Applicant Tracking Systems: A Practical Guide For Small Businesses
Is hiring holding your company back right now?
We talk to small and medium sized businesses every day, and over and over they tell us about how difficult it is to fill their positions at all right now, much less fill them with great people. The economy has changed to favor the job seeker quite a bit in the last few years.
Luckily there are some great tools out there that can help you hire better and faster right now.
The advent of the internet left few things unchanged, and hiring is certainly no exception. One of the ways it’s actually made things more convenient is with applicant tracking systems that help you recruit candidates, organize your hiring and stay compliant with relevant hiring laws.
Should your company or organization use an applicant tracking system? What are the benefits? What does it cost?
We’ve put together all the information you need to understand what an applicant tracking system is, the benefits of using one, and the answers to common questions about them.
We’ve also included information you need to evaluate any software you’re considering so that you can make your final decision more easily, and we’ve broken out all the important features, and discussed the pros and cons of each.
What is an ATS?
Applicant tracking systems are web-based software applications designed to help companies and organizations recruit candidates, organize their hiring process, communicate with applicants, screen candidates and stay compliant with OFCCP, Equal Employment Opportunity Commission (EEOC) and state and local hiring regulations.
Companies find applicant tracking systems useful because hiring is often a complicated process. Whether you’re bringing on just a few employees per year or several per month, there’s a lot to keep up with.
And if you’re a small business owner or a hiring manager working at a growing small to medium sized business, hiring is likely to be one of several critical tasks you’re responsible for.
Having well-designed applicant tracking software that you can access wherever there’s an internet connection can save you time and, perhaps more importantly, help you attract and hire the best applicants.
Prices of applicant tracking systems can vary quite a bit, as can the pricing model.
Applicant tracking system providers may charge you for the number of users within your company that can access the software, for the number of applicants you have in it, for each job you post, or the total number of employees you have.
Prices can range from free (for a very small number of applicants), to thousands of dollars per month for enterprise-level software. For small to medium sized businesses you can expect to pay between $200 and $400 per month for a fully featured ATS that comes equipped with recruiting features, such as automatic job board posting.
Compared with the amount of time a good ATS can save you, the price is usually well worth it.
How does an ATS work?
How an ATS works can vary quite a bit, depending on the software. Some, mostly enterprise level AT systems actually scan resumes for keywords and automatically bring candidates that seem the best match for a position to the top.
This helps large HR departments quickly get through hundreds or even thousands of job seeker resumes.
We’ll get into the pros and cons of this feature later.
The majority of AT systems for small to medium sized businesses take the place of manual processes, such as individually posting jobs to multiple job boards, communicating with applicants one at a time via email and tracking their progress through your hiring process with a spreadsheet.
They bring these functions together in a single web-based software application. This (ideally) uses best design practices to make it so that anyone can use its features with little to no training.
Should you use an ATS?
Ok, so we’re a little biased - we wouldn’t have built an ATS for small and medium sized businesses if we didn’t think they should be using them.
But there are some objectively good reasons you should use AT software for talent acquisition and some especially good reasons that now is the time to start.
We’re in the midst of what is perhaps the biggest talent shortage in U.S. history, with the most jobs going unfilled ever, the lowest unemployment rate in 10 years, and the lowest number of jobless claims since the 1970s.
It’s also taking a record amount of time to fill positions. The latest statistics have time to hire hovering between 27 and 29 days.
If you’re a job seeker, it’s a great time to be on the market. But if you’re a hiring manager, human resource manager, recruiter, or business owner, you’re probably a bit stressed about hiring.
This is where a good applicant tracking system can help.
First off, it should help you with the process of writing a good job ad, or job description. Getting this simple part of the recruiting process right can have a huge effect on talent acquisition.
Second, an ATS will help you stay organized from beginning to end of the process. This is important because when you’re in a tight job market, a job seeker will often have multiple companies expressing interest.
If you drop the ball and miss an email or a phone call, or get behind on reviewing applicant resumes, you may lose a great candidate to a better-organized company.
A well-organized process should also help you shave some days off your time to hire overall. It’d be nice to be well under the 27-day average!
Also, the time you save overall in posting jobs, communicating with candidates and keeping the process organized will help you find the best candidates faster and keep them moving through the hiring process, which will increase your chances of getting to hire the best candidate.
Building a Hiring Process with an ATS
At some point, most companies realize they need to build a repeatable process for all of the important tasks that help them run their business, and talent acquisition is no exception.
If your company creates a hiring process that is followed each time a new hire is made, you’ll have something you can measure and tweak to improve its success, and you’ll eventually have a continuous funnel of new employees.
This is where one of the main benefits of using an ATS shines - it helps guide and organize your hiring process, starting with the recruitment phase, from creating a job description that attracts the right applicants to getting that description in front of the right candidate. It also helps create a process for communicating with candidates, setting up interviews, and screening.
