roadmapThere is no single piece of technology that’s more universally despised throughout recruiting’s rank and file than applicant tracking systems.

That these cumbersome, rigid legacy systems, written on a code base that’s about as outdated cuneiform, should find themselves the target of such animosity is mostly deserved.

In fact almost every one of the many potential perils the average recruiter out there today faces on the talent battlefield can be more or less directly traced to the system that they’re forced to rely on, even at the expense of recruiting efficacy, efficiency and optimal outcomes.

Recruiting Isn’t Broken. Applicant Tracking Systems Are.

1342289829500_4475179Most of what we refer to as “candidate experience” focuses largely on the phenomenon that applying for a job sucks, and knowing where you are in any given hiring process proves to be the overwhelming exception rather than an anomalism to the rules.

Similarly, whether or not your organization is ready for big data, mobile recruiting, or whatever glaring capability gap we’re worrying about this week can’t really be attributed to the fact recruiters don’t know any better; the thing we forget is, almost everyone in the talent trenches is acutely aware, through content marketing and vendor scare tactics, how broken recruiting really is.

But while we can overlook the obvious by saying specious stuff like, “technology can’t fix a broken recruiting process” or “no tool on the market can close an offer – that’s up to recruiters” make for really good retweet fodder (guilty as charged), they are completely erroneous and, pragmatically, a piss poor philosophy to begin with.

The best recruiters can overcome the limitations of any system, but those same limitations too often keep recruiters from being their best. Similarly, you can engage every social network and talent community out there, but if those candidates can’t apply because they (like most people) happen to be accessing these networks via mobile, then you’re really wasting everyone’s time.

If employer branding, recruitment marketing or inbound sourcing – activities that occupy a disproportionate amount recruitment’s relatively limited allocation of time and money – work as intended, they serve as the spokes to the hub that, technologically speaking, turns the talent acquisition wheels at every organization.

You don’t have to be an idiot to know that when an integrated talent management system and its integrated point solutions move at completely different speeds, your talent function remains perpetually in peril.

The risk assumed by the recruiters forced to ride along makes keeping hiring running anything but a joy ride, and it’s becoming clear to most talent pros that a cataclysmic crash is all but inevitable, and impending, with ever increasing ominousness.

That was one hell of an extended metaphor, but it leads to the central premise of this post: applicant tracking systems as we know them not only suck, but their traditional customer base is either on their way to aging out of the workforce or finally realize that they don’t actually have to put up with the long term contracts, consulting commitments and complex data governance that came along with on-premise enterprise implementations.

Business As Usual: Legacy Systems, Legacy Problems.ats cartoon

The moment that dotted line with an ATS or HCM vendor was signed, inevitably after a few really expensive steak dinners for your executive team and some golf getaway weekend for the HRIS P&L holder (plus ornate branded swag for the desks of all your associates), the end user’s fate was more or less sealed.

They got wined and dined, but you were the one who ended up getting screwed. Funny how that all works.

At a minimum, the contract had you locked in for generally a fixed period of 3-5 years, with a penalty for quitting early.

Not that you would, since it was such a pain in the ass putting it in to begin with, and admitting that you’d made such an epic mistake was absolutely unthinkable for the senior leaders who so passionately advocated for the system they actually took the time to slap together a Powerpoint about how awesome it would be to get buy in.

Nope. If that isn’t working, that’s not their problem. Hell, when user guides come in three ring binders, there’s no way you don’t have enough information to figure out how to use the damn thing.

This meant no matter how crappy the product support was, no matter how outrageous the downtime or unresponsive their account manager might be (he seemed awesome on the 18th at Pebble), enterprise HR technology buyers were trapped.

Once the vendor’s services team had finished their onsite and left you with nothing but a manual and bill for implementation-related T&E expenses and other miscellaneous charges.

For example, I once saw a domain registration billed at $480, since ostensibly this took a Fortune 500 company’s consulting team a full billable hour to fill out those forms. The only problem was, that same company published a ton of research related to ATS selection and pricing and end user adoption, so it was kind of a Sysyphysian effort to even attempt arguing the seemingly exorbitant surcharge.

The thousands of dollars I spent to bypass their research firewall only confirmed this was the going market rate for a fully hosted landing page. This is a fancy way of saying setting up a Go Daddy account, which itemizes “usury” as “user fee.” Man, I should have gotten that MBA.

Fighting the System: The Product Roadmap to Nowhere.

national-lampoons-vacation-1-1983This was business as usual for longer than usual in the world of HR Technology. Companies like Oracle or SAP didn’t really have to innovate, because they didn’t sell to the people who suffered most when bad decisions were made.

