft HRIS systems, which store a lot data but do not have extensive capabilities or functionalities," Rathblott notes. "At the other end, you have systems that have a lot of functionalities such as performance assessments."

The goal is to integrate data storage and functionalities and fold all the components into one process that links all information for new hires and existing employees.

Intuitive systems
"Recruiting technology must be redesigned so that it is as intuitive as Travelocity or Orbitz, which we use as a model for truly intuitive systems," Rathblott notes. "The point is to have a system that someone can use even if they've never used it before."

Employers commonly underestimate the extent to which applicants are able and willing to use a fully automated system, but ERC and other ATS providers report that the flow of applicants actually increases when companies move to an Internet-only application process.

"The higher flow occurs because candidates are attracted by the flexibility of the Internet," Rathblott explains. "It allows them to learn more about the company and the job and provides them with a quicker response."

Access to the ATS is critical for hiring managers, but the system may go unused if it is not intuitive.

"For example, hiring managers cannot use the requisition system in PeopleSoft," Rathblott says. "They end up filling out a requisition form and faxing it to HR."

"With the exception of very heavy employee-based industries such as call centers, the typical span of control for a manager is eight to 10 employees, which means that even with very high turnover, the manager will interface with the recruiting technology no more than eight times a year," Rathblott notes.

An ATS must be designed to accommodate this very infrequent user. The ERC system is supported by a wizard process like Orbitz uses, with a step-by-step process for requisitions and audio support.

"Recruiters may be interfacing with the system on a daily basis, so it must be not only user-friendly but also user-pleasing—pleasant to work on," Rathblott says. He believes that resistance to ATS adoption in small and midsize companies will disappear as cost and ease of use improve.

At Hersha, Wade is already approaching his goal to cut by half the fees that the company hands over to outside recruiting firms. Time-to-hire for hourly associate positions is now down to five days.

"Salaried positions take 30 days, but we will cut that in half," Wade says. "You have to get recruiting right."

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