HRM Direct Talent Management Blog (11)

ATS vs. CRM: Where the ATS Went Wrong

Feb 23, 2006 8:15:00 PM

A comment attached to a recent post on ERExchange finally convinced me to plant my flag on this debate.

It started when someone posted a message asking for vendors for a "Global ATS," specifically one that could be deployed in China. One person responded with a fairly detailed list of vendors and issues to consider. Jeremy Langhans replied simply:

CRM

Jeremy may not have been the first person to suggest that CRM systems are an alternative to applicant tracking, but he is one of the loudest advocates of this school of thought. Nor is he alone- a month back Jeff Hunter posted a comment on the Human Capitalist blog saying that he was starting to use Salesforce.com as a "sourcing/pre-ATS module."

Jeff and Jeremy are two of the smarter guys in this business so when they're both saying the same thing it's probably worth paying attention to. Jeremy says,

I believe, in our hunt for passive high-end & high-demand Talent, that the ATS is a dead technology. CRM is what will enable us to apply a true sales lifecycle to our acquisition methodology.

The fact that Jeff's company happens to be on Jeremy's client list only strengthens my sense that there's something important going on here.

Considering that I am an ATS vendor you might reasonably expect me to dismiss Jeremy's suggestion with prejudice, or offer an OCD-ish point-by-point rebuttal. In fact, I'm going to agree with them and say that the ATS as we know it is broken .

It's too expensive for what it does. Let's face it: the typical tasks performed by an ATS are not rocket science. It doesn't need to scale to support thousands or millions of users, and it interfaces with one, maybe two other systems. And yet even mid-market tools are often priced at two to five times the cost of upper-tier CRM packages which at first glance offer a lot more features. The productivity gains do not match the price, which explains why even 5-person companies often have CRM systems while 1000-person companies often don't use an ATS.

It's too focused on automating bureaucracy. How often have you been told to do things completely backwards in a software system because "that's the only way it will accept it?" Systems which begin their life as tools to automate bureaucratic processes often end up as enforcers of corporate "blue laws." There is nothing worse than being stuck with a clumsy process because the tool--rather than the business--requires it. A leaner process will beat a bigger filing cabinet every day of the week.

It creates too much overhead for primary users. I'm shocked by the amount of data entry and mouse-clicking most ATSs still require. Quite a few require candidate contact info to be entered manually for every candidate, or charge big bucks to parse this automatically. Similarly, many systems force users through 3-5 interface pages to accomplish everyday tasks. This is not tolerated in the CRM business because managers understand that every minute spent in the software is a minute not spent on the phone making money. This should be just as true for recruiting (which is really a sales function) but since HR's seat is often at the kids' table it gets ignored in favor of policy-following functionality that works against the P&L.

In part 2, I'll explore what this means for the ATS industry, and why CRM isn't a silver bullet.

But I hear their retirement plan stinks...

Posted by Colin Kingsbury

Feb 17, 2006 3:21:00 PM

According to a pair of studies by West Point researchers, Al Qaeda is internally run much like your average corporation, complete with benefits packages:

Indeed, some of the documents used by researchers indicate that al Qaeda has vacation plans -- seven days every three weeks for married members, five days a month for bachelors -- and provides its members with 15 days of sick leave a year.

Lest you think the pressure of competing against the many governments trying to put them out of business might cause them to operate more efficiently, annoying bureaucracy persists:

One document states that al Qaeda operatives must request vacation 10 weeks in advance, and another document outlines the pay scale for members: about $108 a month for married members, less if they're single and more if they have more than one wife.

The Talent War That Wasn't?

Posted by Colin Kingsbury

Feb 13, 2006 11:33:00 AM

Everyone knows that with the Boomers retiring, educational standards going down the drain, populations shrinking, the dawn of a global workforce etc. that we are on the cusp of a "war for talent." I'm not going to bother linking to posts. It's like giving directions to a tourist in Boston who asks where to find an Irish pub: just wander around, they're everywhere.

