Workforce.com

Picking the Right Applicant Tracking System

February 1, 2001
Workforce talked to the president and research manager of WetFeet.com about its report "Recruiting Technologies: Solutions for Managing the Candidate Flow," which reflects the hiring-technology experiences of Agency.com, AT&T, Johnson & Johnson, The Motley Fool, PricewaterhouseCoopers, and Unisys Corp. Workforce also interviewed several HR pros directly about how they reviewed and chose applicant tracking systems for their companies.

What prompts companies to consider applicant tracking systems?
    For many companies, it's a direct result of including the World Wide Web in their recruiting processes, says WetFeet.com's president, Steve Pollack. The Web has opened the résumé floodgates, but many companies are trying to track those submissions with systems that are not up to the challenges of volume or technology. As a result, companies are drowning in résumés, but still can't fill their open positions.

Cases in point:

Bass Hotels & Resorts
    "Bass gets around 50,000 résumés per year at headquarters alone, and the number rises to several hundreds of thousands if the individual hotels are included," says Francene Taylor, HR director. The company was using hard copy files to maintain the résumés, and it had become overwhelming.

    Taylor also was frustrated by the fact that the company was "spending too much money running ads and using agencies because we have no reliable way to capture and search résumés already submitted."

Siemens Shared Services
    Siemens Shared Services provides a range of business services, including international human resources, employee data management, payroll, and general accounting, to internal customers of Siemens, a company with 400,000 employees worldwide, as well as outside customers. Siemens Shared Services was using a vendor whose system was expensive and riddled with problems almost too numerous to list.

    In addition, Siemens was working with a major consulting company that was processing résumés into the system too slowly, with too many duplicates, says Chris Menocal, who led the project to find a new vendor.

The Futures Group International 
    At this international consulting firm, which hires consultants to do work around the world, the applicant tracking database resided in the PC of a former employee. Jackie Fields was hired as manager of recruitment with a mandate to get a system up and running ASAP. The company gets about 20 résumés each week, and has 120 employees. It also has unusual hiring needs, such as a "senior researcher in Rwanda at a moment's notice," Fields says.

How do companies decide on must-have features?
    ATS is not a one-size-fits-all product. Companies of varying sizes and recruiting needs may want different functions. Some companies are considering applicant tracking in conjunction with other components of broader recruiting management systems. In addition, companies often have to decide how applicant tracking will mesh with existing HRMS systems.

    In its report, WetFeet.com cites four elements that applicant tracking systems should offer:

  • Tracking and monitoring of inbound candidates by source


  • Tracking of candidates through the screening, evaluation, and hiring process


  • Ability to share information about each candidate, such as interview or reference notes


  • Tracking and reporting on recruiting metrics, such as cost per hire and time to fill
Cases in point:

Bass
    Taylor identified five primary requirements for her company:

  • Interface: Something that could easily interface with PeopleSoft so that the applicant information can be ported over (eliminating the need for recruiters to enter the applicant data intoPeopleSoft)

  • Search: Search capabilities--something flexible enough for any kind of search (ZIP code, keyword, etc.)


  • Ease of use: A system that was easy for the users to learn and use on a daily basis


  • Multiple options: As of this writing, Bass had not yet decided if it would host a system in-house or go the ASP route


  • Security: If an ASP is selected

Siemens
    Menocal, the project lead, took the idea of a change to Siemens' other operating divisions, and to HR leaders at each. He presented the options: 1) Bring applicant management in-house, 2) Stick with the problematic status quo system or, 3) Look at a new Web-based solution. He also brought in the current vendor to plead its case and discuss its future plans.

TFGI
    Fields needed a system that would keep track of consultants and their expertise, and allow them to apply online for various projects. She wanted a simple system that would integrate with the company's Web site, allow her to search a database, and permit her to question candidates online to help the company's system rank them for the company's specifications.

How do companies research ATS vendors?
    Companies that are not in an absolute résumé-management panic often begin by conducting an internal needs assessment, WetFeet.com's Pollack says. They decide what functionality and features they want to incorporate, and construct the business case to present to management.

    Companies that are desperate for an immediate solution might be more "reactive," says Liz Givens, WetFeet.com's research director. "They may be looking to solve the biggest pain, and are not thinking about the other things a system can do. They just want to solve the résumé-flow pain, or the fill-faster pain."

