Applicant Tracking System software or ATS, for short, is a centralized tool where recruiters and talent acquisition teams manage candidate sourcing, evaluation, and hiring from start to finish. The information in the tool is used by recruiters to screen candidates, test applicants, schedule interviews, manage the hiring process, check references, and complete new-hire paperwork. Applicant Tracking Systems automate recruitment process and enable the recruiting teams to hire faster and be more organized.

LinkedIn defines an Applicant Tracking System (ATS) as a hiring system of record that streamlines the entire recruiting process from receiving applications to hiring employees. They come in all shapes and sizes, offer a variety of features, and can be appropriate for any type of growing organization that values efficiency.

ATS BenefitsAccording to Capterra’s research, 94% of recruiters said that ATS had positively impacted their hiring process. Organizations that had used ATS reported a decrease in unproductive time by 75%, a 15% decrease in time-to-fill, a 70% faster report creation, and registered 10% more placements per month than those firms which had not opted for ATS.

In this blog, we will be discussing various financial and operating metrics, and other key features and described how organizations had benefited by implementing ATS, and how it had impacted them by evading the ATS:

  • Reduce Time-to-Hire
  • Improve Quality of Hire
  • Low Cost-per-Hire
  • Building an Effective Talent Pool
  • Automating Resume Sourcing using ATS
  • Applicant Tracking System – Revenue Generation Tool
  • Higher Return on Investment
  • Automation with ATS
    • Chatbots
    • Email
    • Text Messages

An Essential Tool to make Recruitment more efficient..

Applicant Tracking System is one of the most common software used by recruiters and talent acquisition teams. ATS is used by 99% of Fortune 500 companies and is also popular with Small and Medium size businesses (SMBs) as it offers solutions to recruiters’ problems irrespective of the size or industry they belong.

ATS tool has the potential to cut down the time and cost to hire a candidate, source highly qualified candidates, build a talent pool for future hiring, and increase the revenue for the organization by automating the non-productive work of the recruiters. Here is the list of key financial and operating metrics of recruitment teams and organizations.

Reduce Time-to-Hire:

Organizations measure varied recruitment metrics to understand the effectiveness of their hiring strategies, but time-to-hire is one of the most widely used metrics in the recruitment industry. Google defined Time-to-Hire as the number of days it takes a candidate to move through the organization’s hiring process, from responding to the job opening to accepting the job offer. From a broader perspective, organizations measure average time-to-hire to measure their overall hiring strategy. According to  LinkedIn, only 30% of companies are able to fill an open position within 30 days. The other 70% of companies take anywhere between 1 – 4 months to process a new hire.

Organizations are always seeking new methods to decrease the average time-to-hire, and one of the best ways to do it is by leveraging recruitment software like ATS. According to the GetAPP survey, a whopping 86.1% of respondents mentioned that using an ATS software had reduced their time-to-hire. The ATS software automates the process and reduces the burden on the recruiters by freeing them from unproductive tasks. Organizations that had embraced ATS had resulted in faster time to hire as the ATS software would automate many of the unproductive tasks like resume parsing and screening, rejecting unqualified candidates, email automation, and interview scheduling.

Organizations that are accustomed to traditional recruiting methods and have not opted for ATS would have noticed that their time-to-hire is substantially high. This is due to the unproductive tasks performed by the recruiters as they would spending half of their time on adding data to excel tracking sheets, screening resume word by word and decide whether to reject the candidate or shortlist for the first round and writing hundreds of emails every day. With the increase in unproductive tasks, recruiter’s core job, talking to candidates, and closing the position generally takes back seat, which directly impacts the average time-to-hire.

Improve Quality of Hire:

Quality of Hire measures the value new hires bring to the company. How much will the new hire contribute to an organization’s success in the long run?

According to LinkedIn, 39% of large organization leaders agree that the Quality of Hire is the single most valuable metric to evaluate their team’s performance. Highly qualified candidates are available on the market for hardly ten days, and if the recruiters don’t act in time, there is a possibility of missing out on top talent. By speeding up the recruitment process, firms increase their chances of hiring top-notch talent.  Organizations that have adopted recruitment software like ATS are able to find candidates quicker as most of the automated tasks are handed by the ATS software. According to the GetApp survey,  78% of recruiters who had used ATS software were able to improve the quality of their hires substantially.