But what if it wasn't so? There's nothing worse for your business than a universally-held assumption. The assumption here is that in 5, 10, and 15 years it will take us just as many product marketing managers to put a bottle of dishwashing detergent on the shelf as it does today. Bad assumption.

Economics teaches us that there are two means of production: labor and capital. Labor can be deployed quickly and with low upfront cost (compared to capital), but capital can be much cheaper over the long haul. Imagine, if you will, that the government raised the minimum wage to $20 an hour. Dishwashers working in restaurants would be elated, right up to the point that the manager installed a dishwashing machine. As the price of labor rises, so do the incentives to replace it with capital.

"But there's no such thing as a product marketing manager machine!

We all understand the capital-labor equation when talking about things like factory robots and dishwashing machines, but we don't need to replace the whole worker specifically to reduce the need for labor generally. It is true that we cannot replace emotion, judgment, feel, creativity, and intuition with software or machines. But how much of our time is spent in these deeply-focused and innately human tasks? How much of our time is spent merely coordinating, aligning calendars, responding to unnecessary emails, and the like?

For many of us, the answer is "far too much." In larger companies, it is not unusual to find people who do little else, and yet they are essential because there is currently no other way. At least no other easy way. But the reward is very clear: if you reduce the unnecessary workload of a group of people by 10%, you will need fewer of them to begin with. No robots, but fewer product marketing managers.

Today, all the talk I hear in HR about dealing with the crunch ahead is focused on the "supply side:" more advertising, more recruiting, higher salaries, turnover reduction, etc. Once again, fine so far as it goes. But these are tactical responses. The strategic response to the talent war is to reduce your company's need for talent in the first place.

Want to know more? Once again, Jeff Hunter hits the nail on the head.

The Coming Google Wars- in PageRank We Trust?

Posted by Colin Kingsbury

Feb 10, 2006 3:02:00 PM

With the bloom coming off the rose, this season's favorite water-cooler game is predicting when and how Google will fall. The big story this past week was the banning and subsequent reinstatement of BMW.de from the Index Almighty for excessively aggressive search optimization techniques.

What appears as a victory for Google up close in fact presages what I believe to be one of their greatest long-term liabilities: the battle for placement. The value of getting your site in the top ten results for relevant keywords is large, and the top one or five, potentially enormous. And yet Google's herd of Ph.D.s goes on its merry way, bouncing sites up and down as they tweak. Companies as large as BMW play it philosophically, accepting PageRank as an impartial judge.

But for how long?

Google creates value by making value statements, by deciding that website A is more valuable than website B. A Google search on "Chevy Malibu," for instance, gives a link to consumer complaints about the car as the 8th result. Read those and tell me if you'd ever think about buying that car. Now tell me that GM will forever treat this as an immutable fact like the weather.

Does Google know that those postings are true? Does it present any context, to indicate whether those 25 complaints represent the average Chevrolet? Of course not, and to the average Internet technologist, the questions themselves probably sound insulting, like a television executive in 1980 asking Steve Jobs why people would spend $3000 on a typewriter hooked up to a black-and-white monitor that doesn't even show reruns of I Love Lucy. But if you're Chevrolet, the economic question is very real, and infinite variations of this issue are played out daily as the GooglePlex spits out results.

That the question hasn't stuck yet is a testament to the goodwill Google enjoys from the public at large, and the ignorance of the true value of placement among interested parties like General Motors. We, including the board of directors of BMW, trust that Google's results are truly the workings of a bunch of utterly disinterested mathematical formulae. But if you look atGoogle News, you'll find plenty of malcontents, including right-wing sites that think Google News favors extreme-left sources because Google employees donated lots of money to Democrats, and academic papers saying Google's algorithms unintentionally favor the right. This is just a foretaste of what's to come.

Simply put, you can't simultaneously be in the business of making value judgments, and at the same time escape the consequences of those judgments.

