What To Consider When Implementing HR Technology

3 caveats to follow when considering an ATS

An applicant tracking system (ATS) is a software that manages recruiting and hiring process, including job postings and job applications. It organizes information about job seekers and makes it searchable. An ATS is also used to cull applicants and recommend the most qualified candidates. The goal is to speed HR's review of job applications and resumes.
 

But the implementation of an ATS comes with many challenges. A  recent Wall Street Journal article exposed frailties with ATSs in their article titled, “Companies Need More Workers. Why Do They Reject Millions of Résumés?” The WSJ article brought to light how companies have been misled in acquiring ATS systems and sometimes mistakenly mismanaged the use of the HR technology in an effort to improve their hiring process. The relatively new entry of ATSs (they have mostly been around since the late ‘90s) may not be the answer.

A company’s chief human resources officer (CHRO) is under immense pressure to solve the enterprise’s “talent” supply chain issue, with a lack of qualified personnel as the root cause for under-achieving operational and financial performance metrics.  This is a global problem that has spared no industry.  

Here are three caveats to follow when considering an ATS:

1. Analyze Vendor Rhetoric

You do not want to be that CHRO that believes everything the vendor is offering, and later realize that you placed too much trust in your vendor’s sales team. A Deloitte study found that many organizations were not happy with their HR cloud-based systems with a user satisfaction rating of 3.5 out of 5. Only 26% of respondents reported effectively using technology and analytics, and only 6% believed their HR technology was excellent.  

Many organizations still have a mixed set of HR systems in place. Only 5% of survey respondents have a fully integrated HR cloud platform. Most of the others have some combination of cloud and on-premise software, and 29% have no systems at all. 

Customers often do not have a holistic view of their HR supply chain and realize too late that they overlooked doing the hard work to address their operating model, align the data architecture, and improve user experiences. This is leading to technology implementations that are not delivering their full potential. 

The CHRO leadership should analyze HCM and ATS vendors with the same scrutiny as if they were hiring for any CXO leadership position. Hiring the wrong senior leader incapable of doing their job or integrating into the company is an expensive and harmful situation. Bad financial outcomes will result from bad technology selections and failed system implementations, and often result in negative consequences for enterprise stakeholders. 

2. Evaluate Risk

Before you sign an ATS or any software or implementation agreement, consider the risk you are about to inherit. Software never comes with the promise that what was demonstrated will work in your environment – results will vary by customer. What is your recourse with the ATS vendor if the promises do not come true?

Your risk grows almost exponentially with each condition below that is true in your scenario: 
 

1. Your company has no prior commercial experience with your favored ATS vendor
2. Your ATS company is not the same company providing your larger current HCM solution  
3. Your ATS vendor is not integrating the ATS into your HR system’s environment, and has no ownership in its outcomes 
4. Your ATS implementation team may or may not work for the ATS vendor 
5. The vendor implementing the larger HCM system is not the vendor implementing the ATS.

Even though you are looking for a win, include in your decision that you must accept and own these risks and resulting consequences if any of the above five scenarios are true and end up resulting in bad outcomes. Keep in mind that you will also own the consequences if an ATS project failure causes a larger HR program failure.

In order to lower your risk, begin with your contract and the statement of work (SOW) fundamentals.

You will need a strong SOW regardless of the size of your ATS implementation. Aside from the 5 points for risk to accept with this ATS program, there are 5 risk mitigation points where you will need solid answers (hint – there are many more).
 

1. Clearly defined scope. Does your scope clearly state your expectations, including whether you are expecting an ATS for volume hiring (e.g., the same role x 100s)?  Have you considered integration with enterprise systems and social media job boards? Countries, languages, etc.? Do not miss these important scope details because you think the ATS project is small and limited.
2. No project plan – No project. If no one representing the client has reviewed the implementation plan, then consider from your perspective that no plan exists. Does the plan represent only the ATS implementation? Has consideration been included for the larger HR program, or other dependencies? 
3. ATSs do not implement themselves. Has the implementation vendor provided a detailed plan of roles and participation levels for the client and all vendors, including the ATS and program system integrator? 
4. Who is responsible for delivering the ATS? Does an RACI table exist for the ATS implementation or is the ATS implementation embedded in a larger program RACI?  Does the RACI clearly indicate the RACI index for the client, ATS integrator, ATS software vendor, program integrator, and other possible third parties?  
5. Payment terms and conditions. How will the vendor get paid? How will you collect value in exchange for payment? What is their risk of forfeiture? What is your exit scenario?

3. Plan Your Life-Cycle Involvement

Even though ATS job postings often contain words like “self-starter” and “high energy,” do not let the vendors mislead you. An ATS is not a “self-starter” and will require “high energy” during implementation and after deployment. 

Workflow design, data, and integrations are foundational. Your cost-to-hire and time-to-hire metrics reflect your current workflow. Because your metrics may not be good, it does not make sense to modify (adapt) your ATS to reflect your current hiring workflow.  

Consider how you will adopt the workflow within the ATS, or whether you will try to adapt the ATS to your current workflow. You are more likely to improve your hiring process metrics, reduce software run cost, and quickly use future ATS vendor enhancements, if you choose to adopt your requisition-to-hire to ATS workflow processes.  

There is no true transformation unless your metrics improve as a result of your program. “Adopt vs. Adapt: Which Approach is Best for Your Business,” offers a simple view of the adopt vs. the adapt approach.

Data is underappreciated and often overlooked work. Clients usually carry the burden of work in this area, but should put the responsibility on the vendor to lead with data requirements of data types and expected volumes – including history, strategy for cleaning and conversions, and the planning that is required to make the ATS work as advertised.

The vendor and the client’s understanding of data types, data flows, and data synchronization with the ATS and the integrated HR systems is of critical importance. Do not overlook the importance of knowing how and where data conversions may need to happen. Also, do not underestimate the amount of work or the required attention to details pertaining to the data workstream after deployment or your ATS program will stall and eventually transition into a “performance improvement program.”

Failure to integrate your ATS into your larger environment will worsen your hiring and applicant processing at best but could trigger a larger failure in your larger HR program.  

Has the vendor demonstrated how their third-party ATS will integrate with your current/future platform? Has the vendor demonstrated how their product will or will not support your presence on various job boards?   Do you have a list of known failures and challenges with integrating the ATS?   

You can reduce your risk profile in these and other foundational areas by contacting valuable resources in your networks, reference accounts, and by including your IT resources in the due diligence process.  

Move Forward with Caution

The early lessons learned on ATS and HCM systems are not necessarily new, as we know the same stories have existed in ERP systems for decades. HR leaders can validate these lessons by talking to the ERP warriors within your company’s supply chain, manufacturing, and customer service, and of course, your CIO. Ask them what they have learned about implementation challenges, and post-deployment support costs of your company’s ERP systems.  You should hear useful information that can be applied to data maintenance, process ownership and refinement, and standardization.

When considering an ATS as well as any technical solution, remember:

1) Acknowledge there are known and unknown risk factors in technology programs and that some solutions carry specific risks
2) Educate yourself on potential solutions and vendors
3) Create a solid SOW
4) Focus on key foundational areas, like workflows and data and integrations 
5) Understand what is required to maximize the utilization of the ATS. 

Ted Rogers is UpperEdge’s Project Execution Advisory Services Practice Leader. Prior to joining UpperEdge, Ted was the Vice President of IT for Flynn Restaurant Group and was previously at The Timken Company, a global F500 manufacturer.  While at Timken, Ted developed and led the global enterprise systems and architecture teams in the U.S., Europe and Asia.  Visit https://upperedge.com/  Connect Theodore (Ted) Rogers