Part 2: ATS Switching
When we conducted surveys and conversations with talent acquisition leaders across a variety of industries, one of the questions was “How long have you had your current ATS vendor?” Far and away — over 75 percent — of the respondents said “Less than three years,” with a sizable chunk of that crew saying “Less than 1 year.” Many of those TA leaders were from 500+ employee companies. They had an ATS prior to the current vendor. While we knew this anecdotally before, the stark reality is that switching is happening — and it’s happening faster than some people (on the vendor side and the internal TA side) might realize.
Why all the switching?
There are dozens of reasons why decision-makers switch Applicant Tracking Systems. Above all of them is probably “The tech was sold as doing one thing, but doesn’t seem to actually do it,” and/or the processes are time-consuming and taking away from truly strategic talent acquisition. Lever, a well-respected ATS in its own right, has pointed this out too: Oftentimes, companies end up drowning in resumes and want to do more proactive sourcing, but that requires insane (and inane) data entry to get done.
- Long time to hire: This conveys that something is working (see the next bullet too). There’s a jam-up in the process somewhere. It could be internal communication or it could be that the system is clunky and the internal team can’t use it in a streamlined way. Empty headcount, i.e. “empty seats,” is typically viewed as a draining cost. Middle managers and higher want to see it filled relatively quickly. If the perception becomes the ATS is slowing down the process, the ATS will be switched.
- It becomes shelfware: Basically, your hiring managers and recruiters don’t use it anymore and are creating workarounds or subverting the problems they see in some way. The process is probably out the window, cats and dogs are living together, and the whole thing is chaos. But if you’re paying for something and the teams supposed to use it ain’t using it, well, time to switch.
- Outdated: Think of your hiring process in the same way that the marketing and sales team think of their funnels. That’s not a perfect analogy by any means — and the debate about whether recruiting is similar to marketing has raged since the mid-1990s, if not before — but generally speaking, CRMs are better pieces of tech than ATS’ are. So if you go with a more modern ATS option, you get something that can focus more on the experience of the candidate. A-Players don’t like to be jerked around in hiring processes; they won’t come to you because of someone else — maybe a rival! — isn’t jerking them around. So if your ATS is a 27-screen process and there’s a chance to do a simple resume attachment and knock out questions, it might be time to switch.
- Size of company: As companies grow, there’s often an internal perception that they’ve outgrown their original ATS, which they perhaps bought because it had a big slice of the SMB or mid-market. This can often be right but can be a dangerous assumption too. A lot of times, what’s actually happening is that certain features exist but they’re not turned on yet — and if there were more training being done, your current ATS might be the right ATS for you, even with 200 new employees since last year. Headcount is certainly a driver, but be careful that you’re not throwing the baby out with the bathwater. Sometimes it’s just a learning issue. A few of our respondents were 1,000+ employee companies and had used their ATS for five+ years. (It was a lower number than those who were switching every three years or less, admittedly.)
- Types of hire: If you hire more for hourly positions in certain parts of the year (seasonal), or if you switch strategy to more 1099/hourly or (conversely) more entry-level, mid-level W-2 employees, the perception can be “Oh, because of the staffing strategy switch, our ATS is now outdated.” Same as above: often true, but sometimes just a training issue. When you switch staffing strategy, one of the issues is integrations — say, payroll or training for the newer type of employee. A lot of ATS have scaled up integrations in recent years and have a pretty robust suite. It’s a question of asking what’s available in the context of your new approach, and then getting trained on it.
Jon Stross, co-founder and President of Greenhouse added this perspective, synthesizing several of my previous points:
“Another common reason we see companies give for switching is that the reporting in their current tool isn’t sufficient. he reporting in my When you scratch under the surface, it’s indicative of a deeper problem. Typically, the product is hard to use and teams have built ‘side processes in spreadsheets,’ meaning the data in the tool isn’t accurate. Meaning their reports become useless. Operating in the dark like this works… right up until when it doesn’t. Maybe the CEO starts asking questions or TA isn’t keeping up with the hiring plan. Suddenly, the lack of data becomes the stated reason for switching. But the real, and sometimes unspoken, the impetus is the underlying rot of offline processes.”
Those are some of the reasons for switching. In a specific company, obviously, there might be others. One of the big ones you’ll see is “the decision-maker who bought this software just left.” That usually creates a switch.
So what should you focus on in terms of switching?
In our next article, we’re going to talk more about the RFP process, but here’s a sneak peek — in our surveys/conversations, the majority of respondents said they’d use an RFP the next time they switch ATS. Their main concerns to address were: Features/Functionality; Integrations; Price/Contract Value; User Experience; and User Interface. We were a little surprised “price/contract” fell to No. 3 on that list, but we’ll explore more in the next article about RFPs. For now, figure out whether the need to switch is a product limitation or a learning/knowledge limitation. Switching is good but can be painful. Switch for the right reason.
***This eight-part series (and survey) was partially underwritten by Greenhouse.
William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.
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