And there was no way that any recruiter could go make a case to their CIO that maybe the system you use for A/R or inventory might not actually be the best system for recruiting.

Recruiters learned what workarounds were needed to kind of follow the process required to pretend to be compliant, which meant doing absolutely nothing in a centralized system except make sure the candidate who was getting an offer had applied online and that the manifold fields required for simply uploading a resume on the back end were properly populated.

You kept records on a notepad, engaged almost exclusively over the phone, and used your inbox as a database so that you didn’t have to deal with that POS ATS anymore than absolutely necessary.

This created a big problem, because while processes were standardized, anything outside of a candidate record existed largely based on unstructured data that was only available to one recruiter.

The 99% of candidate interactions and meaningful pre-screen or hiring manager notes that should have been shared in a centralized location were kept off the books. This meant any recruiting intelligence or institutional knowledge acquired by talent acquisition to walk would walk right out the door along with the recruiter who found the pain in the ass associated with offline, manual record keeping somehow less painful than using that seven figure a year system.

The other big problem this created was that simultaneously, these systems swung deals with the major job board providers who diligently partnered with them to figure out ways to work paid distribution directly into the ATS workflow, which meant that either you signed another exorbitant contract to lock in a flat fee or get stuck with no available inventory in no time flat.

HR Technology: Vertical Integration and Vendor Collusion.

oracle hcmThis was, as you can imagine, a sales bonanza for both industries, and the fact that major players tended to monopolize large swaths of the recruitment marketing, applicant tracking and candidate record keeping.

The math was pretty simple: more parts of your process any vendor owned, the more reliant you were on them and thus, the more likely you would be to renew, even if you hated everything about your customer experience and wanted to blow chunks every time you so much as saw the god awful UI/UX on the backend of that thing.

Collusion between job boards and ERP providers became so pervasive that two big fish could more or less rule any pond they wanted for as long as they wanted, using the term “channel sales” as an innocuous euphemism to describe what amounted to the systemic stifling of free trade and product innovation while everyone lined their pockets and let the good times roll.

Sure, the recession sucked, but once you got rid of the software and sales guys, any HR Tech vendor could clear up the necessary overhead to sponsor yacht races, boozy boondoggles (“user conferences”) and other obviously necessary brand building and thought leadership activities.

Every public or larger enterprise HR technology provider was forced to keep face, which meant they had to allocate the budget required to have such ridiculously elaborate trade show and industry events that there was no way the other companies rubbing their last two pennies together on some stupid tweet up was in the exact same sinking ship as everyone else.

Like the sting quartet offering a superficial distraction on the deck of the Titanic, somehow the people orchestrating the HR Technology purchasing process somehow got everyone to temporarily ignore the iceberg, playing just the right notes to keep everyone’s minds off of the fact that business as usual was unusually screwed.

These tactics included stuff like having some PR agency ghost write content for your senior leader for a placement on a publication no one but product marketers read in the first place, or hiring some kid straight out of school to start some perfunctory social media initiative involving curating and creating career advice content that was little more than thinly veiled product marketing.

The ATS Black Hole: Time for A Big Bang.

big bangThis worked like a charm back when everyone needed a job – if you’re a job board who makes most of their money referring existing customers to their ATS counterparts, and to some lesser degree vice versa, putting resources behind creating as much best practices fodder around properly formatting your resume for the rules of whatever parsing provider your systems partner worked with just made sense.

Go back to 2008 and look at really any of that “hang in there” genre of content created to quiet the disquieted masses who had directed their blame (unfairly, at the time) on the platforms responsible for posting jobs, not the companies and institutions responsible for creating them.

Of course, when there were no jobs to be filled, the black hole was largely irrelevant to employers – and candidates could bitch all they wanted, which was why sites like Glassdoor existed in the first place (conventional wisdom is almost always really dumb). Experience really didn’t matter, because there was nothing to do with referrals and the economy kind of allowed retention to sort itself out without much intervention.

Of course, the 99ers are long gone – at least as an officially counted element of the official US workforce, helping bring down that embarrassingly high unemployment number a little bit. In their place are another ‘other,’ this time in the guise of Gen Y Workers, who are replacing those “overqualified” workers simply because when you’ve already set the precedent that every worker is dispensable when every dollar counts.

Gen Y workers are far less expensive than their predecessors, which explains why they’re suddenly so coveted. Employers have caught onto the concept of a widgetized workforce of marginally knowledgeable knowledge workers, and suddenly realized that University Relations are just like offshoring, but way better for that all important “employer brand,” which, let’s face it, is just another way to commoditize common sense and package it as a product.

