Applicant Tracking Software Buyer's Guide

2023 Applicant Tracking Software Buyer's Guide

There are two broad classes of Applicant Tracking System users. The first are businesses that use such systems for their own hiring processes, and the second are recruiting agencies that use such solutions to handle hiring operations on behalf of their clients.

There are many similarities between both software solutions and we'll focus on the solutions businesses use for their own hiring processes.

How Efficient Is Your Hiring Program?

Companies have thought out their candidate sourcing processes carefully if they are able to achieve the following results:

  • 94% of new hires choose to stay on beyond the first year
  • At least 80% perform better than expected
  • Management satisfaction with new hires rises by an average of 15% annually

Good hiring programs do not end with the offer letter; they also provide a clear checklist that takes their new hires through a well-defined onboarding process and offer relevant resources for the new employee to acquire the necessary knowledge to become an effective team member. This further helps in the retention of good employees.

How to Use Technology for Acquiring Talent

A few years ago, applicant tracking was just a module in HR Management solutions that businesses used. Resume parsing, candidate sourcing and online recruiting were the basic features of such solutions. Now organizations understand the complexity of the task, and are looking for solutions that are specifically tailored for online recruiting. It has been estimated that as many as 84% of the businesses that are doing a great job attracting and retaining top talent are using specialist Applicant Tracking Systems.

Modern Applicant Tracking Systems have gone way beyond what traditional HR systems were capable of. Previous systems were used to process resumes and keep track of applicants. Modern systems encompass a much larger range of activities. These include:

  • Managing automated job postings
  • Requisition management
  • Candidate acquisition
  • Search management
  • Interview management
  • Candidate communication
  • Employee referrals
  • Self-service portals
  • Video tools
  • Pre-screening
  • Social Media integration
  • Improving candidate experience
  • Reporting features
  • Compliance with Federal Contract Compliance Programs
  • Compliance with Equal Employment Opportunity Laws

Are You Ready for an Applicant Tracking System?

Many small businesses may be able to get along without a formal Applicant Tracking System, while for others such a system may be absolutely mandatory. Look at the list below and tick off the items that apply to you. If you find yourself checking several points from the list, you would benefit from deploying an ATS.

  • Does paperwork consume more time than the actual interview?
  • Do important positions tend to lie vacant for long?
  • Are you finding it difficult to ensure compliance with the regulations affecting hiring?
  • Are you aware of how efficient (or not) your current hiring processes are?
  • Is it proving difficult to handle the large number of resumes you receive?
  • Does your business need to hire staff seasonally?
  • Are you using manual processes to interact with candidates?
  • Do you have to dedicate a person specifically to handle the hiring process?
  • Are you posting jobs manually to job boards?
  • Do you have an updated database of pre-qualified candidates to choose from?

How to Understand and Analyze Your Current Recruiting Processes

Before businesses approach vendors to learn about solution details and ask for demos, it is important to understand their existing applicant management processes. They must be clear about:

  • Any systems currently in use to screen applications and applicants
  • Initial screening processes
  • Interview processes
  • Additional assessments being conducted, if any
  • Procedure for background checks, reference checks, etc...
  • Procedure for employment letter creation and approval

Several people may be involved in the above processes. They must be identified and roles should be clearly stated.

Once the above is clear, you should be able to draw up a few specific instances of how candidate selection is actually carried out. These instances should deal with the cases you most often deal with so that vendors have clarity about what you will mostly use the solution for.

What are the Top Applicant Tracking Software Features?

Feature lists can be broken down into three groups - basic, intermediate and advanced. Most implementations will have all the basic features and a selection of the intermediate or advanced features.

Once a business has an understanding of its own hiring processes, feature selection is much easier.

Basic Features:

  • Managing requisitions
  • Creating applicant profiles
  • Resume management
  • Managing job boards or careers section of company website
  • Automated job posting
  • Application management:
    • Auto responders to applicants
    • Review in bulk
    • Text search features, resume parsing
    • Filters and sorts
  • Applicant pre-screening processes and customizable question lists
  • Initial candidate short listing
  • Communication tracking and management
  • Pre-employment tests / assessments
  • Interview management:
    • Scheduling tools
    • Create custom interview workflow
    • Aggregate candidate scores
    • Generate offer letter
    • Generate rejection letter
  • Compliance
  • Managing workflow:
    • Assigning roles
    • Assigning rights and permissions
    • Assign and manage tasks
    • Provision for email templates
    • Track communications
    • Collaboration tools
  • Detailed reports (standard and custom reports)

Another basic consideration is ease of use. Previously, hiring software was meant to be used only by recruiters. This is not the case anymore; modern ATS is used by employees and candidates as well. An increasing number of qualified candidates expect the process from job search to final decision to be smooth, transparent and quick. Therefore, ease of use has become an important parameter.

Reports are also important, because executives will require a quick overview of the selection process. They also help in documenting compliance with existing laws and regulations.

Intermediate Features:

  • Video Interviews
  • Managing referrals by existing employees:
    • Manage employee logins and profiles
    • Follow up and feedback on referrals
  • New employee on-boarding
  • Background checks
  • Certification checks
  • Checking referrals
  • Integration with HR software
  • Social media connectivity and use
  • Self-service portal for candidates
  • Automating appointment letters
  • Track candidates who may be a fit in the future

Managing referrals by existing employees is extremely important. Nearly a quarter of all successful hires are a result of referrals from existing employees. On-boarding of new employees is equally critical, because it ensures the employee fits in fast and becomes productive quickly.

Advanced Features:

  • Recruiting via social media - talent search, job posts and preliminary candidate selection over primary and niche social media sites
  • Smartphone compatibility - an ever increasing number of job seekers use their smartphones to search jobs. Any new ATS must be responsive and optimized to function over different devices.
  • Improved self-service capability - permit candidates to appear for skill tests even before they reach the interview stage

How to Choose the Best Applicant Tracking Software 

Once you have short listed solutions you find suitable, the next step is vendor selection. It is important to check how long the vendor has been in business and the size of their customer base. Ask for client references and visit them to see the solution running in a live scenario, as it's a good idea to speak to the actual users of the system.

It is important to find out the quality of support the ATS vendor provides, and how responsive they are to customer calls and requests. There are a number of review sites that should be visited to read what users have to say about the solution you are considering.

How Much Does Applicant Tracking Software Cost?

There are several pricing models in use. Typical costs are shown below.

  • Pay per recruiter: values of $60 to $99 are typical
  • Pay per employee: $4 to $7 per employee with further reductions as the number of employees increase
  • Pay per opening: up to $20 per job opening
  • Pay per applicant: under $1 per applicant processed

In some cases, there could be a set-up fee in addition to the above charges.

What are the Deployment Options for Applicant Tracking Software?

Both web-based and on-premise options are available. Web based solutions are easier to deploy because very little set-up is required. Managing data is simpler and you do not need any additional staff to manage the solution itself. Being web-based makes it easy to connect to the careers portal via a smartphone, something that candidates are increasingly looking for.

Deploying the solution on your own servers makes sense if there is a requirement for extensive customization or if you have some very specific requirements that cannot be met by a web-based solution.

It has become critically important to fill important vacancies fast. However, businesses must follow a carefully structured process to sourcing the right candidates. Using a well designed Applicant Tracking System ensures that the selection process is objective, responsibility for various actions in the recruitment process is recorded, compliance with various laws that affect recruitment is assured and candidates have a good experience going through the selection process.

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