The Internet has evolved to its present state in a capitalistic Eden largely devoid of regulation and rent-seeking. But all such eras have come to an end one way or another. There is presently a strong move afoot by the cable and telephone companies to create a "tiered" Internet that discriminates between different types of content. Verizon is beginning to realize that people are using their $40 DSL lines to make free voice-over-IP calls to their friends in Europe, and Comcast is starting to notice that people like me are downloading our TV shows from iTunes and not subscribing to Cable TV. And needless to say, they don't like it. It's notable that Google is way out in front opposing this, and I'm glad they are. The question is whether Internet Exceptionalism has enough momentum to convert the rest of the public before the counter-reaction. If not, Google has more to lose than anyone.

When Office Humor Attacks

Posted by Colin Kingsbury

Feb 8, 2006 4:32:00 AM

Recruiting.com links to some funny videos at Despair.com, the same guys who brought you spoofs on office motivational posters with sayings like:

Apathy: If we don't take care of the customer, maybe they'll stop bugging us.

I'll confess that I'm a longtime Dilbert fan, and I consider Office Space to be the one of the five best comedy flicks of all time.

But there's a bitter edge to this. In my own life, I found that my enthusiasm for corporate cynical comedy waxes and wanes in direct proportion to how happy I am about what I'm doing at the office. As a result, I've always suspected that a company could probably chart the number of daily visits to sites like these and correlate it with employee morale on both a corporate and individual level.

Of course, even the best company will generate occasions for Bill Lumbergh references (NB- a little blue language) on a regular basis, and humor is one of humanity's most powerful coping mechanisms. The fact that Jane Doe forwards a website with some funny posters to her cube neighbors doesn't on its own indicate anything.

But when it starts becoming pervasive, something is going on. These gags are squarely in the tradition of the Theater of the Absurd. While Absurdism could be found everywhere, it flourished especially behind the Iron Curtain in the hands of playwrights like Vaclav Havel. The central point of Absurdism could be summed up as "No matter what you do, you're screwed." This resonated with people who lived in countries where the government said the economy doubled in the last year, while meat deliveries got cut in half. If your workforce is passing these jokes around constantly, they're telling you that working at your company is a pointless exercise whose only hope lies in escape.

Does this mean companies should ban dilbert.com and discipline anyone who makes a crack about "Hawaiian Shirt Fridays?" No, entirely the opposite, in my opinion. I think smart companies will use information like this to understand what's going on in the trenches.

Judging real morale is tough, and the larger a company gets the more opaque the situation becomes. Nobody likes a complainer, least of all when he's telling the truth, so the good people whose morale you really care about will in many cases smile and lie to your face about how they feel right up until the morning they hand over a resignation letter.

Worse Than a Wacky Email Address

Posted by Colin Kingsbury

Feb 1, 2006 5:10:00 AM

Everybody (almost) realizes that having an email address like "SpringBreak2005@hotmail.com" or "john.smith@beer.com" on your resume isn't the smartest idea.

Well, here's an even dumber one: an address that doesn't work.

Sound crazy? We were doing some data mining the other day and found that a surprisingly large percentage of applicants that come in through our clients' systems have an email address that bounces. Hopefully they managed to put down a working phone number at least.

Referral Programs in the Compliance Era

Posted by Colin Kingsbury

Jan 26, 2006 3:10:00 PM

Employee referral programs (and products to drive them) continue to have no end of ink spilled on them as we open 2006. Which is why I really enjoyed Anthony Meaney's contrarian take over at recruiting.com:

Why are referrals touted so highly? Are they really that effective? No they just make our lives easier. Look if I have a choice between hiring someone that is recommended by an employee or going through the whole rigamarole of advertising, reading tons or resumes, spending money on recruiters etc., of course I am going to choose the referral. It is a lot less work.

But is it more effective? Doubtful.

Read the whole thing.

