Disadvantages of Applicant Tracking Systems (ATS)

Posted: April 22, 2020

There is no such thing as a perfect technology. Every system has its drawbacks, and ATS are not immune. While there are many benefits that warrant consideration of an ATS, there are also many good reasons to avoid them.

The #1 Reason: Job-Seekers Don’t Like Them

“In our own client research, we see 75 percent of them using an ATS of some kind, and of those, 94 percent say it improves their hiring process. That’s a 180-degree difference from what candidates see — they tell us the hiring process is frustrating, fraught with bugs and glitches, they have to manually enter information in duplicate, and then — poof! They’re never sure if it even is reviewed by a human.”

-J.P. Medved, a recruiting software specialist with Capterra

Research by CIO Magazine makes a pretty clear case in their article Why Your ATS May Be Killing Your Recruiting Efforts. The candidate experience can be extremely frustrating, and there is an entire cottage industry of companies and professionals that promise to help candidates “game” applicant tracking systems. There’s a sense among candidates that ATS systems help companies at their expense, and they never get a real chance unless they game the system.

In addition, the application experience can be clunky. Candidates are often asked to register for an account, upload their resume and cover letter, but also to fill out exhaustive questionnaires that are asking for the very same information that is included on their resume.

After jumping through these hoops, they wonder if their materials will ever even see the light of day. If you’re trying to bridge a talent gap, the obvious result here is that picky and in-demand employees may not even bother.

The Full Cost of an ATS Can Be Eye-Popping

Most providers in the marketplace aren’t transparent with their pricing. Many require you to request a quote, which kicks off an extended sales conversation about your organization, and then pricing details. The whole process tends to feel more like a car buying experience where you are not really sure whether you got a good deal or got taken, than buying a piece of software.

SHRM, however, conducted quite a lot of research and was able to get more clarity on pricing for the most popular ATS providers. Of course, the base cost for providers can range anywhere between $0 annually to more than $50,000 annually (depending on provider, features, implementation costs, etc.). Most providers fall between $5k to $10k annually, with some providers geared towards smaller organizations offering lower-cost solutions, and others charging from $10k to $25k. Then, you have to factor in one-time implementation fees, which can be thousands of dollars on their own.

But: the annual price tag isn’t the only cost to consider. Here are some other costs that most ATS providers aren’t going to be forthcoming about:

• Implementation time and costs. These systems are not turnkey. A 2017 study by HR technology consultancy Aptitude Research discovered that less than half of ATS implementations are delivered on time, and only 32% are delivered on (or under) budget. The reality is that 78% of ATS buyers will experience delays or extra costs with their implementation.
• Integrating with other systems. Many modern systems are built around third-party integrations with many of the tools (employee databases, payroll, background check providers, learning management systems, document management) that your company relies on. Integrating with each of these systems is time-consuming and resource- intensive. You need to plan to have your development team set aside a big portion of their time to this project.
• Adoption & change management. Your recruiters likely already have an established workflow. Even if they complain about it, they are comfortable with it. Getting employees to change—especially to use new software—can be challenging. In fact, entire consultancies are built around change management. Recruiters can be incredibly hesitant to embrace a new ATS if they don’t understand why the change was made or how it benefits them. If organizations don’t address this resistance early and consistently, it can lead to a delayed implementation, or worse: abandoning your new ATS altogether.

Mixed Results on “Unearthing” the Best Candidates from the Pool

Applicant tracking systems use optical character recognition (OCR) to “read” documents like resumes and cover letters. These systems often fail, without you being notified. And when they do work, they look for cookie-cutter resumes that most closely match the wording of your job description. Therefore recent college graduates, borderline candidates, career-switchers, and even people that just didn’t practice good resume SEO will be at a disadvantage.

Sure, the system saves you time from having to review all the resumes yourself, and it will unearth a batch of resumes from the pile that it believes are good fits. But it will leave many extremely qualified candidates behind, and the loss of those candidates may very well offset the positive impact of this function of an ATS. After all, many companies greatly benefit from hiring candidates from outside the industry, or outside the field, as these employees bring different perspectives and skill sets. An ATS just can’t make the types of decisions to bring in a candidate like that for an interview.

For more information on Applicant Tracking Systems: The Good, the Bad, and the Unnecessary, please contact Info Cubic at 877.360.4636.