Of course, this means that the applicant tracking system you choose will have a huge influence over what your hiring process looks like.
For this reason, it’s important to test drive an ATS first and see how it works for your company. In an ideal world, not only will it support your current hiring process, but it will make it easy for you to improve it.
If an ATS gives you a free trial that’s long enough to actually hire an employee through it, that’s the best way to give it a test and see how it changes hiring at your company.
Ideally, it will attract more applicants than you usually get, make it easier to sift through applicant resumes, improve overall communication between you and the candidates, and help you get to a final choice that you’re excited about.
Write a Great Job Description
The job description is one of the most important parts of your hiring process.
As we mentioned, we’re in a really tight hiring market right now. Job boards have a lot of postings for nearly every position. If you write a job description that stands out, tells employees why this is the job they should apply for and is formatted to be easy to read and understand on any device, then you’re at an advantage.
Good applicant tracking systems will walk you through the process of applying step-by-step, and help you create a great job description that’s optimized for job boards.
They will also format your job description in a way that makes it easy to be read online on any device. And they will allow people to easily apply from any device.
Imagine your ideal candidate. This person is already busy because like most great potential hires these days, they already have a job. On their lunch break, they decide to check their favorite job board really quick from their phone, just to see what’s out there.
If your job description is well written and mobile friendly, it’ll catch their eye. And if it’s set up so that applying from a cell phone is easy, you’ll get them to apply right then and there, before they forget how they found your job, or stumble across a competitor’s job posting.
That’s one of the ways that a great job description, combined with a modern applicant tracking system, can help you get more top applicants for your jobs.
Job Posting with an ATS
Once you’ve got a job description in hand, it’s time to get it in front of the right people. Not all applicant tracking systems will provide the functions of recruiting software, but the best ones will. This feature will save you lots of time by letting you instantly broadcast your job description to multiple boards, rather than requiring you to copy and paste your job description to all the job boards relevant for the position.
It’s hard to predict which job board will be the one that your best applicants will be using at any given time, so an ATS that makes it simple to post to many of them at once will help you quickly increase your coverage, and make it more likely that you get your job in front of the right person.
A solid AT system will also make it really simple to create a careers site without having to make changes to your company website, involve someone from IT or hire a web services contractor.
This can be a stand-alone web page or a web page linked to from your company site that displays your open job positions and makes applying for them dead simple.
People who want to work for your company and take the time to come to your website to see if there are openings are likely to be motivated candidates. You want to make it easy for them to find out what positions you’ve got available and apply.
This can also make it easier for word of mouth and referral applicants to find you. If someone mentions to a friend that your company is hiring, that friend should be able to find the position by navigating to your website.
Finally, great careers pages will make it easy for people who come across your job to share it with others via email or social media. Maybe someone who came to your site or found your page through a job board is not the right person for the job, but they may know someone who is. There’s no reason you should miss these opportunities.
Candidate Screening with an ATS
Most companies go through several steps to screen their candidates and ensure they’re getting the best. After all, a bad hire can be quite costly, up to 30 percent of an employee’s salary by U.S. Department of Labor estimates.
Ideally, your screening process doesn’t just help you avoid a bad hire, it helps you find the best hire out of all the possibilities.
But it can get confusing knowing what stage of the process a candidate is in, and cost a lot of time when you get dozens or even hundreds of applicants for a single position.
Has each of their resumes been reviewed? Did they answer your initial screening questions? Have they had a phone interview and background screening? Did you exchange any emails with them about face to face interview times?
Applicant tracking software will help you keep all of this organized with a well laid out user interface that shows you exactly where each of your candidates is in the interview process.
They should also make it easy to send a bulk email out to your applicants. This is especially important once you’ve made a final decision.
Often times, after we’ve gone through the hiring process, the candidates we’ve declined are the last thing on our minds.
But it’s a mistake to ignore them, or make them wait for weeks to learn that they didn’t get the job. Those people that you’ve passed over this time may become your ideal candidates in a few years. They may also know great candidates that are considering sending a resume to you.
If you give them a bad candidate experience now, they may be reluctant to consider or recommend your company in the future.
I recommend using the bulk email sending feature on your ATS to send all the declined applicants a message letting them know that you’ve declined them, telling them about who your company chose for the position and why they were the best choice.
Focusing on the reason why you chose the person you did rather than why the person who was declined didn’t measure up usually gets a better reaction.
Also, this allows you to write a single email that works for every candidate that applied and should be fast and easy to write.
This is just one of the ways a good ATS can save you time and help improve your overall talent recruitment.
Enterprise ATS Systems
If you do research on applicant tracking systems, you’ll surely come across some of the big enterprise level ones. These were designed with corporations in mind, and are meant to handle large candidate loads and more complicated hiring processes for big human resources departments.