The majority of ATS have the feature of ranking top candidates based on the keywords (e.g., Taleo names it as “REQ RANK”). Based on unbiased ranking, recruiters can shortlist highly qualified candidates and move them up in the recruitment funnel. Organizations that haven’t adopted ATS software cannot judge candidates and rank them accordingly. On the other hand, recruiters in these firms would engage in unproductive tasks that will impact the time-to-hire and result in not sourcing enough qualified candidates.

Low Cost-per-Hire:

Cost-per-Hire arguably is one of the most important metrics in the recruitment industry to track the recruitment budget. Cost-per-Hire is the average amount spent by an organization to hire a candidate. Cost-per-Hire includes internal costs like a recruiter’s salary and external costs like a subscription of job boards and ATS software. For recruitment companies, time is money. The average Cost-per-Hire for a candidate is US $4,000, and organizations are implementing different strategies to cut the cost of hiring new candidates – automating the customer service by using bots or implementing Applicant Tracking Systems.

Implementing ATS systems had resulted in low cost-per-hire. Using the ATS, organizations were able to build a large database of candidates that can be sourced for similar openings in the future. Job boards were no longer required for sourcing candidates, and organizations were able to save external recruitment costs on job board subscriptions.  Without adopting ATS, organizations had faced difficulty in controlling their external cost as they had purchased a subscription of more than one job board regularly.

Builds an Effective Talent Pool:

Talentlyft describes Talent Pool as a place or database where recruiters and HR Managers keep all of their top job candidates. Talent pools make not only candidates that have applied for jobs but also sourced, referred candidates, silver medallists, and candidates that have willingly joined your Pool in an inbound way.

Building a talent pool is a long and tedious task. Recruiters source hundreds of candidates for an open position and shortlist very few highly qualified candidates who are available in the market and will accept the job offer. Majority of the rejected candidates might be highly qualified candidates, but due to various reasons (candidate not actively looking for a change, the position that perfectly suits their skillset is not open or filled recently, recently shifted to a new job, expecting more salary), they are rejected for the current openings.

Using the ATS, recruiters can build a database of such candidates for future positions. When a relevant job opening opens, ATS software will resurface all suitable candidates in the database, and the recruiters can start interacting with these potential candidates.

On the other hand, organizations or recruitment firms that use traditional hiring methods without adopting modern technology like ATS cannot build their own database for future job openings. Such organizations require job boards for every job opening, and this will result in an external cost for subscriptions of different types of job boards and need additional resources to close the open positions.

Automate Resume Sourcing:

Sourcing is the proactive searching for qualified job candidates for current or planned open positions. In the competitive talent market, resume sourcing is probably the most valuable job responsibility for any recruiter. The majority of the highly qualified candidates don’t apply for jobs, and it’s the recruiters sourcing skills that will find highly qualified candidates.

ATS systems have pre-defined Boolean search functions that can automatically search candidates based on the job description or keywords provided by the recruiters. ATS will turn every shortlisted candidate profile into a standard format as its “parses” the resume, meaning it pulls out all the required details of the candidate and enters them into the database. ATS automates resume parsing saving a considerable amount of time for recruiters to concentrate on other urgent tasks.

Sourcing candidates without recruitment software might not yield the desired results. Recruiters might be fortuitous to find a couple of highly qualified candidates without the help of ATS software. Still, in the long run, it is improbable to find such candidates regularly.

Applicant Tracking System a Revenue Generation Tool:

The aim of any organization irrespective of its size and nature of business is to increase its revenue. Implementing latest technology will assist the organizations or recruitment firms in increasing their revenue and decreasing the overall cost of the operations. Applicant Tracking System is one such technology tool that generates constant revenue for the organizations or recruitment firms as the positions are filled faster, as recruiters had freed themselves from manual tasks (majority of manual tasks are automated by ATS). According to research conducted by Recruitingblogs a small company with only eight employees can save up to US $10,000 in time and effort using an ATS.

For corporations and large companies, ATS assists in filling the position faster, and it means that critical revenue-generating roles are filled faster, or strategic roles get filled in a shorter time-frame, resulting in new business units that generate more revenue.

High Return on Investment:

For businesses, it is always tricky to predict the return on investment (ROI). They are different types of pricing for SaaS-based Applicant Tracking System (Pay per Recruiter, pay per job opening/applicant, Flat fee, & freemium models), and on the average, it costs around US $10 to US$ 100/month/user.

