Applicant-tracking systems and recruiting software can cost anywhere from a few thousand dollars to several million dollars, depending on the size of the organization, the scope of the project and the particular application.
With that investment, time to hire may plunge by two-thirds and cost per hire by 40 percent or more. Many organizations also reduce turnover by 10 percent or more by hiring more effectively up front. In many cases, however, the technology proves to be a disappointment.
Here are some of the fallacies that have caused companies to go astray:
1. You can handle all recruiting online. There’s no question that the Web has made it a lot simpler to reach hot prospects--and for them to reach you. It can also slash recruiting costs dramatically. However, it’s not the only game in town. Recruiters with solid industry connections are essential for finding candidates for senior- and executive-level positions, and valuable for combing through piles of résumés for many other positions. What’s more, paper-based résumés can yield impressive results.
If it’s not possible to process paper or scan it, it’s wise to at least send a letter or e-mail to the individual asking that he or she head to the Web site to fill out an electronic résumé. Otherwise, "an organization can see excellent candidates slip through the cracks," notes Peter Weddle, a leading expert on online recruiting.
2. The software will find the best candidates. It’s tempting to think that an applicant-tracking system will mine all the résumés that stream in, monitor job boards and land all the A-players your organization desires. Unfortunately, switching on a totally automated system is a recipe for disaster. "It is essential to have a sourcing strategy for driving hot prospects to your Web site," says Scott Erker, a vice president at DDI, a Bridgeville, Pennsylvania, consulting firm. "Otherwise, unless you’re a brand-name company with incredible appeal, you may wind up with a lot of candidates, but a lot of mediocre candidates."
Attract desirable candidates through a well-designed corporate Web site, job boards, professional journals, job fairs and highly targeted advertising. And use recruiters--internally or externally--who understand the needs of the organization.
3. The computer will help an organization work faster and better. Faster, yes. But better, only if you use the system effectively. Unfortunately, "too many organizations take an entirely myopic approach to applicant-tracking systems," says Weddle. "They wind up using them for ad hoc sourcing." Indeed, a recruiter searches the database to find the candidates of the moment--usually the first names that pop up on a list.
A better approach, Weddle says, is to identify prospects up front, communicate with them regularly and even pre-qualify them. Then, when an opening occurs, it’s possible to speed up the hiring process and slot them into a position--with a much higher rate of success.
4. Today’s applicant-tracking software doesn’t require training. One of the biggest mistakes, says Jim Holincheck, a research director at Gartner, is unleashing human resources staff and recruiters on a system without adequate training. That can lead to bad searches and interviews with unqualified applicants. Simply typing in keywords is no guarantee of success. An applicant could be studying for an MBA and play Chinese checkers as a hobby but appear on a search for MBAs who speak Chinese. "Candidates are getting smarter and stuffing résumés with keywords," says Scott Johnson, a human resources business consultant at Household Finance, a Prospect Heights, Illinois, lender that receives more than 1,000 online résumés each day. "The software must have an artificial-intelligence component, and recruiters and line managers must understand how to use it correctly." With AI, the software can analyze word patterns in a résumé and discover whether an applicant might qualify for a certain job, and do it better than a run-of-the-mill keyword search can.
5. A good applicant-tracking system makes interviewing and background checks less significant. While an applicant-tracking system can generate a list of solid candidates, that’s only the starting point, Erker explains. "A company still has to be very good at interviewing candidates, and it must use screening tools and background checks to ensure that the person has the skills and integrity that are desired."
Without the right mix of systems and tools--and an appropriate understanding of how to use them--line managers and others will likely find themselves hiring the wrong applicants. An organization could find itself staring down the barrel of high turnover, increased labor and recruiting costs, theft, drug use and an array of other problems.
6. All systems are created equal. While many of today’s applicant-tracking software tools function in a similar way, there are significant differences between various products. "All organizations are somewhat idiosyncratic, and what works for one might not work for another," Weddle explains. What’s more, some products are better for certain types of organizations--or certain industries. Too much emphasis on the up-front price can torpedo ROI down the line. "It’s often necessary to customize a system to handle specific challenges or problems, and have special reports and forms available," he adds.
Without the right product, a company can find itself boxed in and forced to use a system that creates more problems than it solves.
7. A good recruiting and applicant-tracking system will force a company to put effective business processes in place. Nothing could be further from the truth. The most outstanding system in the world can wreak havoc if an organization doesn’t have solid practices in place to support recruiting and hiring. "It’s important that an organization understand the business problem and what it is trying to accomplish," Holincheck observes. In fact, the underlying business issues affect not only the decision about which product to purchase, but also how the entire process of recruiting and hiring takes place. That can mean scrutinizing everything from job descriptions to the formal requisition process. Johnson, from Household Finance, adds: "Many companies believe that once they launch a program, they can sit back. There are ongoing issues related to productivity, training, evaluation, metrics and system compliance. In reality, it’s an always evolving and ongoing process."