Some of the more popular ones you’ll see are:
Bullhorn’s enterprise ATS is used by big staffing firms such as Kelly Services and Randstad. They focus on easy scalability and have an API that allows corporations to connect their own software applications with Bullhorn’s.
Cats is used by large companies such as Gibson, Manpower and OWN. It focuses on flexibility and advanced resume search that allows boolean search functions. This lets you combine multiple search terms with connector words, for example, “electrician AND licensed.”
Greenhouse has done well with large tech companies such as Airbnb, Pinterest, and Evernote. It is mobile friendly and more focused on candidate experience than your typical enterprise level ATS.
IBM Kenexa BrassRing
BrassRing is an ATS that is part of the Kenexa suite of HR software from IBM. Among its features are multi-jurisdictional help with compliance and the ability to handle high applicant loads.
This enterprise level ATS has won several awards, including one for customer satisfaction. It offers features that help recruiters communicate with candidates, post jobs to social media and encourage employee referrals.
Jazzhr allows users to create custom workflows for each job and has a real-time stream of the latest activities for each candidate. Mashable and RedBull are among its well-known customers.
Jobvite counts LinkedIn, Flipboard, Zendesk and Soundcloud among its customers. Features include automated and configurable hiring workflows and a searchable candidate database.
Silkroad features a career portal that can be customized to include video, blogs, and testimonials, and its ATS comes with its own onboarding system. Customers include Alaska Airlines, Toro and Accenture.
Sap SuccessFactors boasts big customers like Amtrak, Barilla, and Alcatel-Lucent. Great for large-scale hiring and for companies that need very customized solutions. Integrates with an entire suite of HR tools.
Oracle Taleo Cloud Service
Better known as Taleo, it’s a bit more than an ATS, and bills itself as a talent acquisition system. If you need to hire thousands of employees, this is likely what you’ll be using. According to their website, 47 of the Fortune 100 companies use Taleo.
While these applicant tracking systems may work well for enterprise level companies, they’re not ideal for smaller businesses. First off, they’re typically priced for companies with much larger budgets. The minimum fee for some of these services is around $15,000 per year.
If you’re just hiring a couple employees, that’s a deal breaker.
Also, enterprise level recruiting software typically has a more cumbersome job application process. If you’ve ever applied for a job through one of these systems, you’ll know what I’m talking about.
The job application process is usually very long, and often times asks you to provide the same information over and over. Some will ask you to connect your LinkedIn profile, then ask you to upload your resume, then ask you to fill out all the information contained in your profile and resume in a long series of forms.
It can get frustrating!
A few of them also have a reputation for being a bit behind on design standards, especially when it comes to mobile friendliness.
This is not the case for all enterprise ATS software. If your company is large enough to be considering this type of software though, I’d recommend paying at least as much attention to the applicant experience as you do to your experience on the employer side.
Having an application process that's a little complicated is probably fine for big companies that have strong employer branding. People are willing to jump through a few hoops for companies they know and trust.
But for a smaller company that an applicant may be hearing about for the first time when they apply, having a quick and easy application process is essential.
Finally, enterprise ATS software may cause you to miss candidates.
One of the main features enterprise tracking systems offer is the ability to search resumes by keyword.
When you receive thousands of resumes for each position, the ability to search them can be useful. The problem is that you’re relying on software to determine which candidates are the most relevant based on the words they used in their resume.
It seems that the tradeoff for faster resume screening is the possibility of missing good candidates whose resumes didn’t do well in the ATS software’s search function.
If you’ve got thousands of resumes to go through, it’s probably worth missing a few good candidates. But if you’re a small company, a human search of resumes may give you a small upper hand on corporate recruiters.
Important ATS Features
This is a good question to start off with if you’re considering using an applicant tracking system for the first time, or think you want to try switching to a new one. There are several different feature sets available to companies, depending on which provider you go with.
Some of the most common features you’ll see include:
Job Description Assistance
If you don’t have a job description ready to go, a tool to help you put one together quickly that makes sure you have all the important info and that your post is properly formatted will save you time and help you be sure to you’re putting the right thing in front of potential applicants.
Posting Jobs to Multiple Boards
One of the more time consuming and tedious parts of getting your job out there is getting it posted to the right boards. The main problem is that there are thousands of job boards out there.
If you don’t post to enough of them, you might miss the one that your best candidates are searching. But most of us don’t have the time to sit around copying and pasting our job descriptions to hundreds of job boards.
A good applicant tracking system will have a job posting feature that helps you get applicants into the tracking system.
Easy Career Page Setup
Good applicant tracking systems will help you create a career page for your company website that looks professional and requires little to no help from IT or any tech professional to set up. Ideally, the career page is automatically created when you post your first job, and new jobs populate it as soon as they’re created.