It’s also a great way to hide the mentality of the new recruiting normal, one designed to do “workforce planning” with the data driven approach of a CEO and the same sociopathic disregard for worker wellbeing as an outplacement consultancy. The result is employer brands are a great way to gloss over the fact that workers have transformed from being our “greatest assets” to our biggest liabilities, at least from the looks of your average P&L statement.

Why pay a pension when you can pay a penalty for not paying for group coverage, and why retrain when you can restructure for a fraction of the cost? Why go to a search firm when you can build an internal sourcing function for less than one C-Level placement fee? The economics of the industry are changing as our understanding of economics as an industry changes.

Survival of the Fittest: The Future of Applicant Tracking Systems.

time_travel_dayWhile every on-premise or Tier One ERP provider out there pretends to embrace this disruption, the fact is, they’re terrified of change, which is why the days of having to talk about PeopleSoft or VirtualEdge as relevant technologies are numbered.

Hell, even their product web pages look like they’re a .midi file and a hit counter away from partying like it’s 1999.

You might as well focus on MySpace, fax machines or coding in DOS, frankly, because these are about as relevant to anyone outside the industry as the anachronisms powering many talent functions today.

The instincts of these ATS companies, ironically, is the same as their former job board partners in crime, who are feeling the same trends pushing their margins even tighter. At first, the standard defense against any problem was ignoring it and, worst case scenario, paying some analyst firm for some award everyone but potential buyers know are total BS.

But when financials keep falling because customers either aren’t renewing or are shifting their spend to really visible stuff like AdWord campaigns, search and social marketing and CRM point solutions that’s outside the purview of most ATS or job board vendors’ product positioning, then the only way to fight fire is with fire.

This first means repositioning the product through marketing (from ATS to “recruitment marketing platform,” for example, although both are still just poorly coded, largely unsearchable and highly inflexible databases that only run on Windows. But since they can log into the same shitty software by using the same credentials to see the same “custom configuration” as everyone else who’s played around with the drag-and-drop dashboard, but do so on different PC desktops (Macs are on the roadmap, and will remain there indefinitely), then boom.

For now, that means that you can keep offering the same crappy codebase and customer service as long as your sales material, marketing messaging and totally fake demo environments you stage to show customers “under the hood,” and stay solvent for another couple quarters under whatever combination of buzzword bingo happens to be successful at the moment. They’ll even change a couple times without actually changing from an ATS.

Then, the scramble will begin, and it will look a whole lot like what’s already gone on within the job board segment – rather than improve a feature set, function or capability, these businesses hedged their bets by broadening their product offerings in pursuit of becoming that holy grail: the integrated talent management system that’s THE one stop shop for everything even tangentially touching talent.

Piece of Ship: How The Market Shakeup Will Shake Out.

Even if they can’t do anything more than what BrassRing was doing when that was a thing, these vendors will say they’re capable of configuring anything around any employer who can pony up the cash to justify the development costs of building what’s already being actively sold to the customer in question as a competitive differentiator (although everyone is playing the same shell game, ironically).

The problem is, those customers have already figured out that the system you buy doesn’t matter nearly as much as the scalability, sustainability and flexibility that system can offer in terms of integrations, implementations, configurations, pricing and partnerships.

And you don’t need to be a technologist, or even know anything about technology, to look at the UI/UX of any Taleo, eRecruit or any of the other major enterprise ATS providers to realize that the biggest players in the market are about to lose at their own game.

Who’s going to replace TOP on top? The market shakeup is only just beginning, but you can rest assured that when ADP will publically go to court to fight a company like Zenefits for a market as relatively staid and simple as benefits administration (yawn), it’s going to be a catfight for the way more lucrative, way more cutthroat competition to take over the next generation ATS market.

For the record, my money at the moment is on Greenhouse, but that’s another post entirely.

No matter which startup companies successfully capture the most market and mindshare away from the traditional ATS and HCM providers, the real winners will be recruiters and candidates whose future job searches will be enabled, not inhibited, by the technology powering our processes.

At least the losers can sail off into the sunset on a pretty damned impressive yacht. Or schooner. But talent organizations would be wise to do everything they can to make sure they don’t go down with that ship. Hey, there are some times you don’t need an Oracle to see the future. You just need some common sense.

By Matt Charney

Matt serves as Chief Content Officer and Global Thought Leadership Head for Allegis Global Solutions and is a partner for RecruitingDaily the industry leading online publication for Recruiting and HR Tech. With a unique background that includes HR, blogging and social media, Matt Charney is a key influencer in recruiting and a self-described “kick-butt marketing and communications professional.”