Below we have mentioned an example that will help you to understand how the Return on Investment (ROI) is can be calculated for your organization if you are planning an ATS

Scenario 1:

Company A is a large organization that had not implemented any ATS for its recruitment process. For 100 applicants, they had to shortlist ten candidates (10% of their total Applicants), and at the end of their recruitment process, they would offer a job for 10% of the shortlisted candidate (i.e., one candidate from above 100 applicants). The total Cost-per-Hire for each candidate is US$4,000, and most of the cost is spent on job boards.

Scenario 2:

If same Company A had implemented ATS software, then recruiters were able to source twice the candidates. In this scenario, they were able to source 200 resumes and shortlist 20 best candidates. As mentioned, the organization is still willing to hire 10% of shortlisted candidates, and hence they hired two candidates.

In the second scenario where Company A had able to up their hiring due to adopting modern technology like ATS, which had decreased overall time spent the recruiters in the resume sourcing as the ATS had automated the candidates and ranked them accordingly. Furthermore, Company A had the same number of recruits, but their output was doubled as the unproductive tasks like resume parsing, resume source, the ranking of candidates had been effectively handled by the ATS.

Applicant Tracking System and Automation Tools:

ATS Integration with Chatbots:

For organizations around the world, Chatbots is quickly becoming the first point of contact between customers and customer service executives. Recruitment chatbots are gradually making their presence felt for both candidates and recruiters. The recruitment chatbots have performed recruitment tasks like screening, scheduling interviews, answering basic quires, and gather details of the candidate for future references. Chatbots that had integrated with the ATS provided a range of functions to the organizations, and this includes:

  • Resume Parsing
  • Candidate Screening by asking experience, knowledge, and skills
  • Gathering contact details of the candidate
  • Providing an update on the status of job application
  • Answering queries for the candidate
  • Overcome the language barrier by answering the queries in different languages

Chatbots are integrated with ATS to automate the recruitment process. According to Ideal, Chatbots can automate up to 80% of the recruiting activities. Chatbots can interact with more candidates as compared to the recruiters. It is estimated that 65% of resumes received for all the open positions are ignored by the recruiters due to various reasons. Chatbots can interact with the overlooked candidates, which increases the level of interaction with candidates, and this may result in a greater number of submissions.

Artificial Intelligence will be one of the most widely used tools in the recruitment industry. The recruitment chatbots will become intuitive, intelligent, and affordable. Organizations or recruitment firms that have high-volume of hiring and AI tools will face multiple challenges such as low recruiters’ efficiency, an increase in cost-per-hire, and slow in responding in candidate’s and client’s queries. Such firms will be left behind in the recruitment race, and most likely to end up fewer submissions, and more frustrated candidates.

Integration with Email:

Emails are the most preferred choice of communication for recruitment firms, and email integration with ATS is a must-have feature. ATS integration with email providers allows recruiters to better engage with the candidates and rules out of the possibility of unread emails, forgetting to mark the hiring managers, or candidate’s emails landing in the junk folder and ignoring it completely.

One in three candidates expects an automated email sent to them after applying for the open position. With designing pre-defined templates, recruiters have been sending automated bulk emails to such candidates, and this had raised the bar for the better candidate experience.

Organizations that have not adapted to modern-day technologies like ATS ended up with communication issues with their clients and candidates.  On any given day, there would be more than 250 interested candidates for any open position, and it is highly unlikely that recruiters might have interacted with all the candidates. Organizations have lost out on potential talent due to a lack of proper and timely communication.

Integration with Text Messages:

SMS or Text Message is the most preferred tool of communication (both personal and professionals). Just like integrating email with ATS, SMS can also be integrated (using third-party apps), and the recruiters can send mass messages to candidates directly from the ATS tools. Candidates are more likely to read and respond to the email, but integrating text feature to the ATS is a smart strategy for better candidate engagement. Sending SMS with the regular updates will improve candidate experience.

Organizations that had integrated SMS with their ATS software were able to send bulk messages to keep candidates updated as they proceed through the recruitment funnel. Sending regular SMS to the potential candidates had resulted in lowering the Time-to-Fill metric and also created a stronger candidate experience. Such companies generally stand out among the crowd and have more opportunities to find better-qualified candidates while speeding up the hiring process.

Analytics and Data Analysis using ATS:

Measuring the success of recruitment and hiring strategies is difficult and challenging for the organization, but ATS can measure recruitment metrics by using real-time data. Using ATS data,  recruiters can forecast staffing needs, build a talent pipeline, maintain an active workforce at capacity, and determine the key metrics around the cost of hiring, quality of hiring, and time-to-hire of the potential candidates.