If Anthony is right, the implications of this are significant for companies covered by the OFCCP's recently-adopted rule on handling of "Internet Applicants," which to judge by some commentary, threatens to be the Sarbanes-Oxley of the recruiting world.

Like the best-selling book Freakonomics, Anthony is flipping a rock over and asking us if things are as they seem. My belief is that referrals suffer from decreasing returns to scale, as employees move from referring the one or two truly awesome people they know, then to their cousin Jim who they see every year at Thanksgiving and Christmas, and finally to some guy they met in the bar after golf last weekend.

The new OFCCP rule complicates this by essentially requiring companies to start the process by giving everyone who sends you a resume fair consideration. At the very least you'll need to entertain those other applicants before hiring cousin Jim, and if Anthony's right, that might eliminate much of the benefit of the referral in the first place.

The Resume Black Hole and Openness

Posted by Colin Kingsbury

Jan 17, 2006 12:12:00 PM

Great article at BusinessWeek on the number one frustration among jobseekers: the " resume black hole :"

I thought I had heard it all, until a friend in Silicon Valley wrote me with her story of having made eight -- eight! -- visits to an employer, to interview with people on the management team. After that many interviews, you would expect a phone call if you hadn't gotten the job, wouldn't you? No such luck -- she got no call, no letter, not even a boilerplate e-mail brush-off. No communication whatsoever, after eight visits during which she had made friends with the receptionist and met half the managers. How could a company rationalize that kind of shoddy treatment?

Hat tip: Jason Goldberg

How the "Mushroom Treatment" Costs You Candidates
Nothing will influence candidates' perceptions of your company as trongly as their interactions with it after sending their resume. If you give them the "mushroom treatment" (kept in the dark and fed a lot of ....), they will begin to think this is how they would be treated as an employee.

Recent research shows that changing jobs is driven more by "impulse" than rational calculation. How many times have you lost a good candidate because someone else made an offer to him or her first? And how often do you think you could have offered a better opportunity?

How Open Could You Be?
Instead of hitting you with more slogans on how to reduce time to hire, I want to take an alternate route: be more open with candidates about your process. Tell them where they stand: are they on the "A" list or the "C" list? How long will it take before the next cut occurs?

When you tell people nothing, they assume the worst. They may like the idea of working for you more than the other guy, but when the other guy is getting to them faster, he's going to beat you. But, give those candidates meaningful information like, "You're very strong and we'll decide by the end of the week who we want to interview," and you may just keep them interested enough to tell your competitor they're not quite ready yet. While software like our applicant tracking system can certainly make this a lot easier to do on a day-to-day basis, all you really need to get started is a spreadsheet and an email account.

You Get What You Give
About a month ago, we decided to put the pricing for our products right up on our website. Most of our competitors do not, and some will not quote a price until they've played 20 Questions with you first.

We decided to put our pricing up in public as a way to foster trust. By putting a piece of such valuable information out in the open, we demonstrate to customers that we have nothing to hide. We had a lot of debates about this internally and it made many people here uncomfortable, and t he feeling is always that you're "giving something for nothing" at first. But as we go out and talk to future clients, many tell us, "we like that you guys don't play games with this stuff" and you realize that there is a payoff.

Prospects candidates will recognize and respect it when you share valuable information with them. While some of it will work to their advantage (just as we probably could charge some clients more than the list price), in the long run you will come out ahead as you bring more, better people on board AND make their first impression of the company a strongly positive one.

Screening Questions, Part 2: Screening for Minimums

Posted by Colin Kingsbury

Jan 16, 2006 1:59:00 PM

This is a followup to Thursday's post on how screening questions will prevent top candidates from applying. Today I'm going to describe how they can fail even when applicants fill them out.

Transparency
Probably the most common use for screening questions is to filter out applicants who don't meet the minimum requirements for the position they apply for. A typical example is a Programmer-Analyst position that specifies, say, five years experience with Oracle.

