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Channeling the Resume Flood with Applicant Tracking Systems

December 15, 2000
Related Topics: Candidate Sourcing, Featured Article
If you need skilled workers - and whodoesn’t? - be aware that HR recruiting is changing as fast as the technologythat now supports it. An economy-wide shortage of labor and an overwhelminginflux of electronic résumés are driving the growth of applicant trackingsystems (ATS) from companies like BrassRing Systems and Personic.                    

    The key driver:strong employment growth in service industries coupled with unemployment at a30-year low. In fact, the unemployment rate, according to the Bureau of LaborStatistics, declined to 4 percent in November. No wonder the InformationTechnology Association of America (ITAA) predicted last year that half the needed jobs in information technology - almost 850,000 - would go unfilled in2000, a shortage of one job in every dozen.

    Nor does thesituation look likely to change soon.

    The BLS’projections for the American work force between 1998 and 2008 call for anincrease in total employment of 14 percent, with service industries accountingfor almost all the job growth. During the same period, the supply of workers isprojected to increase by only 12 percent. 

    Statistics likethese have built a market for products that aid recruiters. “We’re seeinggrowth in this category simply because companies have a need to hire people andautomate broken processes,” said International Data Corporation researchmanager Andrew Goloboy. IDC sees the overall category of workforce managementtools -  including applications forhiring, employing and retaining workers - rising from $1 billion in 1999 to $4billion in 2003.

    One huge factor isthe number of résumés generated by online recruitment. Some 2.5 million ofthem are now online. Web sites like, where recruiters create jobpostings that generate these résumés, have led to an explosion in theirnumbers. But so have career Web sites run by corporations. A recent Recruitsoft/iLogosResearch report finds 100 percent of Fortune 500 companies will have careerssections, post jobs, and accept applications on their corporate Web site by2002. And while while 76 percent of Fortune 500 companies currently post jobs ontheir corporate sites, fewer than 10 percent use hiring management systems tohandle the flow.

    And what a flow itis. The average life expectancy of a hot résumé, says Recruitsoft, is a mere72 hours. Nor is it just the speed of turnover that’s boosting the ATS market.Because they’re easy to post and disseminate, online résumés often wind upscattershot through hundreds of corporations. “They’re being broadcast allover the world,” says Michael Foster, CEO of AIRS, a firm specializing intools to help companies search for qualified people. “These firehose streamsof résumés demand systems to filter them out and manage the result.”

    With 48 percent ofcorporate recruiters posting their job opportunities on the Web last year,according to Watson Wyatt Worldwide, the trick is to solicit résumés frompeople with the right skills, to manage that electronic information and track itthrough the hiring process.

    For onlinerecruitment is here to stay. Forrester Research believes it will grow from a$1.2 billion industry to $7.1 billion by 2005. Recruiters will increase theironline spending 52 percent in the next three years, mainly at the expense ofprint advertising and search agency fees. With numbers like these, expect to seea continuing demand for résumé management and application tracking services.They’ll give companies a leg up on finding and managing job applicants whoseworth can only continue to climb.

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