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Workday's ATS Is the 'Top Choice' of the Fortune 500

Experts assert that market share does not equate to user choice, satisfaction

A group of people sitting around a table looking at a laptop.

​Workday Recruiting is the most used applicant tracking system (ATS) by Fortune 500 companies, according to a recently released market share breakdown. But what's good for huge corporations might not necessarily be beneficial for smaller employers, industry experts said.

The San Francisco Bay Area financial management and HR technology firm narrowly surpassed Oracle's Taleo system, the longtime leader in ATS market share. 

Job description software provider Ongig identified the ATSs of 476 of the nation's largest U.S. companies after studying their careers sites. The systems of 24 companies were not identified.

Of the employers with identified systems, 22.6 percent use Workday, while 22.4 percent use Taleo. Oracle's share of Fortune 500 users rises to 24 percent when the vendor's other ATS software is included (Oracle HRMS, iRecruitment and Oracle Cloud).

But HR technology analysts are quick to point out that just because big companies use enterprise-level software like Workday Recruiting or Taleo doesn't mean that HR and talent acquisition (TA) leaders chose those systems or are satisfied with them. For instance, many multinational organizations have no choice but to use one of the few global-optimized systems with the horsepower to handle mega-high-volume hiring.    

"It is not accurate for readers to think that this report is indicative of the best ATSs out there, because Fortune 500 companies have different needs and resources than smaller companies," said Madeline Laurano, an industry analyst and founder of Aptitude Research, a Boston-based HR technology research and advisory firm. "The report should include more context around what's important to Fortune 500 companies and why these particular providers top the list."

The ideal talent acquisition technology stack (including an ATS) will be different for every organization, said Tim Sackett, SHRM-SCP, president of IT and engineering staffing firm HRU Technical Resources in Lansing, Mich., and SHRM-published author. "A company with 100,000 employees needs the muscle of an enterprise system like Workday or Taleo. If I'm running talent acquisition for Walmart, I can't take a chance on one of the next-gen systems [cloud-based, best-of-breed providers like iCIMS, Jobvite, SmartRecruiters and Greenhouse] that isn't used to that kind of volume. That's too big a risk. The big companies know the next-gens provide better tech, but they can't use those systems because they're not built for that size."

Three of the main takeaways and trends from the report are the increasing growth of Workday's HR technology; the slow erosion of Taleo's share of the market; and the pros and cons of using recruiting systems built in to HR technology suites versus the popular standalone systems, which remain the experts' choice. 

[SHRM members-only platform: SHRM Connect]

The Rise of Workday …

The prevalent line among TA technology analysts is that Workday Recruiting's market share growth is primarily due to HR's lack of choice in its own technology. The same can be said of the other enterprise-level products at the top of the list: Taleo and SAP's SuccessFactors.

"The CFO buys Workday and then hands the recruiting module off to recruiters," said William Tincup, HR technology expert and the president of media company RecruitingDaily. "The recruiters are not involved at all in the discussion."

Sackett agreed, adding that "no one is buying Workday because of its recruiting product. Workday is chosen by the business because its financial software is one of the best out there. Even Workday's HR and payroll tech is solid. But when you get into the talent products, it starts to degrade."

Tincup said he's surveyed many of the TA leaders who use Workday Recruiting. They say it's impossible to use without workarounds. "It's true that these companies have Workday's ATS, but none of them use it without additional components to make it work," he said. "This is also true of Taleo and SuccessFactors. Recruiters will buy additional products like Oleeo, Jive or Phenom People, and even extra ATSs like SmartRecruiters or Greenhouse for workflow, and push the data down to Workday's ATS so it can be used for reporting. The data then carries further into Workday's onboarding, payroll and other core HR systems."   

Experts believe that for the most part, the enterprise-level ATS modules of core HR technology suites have the same basic flaws.

"TA leaders will have to build an ecosystem around the ATS to make it work the way the C-suite thinks it's going to work out of the box, but the vendor doesn't sell it that way," Sackett said.

… And Fall of Taleo

In an anecdotal sign of shifting market share, Workday is quickly becoming the most complained about ATS on the market at TA conferences, taking ground from Taleo, which for many years had that dubious distinction, according to industry observers.

Companies may be moving away from Taleo, "but not in the huge numbers that their competitors would like to see," Laurano said. "A lot of Fortune 500 companies I work with have no plans to leave Taleo but are instead investing heavily in the TA tech ecosystem to be able to support it."

Taleo market share may be shrinking, but Tincup said Oracle's cloud-based ATS is "gorgeous."

The workflow is beautiful, he said—"it has adopted the features of the next-gen systems. It will be a major upgrade for everybody because it has all the major API integrations with the ecosystem of vendors."

Enterprise vs. Next-Gen Systems

Recruiting technology analysts believe that there are much better performing ATSs—for most companies—on the market than Workday Recruiting and Taleo. The next-gen systems are much easier to use, more flexible to integrate and offer marketplaces full of TA component products to buy. Support and service is generally better, and contract duration is usually shorter, too. But larger organizations have overriding business imperatives.

"The biggest differentiator in the ATS market is that only a few providers can truly support a global enterprise company," Laurano said. "Very few ATSs have the multilanguage capabilities; the configuration capabilities; and the staffing, security and infrastructure in place to support a complex, global organization."

Tincup added that the next-gen systems are not global ATSs. However, at least a couple of those providers (Greenhouse and SmartRecruiters) are quietly building global-use capabilities.

"[The next-gens] may have global clients, but workflow is conducted in English," he said.

Sackett said big companies are more interested in an integrated suite of products for their technology. "My enterprise HR and TA friends will tell me that the enterprise suite is a necessary evil they can't get away from," he said. "I continue to argue there is no real reason to have your employee data and candidate data in the same database. Any basic business intelligence tool can pull the data you need from either one of these systems and combine those two datasets."

Some believe that the leading next-gen systems will start to scale up and take a real bite out of enterprise market share. Holmdel, N.J.-based iCIMS is already in the top five, according to the Ongig report. Laurano said that she can see providers such as iCIMS, Jobvite, SmartRecruiters and Avature gaining more enterprise clients, and they have already done a good job supporting the ones they have.

Tincup added that two forces will continue to push the next-gen systems upward. First, they will need to keep pace with their customers, who are getting bigger through hiring. Second, Google's new ATS is "eating up the bottom end of the market. For these systems focused on smaller companies, Google will soon own that business. If not them, then LinkedIn or ZipRecruiter. The bottom end of the market is going away."


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