Put simply, hiring tends to be tricky. We could go on for ages about how crucial it is to find and retain the right people, or how the wrong hiring decision and badly managed hiring processes can be costly. We took the liberty of skipping this part and instead are sharing how we chose our applicant tracking system(ATS)and what we learned in the process. There will be two separate articles: one describing the selection phase and the other focusing on the implementation phase.
Why and when we decided that we need an ATS
Let's be clear—not every company needs to have an ATS. If your company hires 10 people annually and has only a few people involved in hiring, you probably don't need to invest in it. How did we get to the point where ATS was a must for us? Among others there are three major traits of Y Soft:
- The company is growing. More than 60 new YSofters were onboarded last year and this is a future trend.
- We’re in very fast, quickly developing industry. Therefore, hiring requirements for every role are constantly changing.
- We’re very protective of our culture and we want to hire new colleagues who resonate with our values. A solid ATS should address all these things – we should be able to do more work quicker, track and adjust requirements real time, and keep the culture aspects in a spotlight across all company hiring. Those business traits have been around for quite a while. Also, discussions about new products and company growth were run on a regular basis. Still, our recruitment wasn´t in good shape to keep up this pace.
To be specific - only a year ago we were still managing the hiring through some basic tools. Our candidate database was Excel. At one point it got so large that we struggled to even open it. Our hiring overview of open roles was another Excel. Our pipeline, hiring notes and candidate feedback were emails; our data was being manually handpicked from all these. Our forecasting was more about educated guessing than knowing. And, as Y Soft’s hunger for high quality people grew, so did our reporting needs. There was literally no other way out than looking for a solid system and having it in place rather quickly.
Business case - aka we knew what we wanted but first we needed to convince senior management
Initially we held a few meetings with Head of HR and representatives of Finance, IT and Legal to find the right way to choose, approve and adopt new software in Y Soft. We shared the high-level perspective of what we needed it for and found out what needed to be done to make it happen. We collected their tips, concerns and first reactions. The biggest barrier they saw was the price – it was hard for them to see what the benefits and savings would be, mostly because they lacked the insight into the recruitment process. For them, it seemed like a fancy tool to do quite basic stuff. The conclusion was clear, we needed to put together a solid cost-oriented business case to show the benefits.
Most probably, you might be dealing with the same issues – people in your company say that an ATS is expensive. That’s only relatively true and you will need to show them. Doing hiring badly will cost you more. One or two senior mis-hires will easily cost you the same as an ATS and cause more trouble on top of that.
Putting the business case together wasn’t easy, but eventually we got there. The critical part was the cost-benefit analysis. In other words – how would we know that an investment in ATS will pay off? When working on this crucial part, we ran into two major problems:
- Since not only the recruitment team will be using the system, we needed to take into consideration savings outside of the recruitment team. It was hard to estimate, measure or even collect enough information (for example, how much time hiring teams will save and how this translates into savings? How much time will employees save by using the referral system?)
- Cold logic says that for systems with a fixed price (you pay what you pay regardless of how many hires you make), the ROI (Return On Investments) is directly dependent on the number of hires you plan to make (more hires, higher ROI)*. This means that the information about how many hires you intend to make in upcoming years is crucial. But, be honest, does your company know? Is your business predictable enough to be able to say that? As for us – it was really hard to say.
These were the key parts of the final equation that turned into positive ROI:
+ time savings for recruiters and hiring teams on planning and scheduling the interviews manually, creating databases, passing information through emails, etc. This transferred directly into payroll costs*
+ eliminating specific international job board costs (replaced by ATS’ native integrations)
+ reducing at least 1/3 of our agency costs (replaced by a more focused referral system, CRM (Candidate Relationship Management) allowing more robust sourcing and usage of past talent pools) and the mere fact that recruiters would have more time to handle more job openings
+ time savings of recruitment and finance spent on manual reporting also transferred into payroll costs
- the yearly fee, one-time implementation fee
- implementation time transferred to payroll costs
* This is of course tricky since business can turn very quickly (Hello, Covid!). To avoid an overly ambitious plan, we started with our attrition + average yearly growth in the past 3 years.
** For example, some ATS’ claim to save you 100% of your recruiter’s time. To stay on the safe side, we allocated a 30% time savings and still got a positive ROI.
Then you have the intangible, hardly monetized benefits that are closely tied with whether your users will be able to use all the opportunities the system offers, such as:
- Detailed candidate requirements helping you to lead targeted, structured interviews
- Improved feedback loop leading to better and more informed hiring decisions
- Hiring automation leading to a happier recruitment team that can focus on what’s really important
If you try hard enough, you should be able to monetize all the benefits. If you can’t, you’ll need to have around a reliable advocate. We found great support in our Head of HR, who was able to get the buy in of senior stakeholders and speed up the approval process. Also, the fact that Y Soft is eager for any kind of automation was helpful too.
Selection process – what were our requirements and options, how we ran the process
We ran the business case approval and selection process simultaneously to save some time. The first thing we did was an initial research on various vendors. We ended up with a list of systems that might suit Y Soft’s needs. We read all available online reviews, incorporated our previous experience with other tools, a bit of gut feeling, and collected feedback from our HR colleagues in other companies.
Our initial list consisted of Jobvite, Lever, Greenhouse, Workable, Taleo, SmartRecruiters, Recruitee, Zoho Recruit, Breezy HR, and Recruits. We’re quite sure that we missed some others that might be relevant.
The high-level requirements were quite clear: we wanted a system that would be robust enough to embrace Y Soft’s complex corporate structure and international hiring needs. To put it into perspective—Y Soft has offices in 17 countries; these have variously structured HR support. Therefore, we needed a system that's flexible enough to let us have tailored hiring processes that are flexible to the situation whenever needed but is still robust when it comes to reporting and keeping the high-level overview on what’s happening within hiring.
Corporate structure complexity and specific needs translated into a list of technical requirements and resulted in an almost 40 items-long list. The selection process split into several sub-tasks. The biggest task was to take each ATS and evaluate the long list (see List 1 in the Excel file
). To get through the list, we went through each products' documentation and conducted several calls with vendors. It was also crucial to involve IT and Legal at this point—explain the objectives to them, hear their input about legal and IT constraints and preferences, and have representatives from both departments join our calls with vendors. At the end of this phase, we shortlisted 3 finalists from the original 10 vendors.
As we wanted to be sure that we know our future ATS finalists thoroughly, we invested some time into extensive testing and a full-day hackathon. At this point we tested literally everything in a sandbox environment provided by the vendor—creating a new job, setting up mail templates, passing candidates through a selection process, interview scheduling... and when we say everything, we mean everything (see List 2 in the Excel file
). Once we were done with this final check, we concluded that our #1 was Greenhouse
It’s important to note that the evaluation matrix we’re sharing is not perfect and focuses mostly on the technology requirements of these systems. That being said, you still might want to look at it if only to get inspired when thinking about a new ATS. We’ve anonymized all our evaluations since we cannot guarantee 100% correctness and don’t want to be unfair to any vendor.
How did we manage the implementation? What were our lessons learned? And how do we now enjoy our daily work in Greenhouse? We will share more in our second article about ATS.