If you add a screening question, "How many years of experience do you have using Oracle," you should be able to easily filter out anyone who says "less than 5," right? The problem in this scenario has nothing to do with the technology, which is stupid simple.

The problem is that no one will answer "less than 5" because the screening process is too transparent. Applicants will rationalize reading a newspaper article about Oracle five years ago into the necessary five years of experience. At best you will filter out the people too lazy to read the job description.

The "Fake Good" Problem
But even this comes at a price, and in this case it can be high. The "Fake Good" problem occurs when your process favors resume-padders over applicants who give honest responses. Let's say 25% of the people with at least 5 years of real experience pad that to the "7-10" category. Your ATS will let you sort the applicants based on their responses, and you will proceed to review them from the top down, thus favoring the fabricators over the honest people with the same experience.

As with resume padding , jobseekers are going to learn about the mechanics of screening questions and treat them similarly. In the end, even many normally honest people will inflate their accomplishments out of concern that "everybody else is doing it." And if your hiring process--which can have enormous life consequences for the people who go through it--is based in large part on such simple questionnaires, can you really blame them?

Part 3: How and When to Use Screening Questions : Coming soon.

Screening Questions and the Cost of Information

Posted by Colin Kingsbury

Jan 12, 2006 12:03:00 PM

Read Part 2 on Screening for Minimums .

If you ask a vendor how their ATS improves productivity, one of the most popular responses is "screening questions." In my experience, it's also one of the more popular features among recruiters, albeit one that people buy and fail to use to the extent they expected. Today I want to explore the problems with this approach and how it can hurt an employer's recruiting results.

ATS-driven screening questions are typically presented to the applicant when they want to apply for a job on the employer's website. Before the applicant can submit a resume, he or she is required to fill out a webform which contains the questions. Many recruiters I speak to see this process only in a positive light: as a way to weed out all those plumbers who apply for electrician jobs, or kids one year out of college who think they're ready to be the director of marketing.

The Cost of Information
But you can never obtain information without a cost. Online application forms (as opposed to emailing a resume to an address) have a very powerful impact on the experience of the jobseeker on your website. At worst, the use of such systems will actually reduce the quality of applicants because the best people will simply go away.

Think about it: when you go walking through a mall, do stores require you to prove you have sufficient cash or credit to make a purchase before they let you in and take up their precious clerks' time? We may all have stories of scruffy rich uncles who got the cold shoulder at a Mercedes-Benz dealer but the moral of such stories usually turns out to be that the one salesperson who gave the scruffy guy respect got the deal.

The Internet is the world's ultimate shopping mall, and no matter who you are, you're competing with hundreds of other companies for the applicant's attention. You're not just a jewelry store in a mall, you're a jewelry store in a mall with nothing but thousands of jewelry stores.

Customer Service or Customer Deflection?
In many ways, screening questions are like those interactive telephone systems that your credit card company uses to make sure customers never talk to a human. They can get away with systems built for their convenience because you, the customer, have very little choice in the matter. If you could click a few buttons and switch your account to someone who promised a human at the other end of every call, things would be different. And that's just how easy it is for a casual jobseeker to click to another site.

The bottom line is, you can't do customer deflection if your customer has any kind of power. That's why Tiffany's lets hundreds of people in every day who aren't qualified to purchase their products. Implementing a labor-intensive application process will definitely reduce the volume of junk, and recruiters will feel that right away, and perceive it as a success. But what you won't notice, because you never measured it before, is that it will also reduce the number of really awesome applicants who say "@#$! this" and move on.

Read Part 2 on Screening for Minimums .

ATS vs. CRM: Where the ATS Went Wrong

But I hear their retirement plan stinks...

The Talent War That Wasn't?

The Coming Google Wars- in PageRank We Trust?

When Office Humor Attacks

Worse Than a Wacky Email Address

Referral Programs in the Compliance Era

The Resume Black Hole and Openness

Screening Questions, Part 2: Screening for Minimums

Screening Questions and the Cost of Information

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