Intense ATS Market Competition Spurs Product Improvements for Employers

By Roy Maurer Apr 24, 2017
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CHICAGO—Employers are the beneficiaries of continued growth in the applicant tracking system (ATS) marketplace, where competition has pushed vendors to improve reporting and integration with job boards.

"The No. 1 challenge facing ATS companies today is the number of competitors now in the marketplace, and this increase in competition may be the cause for greater emphasis now being placed on meeting customer demands," said John Bell, president and CEO of reThinkData, a technology firm based in Hunt Valley, Md., that sets up data integrations between ATSs and recruitment sites.

"They are in a competitive fight," Bell said. "And this was before Google's announcement [that it is creating a job listings site], and an ATS coming from Indeed. Vendors are focusing on technology advances to gain a competitive edge, which can make the candidate apply process better and smoother with less friction."

[SHRM members-only HR Q&A: Applicant Tracking: Should all employers collect demographic data on applicants and employees? If so, when?]

Speaking April 22 at the TAtech Spring Industry Congress, Bell unveiled survey findings from the 2017 TAtech—reThinkData Applicant Tracking System survey of 60 ATS vendors:

  • Over 50 percent of employers are using ATSs, which represents 70 percent to 80 percent of job ads. Many small businesses still use internal application processes through e-mail, Bell said, but the ATS market is growing and smaller companies are starting to implement them.
  • ATS providers are very bullish about 2017, with 93 percent saying that they were optimistic about the year ahead. The percentage of respondents saying they were very optimistic almost doubled from 31 percent in last year's survey to 60 percent this year.
  • 2016 was a very good year for ATS providers: 87 percent of the respondents said their company had performed better in 2016 than in 2015, while 44 percent said their business had been significantly better than the year before.
  • Adding new products and services is the top priority for ATSs in 2017, cited by 87 percent of respondents, an increase of 30 percent over 2016. That may signify a shift driven in part by the increased competition in the marketplace.
  • Improved reporting and analytics is the most important product development being driven by customer demand. "This is being pushed by pay-for-performance job advertising models," Bell said. "Employers are trying to figure out how to make their buying decisions, so they are trying to get better analytics."
  • Data integration is the most important product development being driven by internal need. "Many of the top 25 ATS providers still do not have APIs [application program interfaces] that job boards can use to exchange applicant data," Bell said. Last year, only 35 percent of ATSs polled had APIs—which allow different software programs to communicate—available for integrations. When ATSs do open up APIs with job boards to access data, they are charging fees for the use of those modules.
  • ATS integration with third-party HR technology vendors continues, but implementation has been slow. "If you look at the vendors that ATSs have integrated with, they are mostly posthire tools such as assessments and screening tools. Very little has been done on the candidate sourcing side," Bell said.
  • Talent acquisition professionals are gaining ground in purchasing decisions. Fifty percent reported that their principal point of contact was a manager or executive in talent acquisition, indicating that TA professionals are taking more of a primary role in recruitment technology purchasing.

"That figure remained mostly unchanged from 2016 when it was 48 percent, suggesting that as talent acquisition technology becomes more critical to organizational success, decision-making about its purchase is being driven by talent acquisition professionals in the enterprise, rather than by those higher up the chain of command in the HR department," Bell said.

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