In the marketing world, they're known as customer relationship management (CRM) platforms. In HR, they're referred to in other ways—for example, candidate relationship management or employee relationship management (ERM) platforms—and often integrated with an applicant tracking system (ATS), but the concept is the same. They're platforms that leverage technology to connect with an audience—in this case potential employees—in ways that drive talent acquisition and retention.
The Evolution of the ATS and Emergence of CRM
The traditional purpose of an ATS is evolving to do far more than simply track applicants.
"If you think about the evolution of software technology for functional purposes, recruiting software technology kind of lags behind sales and marketing technology, so the tools and applications for marketing and sales technology eventually find their way to recruiting technology," said Dave Berk, co-founder of Beacon Talent, a recruitment firm in New York City that uses expertise from disciplines like sales and marketing to help companies attract, engage and retain the right people.
"There are some really interesting parallels where recruiting is a very similar workflow process to a lot of sales and marketing efforts," he said.
After all, the concept is the same: You're trying to find people with certain characteristics to take some action—in this case, applying for a job.
Today's more-advanced technologies can track employees across their entire life cycle: from application through hire, performance review, promotion, etc. It's a repository that can help HR organizations find and stay in closer connection with applicants, especially top candidates who didn't get hired, and readily identify employees who may represent high-potential talent ready to be trained for, or moved into, more-advanced roles.
"The recruitment experience allows candidates to get a sense of what the organization's culture is like," said Eileen Lee, vice president of people and culture at PERKS, a benefit platform based in Los Angeles. "With this in mind, a recruitment management system manages the entire recruiting process while building and maintaining relationships with job candidates. It organizes your relationships and engagement with them and keeps communication streamlined. In short, it treats your candidates like how you would treat clients by optimizing the best experience for your candidates."
How HR Organizations Use CRMs
Ideally, each employee would have an individual profile in the ERM system, which would include personal data (e.g., contact information, birth date, etc.), as well as qualifications and even performance data.
The gathering of that data could—and, in many cases, should—start before the employee is hired. Just as with CRMs, ERMs can be used to collect, track and nurture prospects (e.g., potential job applicants).
FORUM Credit Union, headquartered in Fishers, Ind., has automated many of its HR processes, but has leveraged technology most for recruitment, said Anne Wiseman, vice president of human resources. Wiseman said that FORUM's ATS has "a lot of bells and whistles." It uses the system to aid in recruiting and to ensure prompt and ongoing connections and updates throughout the process. FORUM's system also has functionality to reach out to people who have expressed an interest in similar types of positions in much the same way that people will start seeing online advertisements for products they've done Google searches for.
Analytics is another benefit of automating the recruitment process and using technology to track candidates from interest through onboarding, and beyond. Wiseman said FORUM's system provides the company with the opportunity to "filter down through data that you didn't have before." It provides insights that can be used in making decisions.
Wiseman stressed, though, that having an ATS and automating parts of the recruitment process doesn't mean that human connections aren't important. The real goal, she said, is to free up staff so they have more time to personally interact with candidates.
Igor Efremov, head of recruitment at Itransition, a Denver-based software development company, said that "ERM is one of the most powerful tools for those enterprise managers who opt to build strong relationships with their teams." To maximize effectiveness, though, the tool needs to be consistently used.
"Everyone involved in the recruitment process needs to be aware of and utilize the same CRM/ERM," Lee said. "That way, you can ensure that all of the information regarding your candidates lives in one place and is accessible during all stages of the pipeline." That's important to get maximum value from the system and the data it's gathering.
Berk pointed out that the system used to track employees from recruitment and beyond may not actually be a single system. That's true as well in marketing and sales organizations. "I would say, on average, most marketing organizations are probably using seven to 10 software systems. Most recruiting organizations are probably using at least three to five."
These might include an ATS feeding into a human resource information system and potentially other "spokes" around it, Berk said—like payroll and benefits. It's important to make sure that all of the spokes and systems are, ultimately, coming together so there can be a single access point to the information being gathered.
Ultimately, Berk said, it's important for HR leaders to make sure they're "selecting the right systems, make sure the systems are talking to each other and ensuring that you have the ability to actually evaluate and report on the effectiveness of that work."
Selecting the Right System
It may seem obvious, Lee said, but companies need to do their research when selecting a system. The technology is evolving rapidly—so are employers' needs, especially in an increasingly hybrid work environment.
Efremov agreed. "While some enterprises successfully use a generic CRM solution as an ERM or purchase ready-made ERM systems on the software market, other organizations may require more complex functionality, which can only be accessed via the development of a custom ERM," he said. "In any case, I'd recommend consulting with experts before choosing a specific approach to ERM; they can analyze your particular business case and suggest the most appropriate ERM deployment options."
In addition, Berk stressed, it's critical to make sure the ERM can communicate with and pull or share data from other systems being used.
"If you're new to using either a CRM or ERM, it's helpful to schedule a demo with the provider(s) so you can get a feel for the system and any functionalities that you would benefit from," Lee said. That's really the best way to get a good sense of what the system can do as well as an understanding of what the user experience will be.
Lin Grensing-Pophal, SHRM-SCP, is a Wisconsin-based business journalist with HR consulting experience.