    Companies find it challenging to get information in a usable format, Pollack says. Products come to the market every day; older products introduce new features and version updates. Companies tend to gather their information from diverse sources: by listening to pitches from various vendors and by collecting information from colleagues, online bulletin boards and discussion groups, and magazines where they have read about different solutions.

Cases in point:

Bass
    Once Taylor had defined her company's requirements, she knew precisely what a product would have to do in order to be considered. She created a screening sheet to use in discussion with vendor reps, and those that could not satisfy the primary requirements were crossed off.

    That left her with three that seemed to be on target. She arranged demos of those for the recruiting staffers, who sent comments to Taylor on which products they liked best.

Siemens
    Menocal sums up his research in one word: benchmarking. He looked at the solutions selected by companies in Siemens' industry, including GE, Honeywell, and Xerox. He picked seven vendors and asked them such questions as: What do you base cost on? Is there unlimited usage? How long have you been in the industry?

    "I wanted a company who could do everything, who had a good track record," and was effective, he says. Siemens presented a comparison matrix of vendors to a group from its operating companies, and the majority favored going to a Web-based solution.

TFGI
    Fields examined 15 companies through online demos-a time-consuming process. She narrowed it down to three companies, with price the biggest factor, and did a second round of demos with the companies on the phone. Since she was hired with a mandate to get something up and running, and the commitment was for only a year, the decision wasn't life or death, she says.

How do companies secure the management buy-in?
    WetFeet.com identifies a key metric in convincing management: time to hire.

    "There are significant costs associated with open positions in an organization," Pollack says. "Companies and top management realize that for every day you don't have a sales, engineering, or marketing position filled, you're losing out in the marketplace of your main business. That's a powerful argument for adopting a tool or technology."

    It's also important for the ATS research and implementation process to have an "owner," someone who is willing to take a little risk by stepping into this new realm.

    "It's typically someone senior in the HR department," Pollack says, "the vice president, or the director of staffing or recruiting technology. It's good to have a senior person, because there are lots of people with vested interests in the status quo," such as hiring managers who want résumés a certain way. "You need to have a champion to move things forward inside the company."

Cases in point:

Bass
    Taylor says, "The numbers made a compelling case in themselves":

  • Total number of résumés received annually


  • Total number of hours spent by highly compensated recruiters entering data on candidates into PeopleSoft


  • Amount of money spent on agencies and ads for similar positions within months of each other

    "I did an ROI analysis to show that the system would start to pay for itself between 60 and 66 months," she says.

Siemens
    After narrowing down an initial list of seven vendors to two, Menocal's group invited operating divisions to hear the two companies give full-fledged demos. The companies gave detailed presentations, after spending several hours interviewing people at Siemens about their needs. They also gave cost breakdowns. The leaders of the Siemens effort picked one unanimously, and went to the VP with a recommendation.

TFGI
    Fields had a mandate to bring a system online quickly, so no additional buy-in was necessary. She arrived at a product that went live at the beginning of October, about three months after she was hired. The system allows her to do an initial screening online, tailoring such questions as "Do you speak French?" to individuals being considered for different jobs.

Looking back, what do companies say they'd do differently?
    "One thing people often don't realize when they go into these decisions is that the tool alone is not the entire game. The tool is just a component of a larger process of change in the entire recruiting process," Pollack says. Unless companies are willing to make adjustments-choosing to abandon paper résumés, for example-they might not realize all the benefits of a system. Companies also tend to underestimate the importance of training users and the amount of time required, he said. For that reason, an easy-to-use system is critical.

Cases in point:

Bass
    Taylor hasn't received the final go-ahead on her ATS project yet - something else has bumped it. "The one thing I would do differently is to get senior management approval on a fixed implementation date at the same time that they approve the project and the budget," shesays.

Siemens
    Menocal is delighted with his system thus far: résumés go in within 48 hours. Implementation was easy. The reports the system generates are great. He also likes a feature of the current site that notifies candidates when an appropriate job becomes available. The only thing he'd do differently is to skip the time the company spent on the other system. "I wish I had done this from dayone."

The last word
    In the final analysis, WetFeet.com's Givens says, the most important decision is not which vendor to choose. It's analyzing what your companyneeds.

    "If you don't know that, it doesn't matter what you choose," she says. "The process won't be as smooth."