ATS had a birds-eye view on where the recruitment process is lagging – recruiters taking more time to shortlist candidates, delay in interview scheduling, delay in releasing the offer to the selected candidates, and so on and so forth. The data can be used to discuss the concerns with specific hiring managers, to find out the root cause, and to resolve bottlenecks.

One of the biggest drawbacks of recruiting without using tools like ATS is that when the whole process of Recruitment is over, there is nothing to learn for the recruiter or the organization. The recruiter attains a one-time experience, which may not be useful for future opportunities.

Business Continuity Planning:

During the ongoing COVID-19 Pandemic, many businesses, like those in the manufacturing domain, are struggling to run their operations due to the physical nature of their work. On the other hand, enterprises need to ensure the health and safety of their employees and make sure their business runs without interruptions. However, the recruitment business can run uninterrupted by using tools such as ATS.

Due to the fast-changing situation, organizations require scalable and flexible technologies like ATS. SaaS-based ATS allows users to operate remotely and work on their regular tasks without any interruptions. Organizations that have opted for ATS can run their recruitment processes remotely and hire candidates for open positions.

Recruitment firms that have ignored the warning signs and have not opted for ATS tools are struggling to hold their ground.  Such companies run the risk of becoming obsolete, as there is no longer a working system in place.

ATS – Must have tool post-COVID-19 Crisis:

Many recruiters agree that this is the time to hire high-quality candidates. COVID-19 has left many highly qualified candidates searching for new jobs. More than 36 million Americans are actively searching for new jobs. During the current crisis, only a handful of them will be able to find new jobs, and the rest of the candidates will be available for future positions.

In the past few months, recruitment companies are seeing hundreds of additional applicants than usual, and this had been a burden to the recruiters. If the recruitment firms are using Applicant Tracking Systems, they can add these candidates to their talent Pool. For those organizations which haven’t stepped into an ATS, this is the opportunity to invest in one and streamline their hiring and recruitment processes based on their needs and budget.

One Company, One Culture, One Candidate:

Applicant Tracking Systems is used to organize enterprise workflow and manage the teams under one software, which overall increases the productivity of the talent acquisition teams. ATS system is designed to reduce manual workflow and improve work done in each hour.

ATS helps in maintaining consistency of process freeing up the management bandwidth; this is due to process flows where the recruitment teams are clearly defined what their roles are and how they are expected to perform. In the ATS, every functionality links up with every other feature, connecting every department in a staffing/recruiting firm (no matter wherever they are located). The ATS system

will automate the recruitment process and will assist the organization in reaching its goals (daily weekly, monthly, quarterly, and annual goals).

Compliance and Regulations:

Compliance refers to the ability to adhere to established laws and regulations. When it comes to companies and hiring, compliance mainly involves avoiding discriminatory practices. The majority of the ATS provides a reference library that contains information about the laws applicable to the specific business based on size, location, and other details, which helps the recruiters and talent acquisition teams to understand the laws and how to comply with them.

GDPR and Data Privacy:

GDPR applies to all the companies that process data of the EU Residents. GDPR implies to all organizations that offer goods and services to EU residents irrespective of their presence in EU Regions. The Applicant Tracking Systems are data processor because it processes candidate data on behalf of the organization by following their instructions.

All the ATS software providers are GDPR compliant and follow the data privacy laws of that country where their clients are located. Having a GDPR compliant is the top priority of the organization while opting for their services. Candidates will be willing to interact with companies that are compliant with GDPR and local data privacy laws, as this will provide confidence on these companies that their data can be shared and will be deleted upon request.

Conclusion:

In the current uncertain times, unemployment is increasing, and it is always advisable to invest in modern technology like ATS software, which will cost a fraction of what companies will be spending on new recruiters. With the implementation of the ATS, recruiters and talent acquisition will free themselves from non-productivity tasks. It can hire more candidates from the same effort. For the organizations, ATS will cut down cost-of-hire for a candidate and increases the return on their investment.

During the current economic crisis, there are many highly qualified candidates available, and to manage the flow of resumes, organizations must opt for ATS systems that will build a talent pool for future hiring.

The organizations that have not opted for ATS software will be less likely to be successful in the long run as the recruiters will hold up with non-productivity tasks, which increase overall cost and time to hire a candidate. The organization needs to hire additional recruiters but result in the same output.