Easy Application Process
Whether applicants come from a job ad or your career page, and whatever device they come from, applying for a job on your site should be very simple. The process should take no more clicks or registration form fills than it has to.
Tracking Your Hiring Process
Without this feature, your ATS isn’t an ATS. This should be the core of the software. It should be very easy to see where an applicant is in the hiring process, to find their resume and other relevant information about them, and communicate with them. You should be able to do this from any device.
It’s nice to be able to send an email out to a group of applicants. For some jobs, you may only hire 1 person, but you’ll get 100 applicants. If you want to send them all some screening questions, or a notice that they’ve been declined, it’s a lot easier if you can just write one email that sends to everyone.
This is more typically a feature needed by larger companies, but if you use a key piece of software to handle onboarding, payroll or other essential functions of your business, it’s nice to have an ATS that easily integrates with everything.
This is usually more important for companies doing large scale hiring. If you’re only hiring a handful of people per year, then statistics like time to hire, applicant source and number of applicants per hire won’t really help you much.
In order for data to have statistical significance, you need a lot of it to work with. Chances are, if you’re only hiring a few times per year, you’re storing all the data you need in your head.
But if you’re hiring thousands of people per year, you may want to look into software that has analytics reporting capabilities.
If you get lots of resumes and need to be able to track down a specific applicant, having a system that allows you to search all your resumes by keyword can come in handy. This can also help you go through a large number of resumes if you need to find someone with a very specific skill, although it can leave you prone to missing candidates who didn’t keyword their resume correctly.
At Betterteam we’ve found that a lot of time can be saved by asking applicants a few questions about themselves. Often times people will apply to many jobs, without paying much attention to the qualifications. But if you send them an email asking directly if they possess certain skills, they’ll usually give an honest answer.
We’ve also seen that asking a few in-depth questions about the job they’ll be doing can give a really good idea of a candidate’s level of motivation and expertise. An ATS system can help you with this by automatically sending screening questions to applicants, or making it easy to do so with bulk emailing.
Social Recruiting Capability
This is sometimes considered part of the job posting capability. Many modern applicant tracking systems can automatically post jobs to social media accounts. They can also make it easy for people to share your job posts from their careers page.
Built in Referral Tracking Program
This is often part of more expensive, enterprise-level AT systems. If your company relies heavily on referrals for hiring, and you hire too many people to keep track of referrals on your own, you may want to look into software that helps with referral tracking.
Do you do a lot of work with federal or state government agencies? If so, having an ATS that stores specific data regarding OFCCP and EEOC compliance is nice to have. We provide more information on that in the next section.
If your company does contract work for the federal government, then being in compliance with the Office of Federal Contract Compliance (OFCCP) and EEOC programs will be important for you.
A good ATS can help you with this by standardizing your job description no matter which job board you’re posting on - so that everyone is seeing the same job qualifications.
It can also help you ensure that all applicants go through the same hiring process, and assist you in storing notes about why candidates were not selected, how far they made it in the hiring process, and other information to help you in the case that compliance questions come up.
Some applicant tracking systems will automatically send out standard EEOC questions and report on the answers for you.
Of course, all of these features that help with OFCCP and EEOC can help with state and local compliance in general.
Hiring Better with an ATS
This is probably one of the most important questions to ask. No one just wants a bigger pile of unqualified applicants to go through, they want more of the right ones.
This comes down to many features of the ATS you choose. Does it help you get good exposure for your job posts by getting them on several job boards? Does it post them to the big boards, like Indeed?
Having great job descriptions, attractively formatted job postings, an easy application process and built-in screening capabilities will all help you attract better quality candidates.
One thing I’d suggest is checking out an ATS you’re considering from the point of view of an applicant. See if you can find a job ad that uses their service, and go through the process as an applicant.
Be sure to try it on a few devices. If you find it frustrating, it’s a no-go. Ideally, it’s so intuitive that you barely have to think about the process.
Applicant tracking systems can help you attract talent and keep your hiring process organized, communicate with applicants, screen candidates and stay compliant with federal, state and local laws.
Unless you’re a very small business that does almost no hiring, it’s hard to see why you wouldn’t choose to take advantage of the benefits that a good applicant tracking system offers.
For a fairly small price, you can save yourself a lot of time, improve the quality of employees you hire and make life easier for recruiters, hiring managers, HR and business owners.
If you’re not sure about the expenditure, try adding up the amount of hours you typically spend on hiring without an ATS in place, then compare it to what you spend during a trial period with an ATS.
A good one will save you several hours each week. For most, the saved time combined with the even bigger gains made when you hire better employees should be enough to justify the cost of an applicant tracking system.
We hope this provided you with a comprehensive overview of what applicant tracking systems can provide for your company. Good luck on making your choice!