applicant tracking systems

How To: Build the Case for a New ATS

How To: Build the Case for a New ATS

Our current ATS reporting doesn’t provide clear insight into what’s working and what’s not when it comes to attracting talent and converting quality candidates to hires.

We can’t customize our applicant tracking system workflows. Instead, we’re stuck creating time-intensive, manual workarounds.

There’s no automation built into our recruiting software, so I can forget about huge time savers like feedback reminders or interview self-scheduling.

Sound familiar? All too often, talent acquisition teams are held back from dramatically improving recruiting results simply because they are saddled with an outdated or legacy applicant tracking system that was purchased as part of a larger HCM enterprise software implementation. Employers now realize that in order to substantially move the needle on talent outcomes, they must upgrade their recruiting technology to a modern ATS that is built to make recruiters more efficient and effective while responding to the sophisticated, and always-evolving, expectations of candidates.

Of course, no finance department wants to approve a tech purchase without strong justification for doing so. Therefore, it falls to talent acquisition to build the case for the purchase of a new ATS. Fortunately, building one’s case is not as difficult as it may appear. The key is to craft a rationale based on measures that, together, demonstrate the undeniable value the right technology will deliver.

Here are four important aspects to cover as you build the case for a new ATS:

#1. Paint [the Talent Landscape] By Numbers

What does the current talent landscape look like at your organization from a numbers perspective? Be as precise as you can. Instead of simply stating that your organization has more open positions than ever and that the jobs are staying open longer, cite exactly how many open jobs there are and the current average time per hire. Other data points to gather to paint a complete picture of your talent landscape include:

  • Open jobs per recruiter
  • Offer acceptance rate
  • Turnover
  • New hire quite rates
  • Cost per hire
  • Hiring manager satisfaction

Then, if you can, compare these data points to one year ago and identify which ones continue to move in the wrong direction.

Repeat this same exercise but specific to the job functions considered critical to your organization’s business success. Determine the percentage of open jobs that represent critical functions and how those data points compare to the larger landscape.

You can also gather current benchmarking data online for comparison purposes. Highlight where your company falls short in terms of benchmarking data and in relation to the goals in place for your talent acquisition team.

#2. Document All Detours

Your next step should be to uncover the hiring process gaps that are keeping the organization from fulfilling its talent needs. As an example, if your time to fill averages are too long compared to industry benchmarks, as well as feedback from candidates and colleagues, this should be documented in as much detail as possible. You may know anecdotally that too many quality candidates are dropping out of your hiring process because they’ve received offers elsewhere but quantifying this makes for a far more compelling case.

Pinpoint where the most detrimental issues are occurring. If the hiring process takes too long, is it because it there are continual delays in receiving the feedback you need from hiring managers and interviewers? Or, is it because the process requires candidates to complete an online assessment, and too many of them fail to complete that step in a timely manner? Most likely, there are a few process challenges at play, so examine all potential barriers and isolate those that negatively impacting success the most.

If your existing ATS makes it difficult to track these data points then that itself is a justification for a system change. In this instance, select several open jobs that you can track manually to gather at least some data. Use these findings to hypothesize where significant process issues exist and present your argument that, with a better applicant tracking system in place, you’d be able to analyze and address hiring process issues for the entire organization with certainty.

#3. Speak the Same Language

While the numbers you’ve gathered in steps one and two are highly relevant to your case, nothing is more powerful than speaking the same language as those working in finance and at the executive level. In other words, you must talk about the need for a new ATS in terms of dollars.

You can begin by showing your organization the daily impact of current vacancies on the business. There are various ways to approach cost per vacancy—such as salary multipliers either specific to the role or general estimates—but this is often extremely tedious to calculate, especially if the analysis has never been done before. One option is to calculate the loss based on overall average revenue per employee. Here’s how:

Total company revenue ÷ total number of employees ÷ 220 (days worked annually) = daily lost revenue

To illustrate, a company with annual revenues of $2 billion dollars with approximately 7,000 employees stands to lose $1,300 per day on average per vacancy. If there are 100 current openings, then the company is losing $130,000 in revenues every day simply because of unfilled positions.

Think about the other data points that you can translate directly into costs. For example, if your ATS doesn’t have customized workflows that support automated reminders throughout the hiring process, then that’s affecting the bottom line. Our customer Informatica was able to quantify the time that recruiters were spending simply following up with interviewers and hiring managers just to get the feedback needed to move candidates forward in the hiring process. How? They determined the average time spent per job tracking people down and then multiplied that by the average number of open jobs the team managed on an annual basis. As Rob Felicetta, Informatica’s director of talent innovation, notes, they found it was “the equivalent of a part-time team member.”

#4. Convey the Cost Savings

In addition to detailing all the hidden costs associated with your current ATS you’ll want to show your organization’s leaders how an investment in better recruiting software will lead to long-term cost savings for the business. You can offer up different scenarios, such as the dollars saved simply by shaving an average of five days off your time to fill because you now have access to built-in automations and efficiencies that you don’t have today.

Or, you can go back to your average cost per vacancy calculation and demonstrate the savings realized by reducing the organization’s total number of vacancies. Going back to the company that is losing $130,000 in revenues per day per vacancy, a 20% reduction in vacancies alone would yield impressive savings, as the revenues lost per day would be reduced by $26,000—which translates into more than $5.7 million annually.

Building the case for a new ATS doesn’t happen on its own, but the effort is well worth it. Not only will you be armed with the invaluable information required to get purchase approval, but you’ll also have a framework to better assess potential vendors and to serve as the foundation for measuring success and proving talent acquisition’s value to the business long after your new system is in place.

Looking for additional inspiration to build your case? Learn how PMG used data to identify and eliminate hiring process bottlenecks and how Randstad built a data-driven HR practice with the support of GR8 technology.

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