5 Questions To Answer Before Buying an Applicant Tracking System

By: on July 30, 2015

It’s finally happened: After doing research, ironing out the details of such concepts as “project ROI” and “change management” and meeting with C-suite executives, you’ve gotten the go-ahead to buy the new applicant tracking system (ATS) software your HR team desperately needs.

But that doesn’t mean your work is done—in fact, far from it. With hundreds of different systems to choose from, you still have to sift through white papers and demos to find the right one.

If you’re successful, your new system will be a perfect fit, saving you and your department wasted time, lost applications and interview-scheduling headaches. But if you choose poorly, your new system could lead to frustrated applicants, recruiters and managers.

“20 years ago, an applicant tracking system wasn’t even a thing. There are just so many out there now. Because there are so many systems out there, do your due diligence. Don’t make a decision overnight or even over a week. We even recommend taking a month or two to actually do as many demos as possible.”

Billy Linley, Manager of Software Advice’s HR Advisor Team

Given everything that’s on the line, we sat down with Billy Linley, manager of Software Advice’s HR Advisor team, to determine the five applicant tracking questions you should ask yourself before buying a new solution. By answering these questions, you can better understand what your business requires in a system and, ultimately, be happier with your final decision.

1. How is the system priced?

In a perfect world, you’d pay for your new system once and have it for as long as you need, as you would with a toolbox, a cheeseburger and many other purchases you’ve made in your life. Unfortunately, that’s rarely (if ever) the case with ATS software—and if you budget to shoulder most of the system costs up front, you could be in for a rude awakening.

“A lot of buyers are used to the old, traditional, on-premise style, and think they’re going to come in and just pay a one-time, upfront cost,” Linley says. “Then they realize that 95 percent of the ATS market is [cloud-based], and they’re paying more on a per-user, per-month or on a total-employee size basis. They just have different pricing structures.”

Indeed, some of the different pricing structures that potential ATS buyers should be aware of include:

  • A monthly subscription fee based on the number of users who will need access to the system (e.g., Bullhorn and iCIMS).
  • A monthly subscription fee based on the total number of employees in the entire company (e.g., PeopleHR and Jobvite).
  • Pricing based on the number of job openings, applicants or resumes needing to be stored in the system (e.g., Hyrell and Workable).
  • A flat subscription fee, regardless of number of employees, users or job openings (e.g., Jazz and SmartRecruiters).

Deciding which pricing model is best will depend on your organization, but understanding them beforehand can strengthen your business case to management and help you avoid being blindsided down the road.

“Knowing how many total users are going to be on the system is going to be really helpful,” Linley advises. “This can include the total number of recruiters, the total number of people in the HR department [or] the IT department [and] how many managers or hiring managers are going to need access. That’s one big piece of information buyers should know before talking to vendors and purchasing.”

2. Will the system help you find the applicants you’re seeking?

Not all workers are created equal, nor are the ATS systems that can help you recruit them. Because of this, knowing who your ideal applicants are and what sites they prefer to visit most can help guide your purchase decision.

For example, are your ideal applicants active on Twitter? Find a system with Twitter job-posting integration. Does your company rely heavily on employee referrals? Some systems offer internal hiring functionality. You know what works and what doesn’t in terms of your recruiting strategy, so finding a system that supports your existing best practices is key.

“There are so many job boards out there, so if you’re specifically posting to certain ones, you want to make sure those systems will directly integrate with those sites,” Linley explains.

CATS ATS can post to different job boards and social media sites

Moreover, as job applicants reported in a recent Software Advice survey, actual human contact after applying and more frequent communication throughout the hiring process are top contributors to an improved candidate experience—which, in turn, plays a significant role in a company’s ability to recruit quality hires. Thus, buyers would be wise to find a system with functionality that supports this.

“Some recruiters will want some type of notification or alert letting them know that the actual application has been submitted,” Linley says. “That way, they can follow up with the applicant really quickly and get the interview scheduled.”

3. Will this system fit your business needs five years from now?

It can be difficult enough to predict where your business (and thus talent pool) will be in five months—let alone five years. But it’s important to forecast a few years ahead so you can find a system that you’ll grow into, instead of one you’ll quickly grow out of.

This is supported by findings from our latest report on ATS buyers who contact Software Advice: Company growth is the most frequently cited reason for seeking a new system, second only to the need to improve efficiency and organization.

“Different ATSs are designed for specific sizes and industries, and sometimes buyers just grow too large and they end up looking for something else,” Linley explains. “Outgrowing a current system is a pretty big pain point.”

Top Reasons for ATS Software Purchase

Top Reasons for ATS Software Purchase

Source: 2014 ATS Software BuyerView

Another big pain point? A system that is missing essential functionality. Technology moves quickly in the ATS space, which means if you buy a system built on yesterday’s needs, you could be stuck with a platform that quickly shows its age. According to Linley, there are a number of trends in the ATS industry you should look out for to stay up-to-date.

“One big [capability] that we’re talking about with buyers is video interviewing,” Linley says. “Recruiters can save time and travel expenses on hiring that way. Having an integrated ATS with an onboarding module is a also good idea. Once you hire someone, you can send them through the onboarding process to automate all new-hire paperwork and formalities.”

You should also seek an ATS with sufficient reporting functionality. If the system makes it difficult to track EEOC compliance or generate a cost-per-hire report, for example, you might find yourself with an angry boss who doesn’t have the information they need.

4. Which features do you actually need?

Should you look for the latest ATS functionality to help your recruiting efforts? Absolutely. But if you really don’t think you’re going to be using many of the capabilities in a particular system, no matter how tempting they may look, scale back a bit. Just because an ATS is popular doesn’t necessarily mean it’s right for you—something many buyers find out only when it’s too late.

“A lot of buyers hear a big name, and they think they need that system because everybody is using it,” Linley says. “But all those using it are typically pretty large companies that need a robust system to operate. So a lot of buyers find themselves paying way too much and not using the entire system. Many will go back out after their contract has ended and look for something a little more appropriate for their size and budget.”

Linley’s suggestion? Avoid the impulse purchase: Do your due diligence and take your time before buying.

“We recommend taking a month or two to actually do as many demos as possible,” Linley says. “Contact vendors and get a list of clients that are currently in your [industry] segment or [business] size for product referrals and references. Call up those companies that are using the ATS and see what they like and what they don’t.”

5. Does the vendor offer local, high-quality support?

Because software implementation and usage rarely goes as planned, having high-quality vendor support should be a big factor in determining what ATS system you choose. You should know where support is located, how they can be contacted and how reliable they are before signing on the dotted line.

“One really big question we get from buyers is where the support is,” Linley says. “Is it international? Is it located domestically? Is there a person you can actually call up immediately and talk to, or do you have to send an email or fill out a form and wait two to three days? Finding out where, and how good, that support is is very important.”

Answering these five questions can help you find an ATS perfectly suited to your needs—or at least give you a better idea of what needs to be on your checklist for a new system.

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