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If you ask any CEO which people-related issue keeps them up at night, the answer will likely be turnover. Present trends aside, turnover has always been one of the most expensive challenges facing any business. In 2019 (pre-pandemic and pre-Great Resignation), a Gallup study called it a “fixable problem” that “will cost U.S. businesses $1 trillion.” Employees are always going to be the most important asset a business has, but effective retention strategies often feel slightly out of reach. Ultimately, most retention strategies are filled with feel-good ideas that fizzle when measured against success data.
There are no perfect solutions to fix employee turnover. And if you believe some researchers, like those over at Emsi, demographic changes are leading to what may become a long-term worker shortage. What’s a company to do when faced with challenges like these? One suggestion: Using an Applicant Tracking System (ATS) to improve role alignment among candidates.
What is an Applicant Tracking System?
Applicant Tracking Systems, generally referred to as ATS, are automated software systems that track and manage candidates through the entirety of the hiring process. Many ATS alleviate some of the manual work needed to filter qualified candidates:
When applicants apply for a role, they’re simultaneously uploading information into the system (resume, cover letter, educational background, experiences, etc.).
The system, which has preset criteria, looks for role-specific keywords in the application.
Based on the keywords, the ATS scores the incoming applications on how closely they match the criteria.
Some CEOs might cringe at the idea of implementing yet another tech tool. Especially if you’re at a small or mid-sized company, you may feel like your tech toolkit is starting to become unwieldy. Nevertheless, when weighed against the cost of hiring the wrong people, an ATS is worth exploring.
The technical aspects of an ATS functionality, which we covered above, are critical to how an ATS can help you source top hires. There are three distinct benefits to ATS we can zero in on that may completely change the game for your approach to hiring.
Related: How to Hire Employees Using an Applicant Tracking System
1. ATS reduces bias in the selection process
Bias is a sticky issue for companies. On the one hand, hiring someone who will fit into the culture of your company is generally important. But companies have consistently gotten “culture fit” wrong. As Lauren Rivera, Professor of Management & Organizations at Kellogg School of Management at Northwestern University explained, culture-fit hiring far too often involves hiring managers to pick candidates based on their own personal interests, background and connections with the applicant. This leads to a perpetuation of “sameness” in the organization and is a subtle, yet insidious, form of discrimination.
Conversely, ATS systems utilize a non-human approach to identify the top candidates for each position. These top hires are filtered on how closely they align with the job criteria you’ve created. This allows candidates to make it through the candidate selection process without the risk of getting rejected due to hiring manager biases — at least prior to the interview stage.
At some point, you will have to interview potential candidates. Once top potential hires are in the interview phase, the risk of bias, whether conscious or unconscious, will rear its ugly head. There are strategies you can take to reduce bias even further at this point, including using structured interviewing, which requires hiring managers to use the same set of questions (and follow-up questions) for each interview. However, using an ATS will minimize the impact and make it easier to implement anti-bias standards in the interview process.
2. Top candidates know how these systems work — and will prioritize your keywords
Top candidates are “top candidates” for a reason. They come with the skills and traits that are most desirable for your company. And quite likely, they come with either prior work experience or are creative self-starters who know how to self-activate to get the job done. Consequently, that means your top candidates are also going to be savvy and have done their research. They’ll know what you’re looking for and will align their job application, resume and cover letter to align as closely as possible with what you’ve written in your job description.
That’s, of course, a double-edged sword. It could mean you’ll have candidates rising to the top of your ATS scores who’ve done a bit of embellishment on their applications. That’s not a problem if you’re properly vetting the top candidates by researching their work histories, contacting references and holding multiple rounds of interviews.
Additionally, you may want to utilize a skills test of some kind. Skills tests are a great way to ensure that the top candidates working their way through the system actually have the skills to back up what they’ve put on their resumes. Even better, they’re a regularly-cited strategy for reducing bias in the hiring process.
Related: Best Way to Hire Employees: 3 Tips for Landing Top Talent
3. ATS frees up hiring managers’ time, allowing them to spend more time vetting best-fit candidates
Ask any hiring manager or HR professional in charge of hiring, and they’ll tell you that filtering through candidates is one of the most time-consuming activities they engage in. Recruitment alone can require long hours sifting through applications and profiles, hoping to find the perfect candidate. It’s why the average time-to-hire can be as long as 49 days, depending on your industry. If your company doesn’t have the most efficient process to filter the best candidates to the top, you may end up losing those candidates to other companies where your top choices have also applied.
ATS will dramatically reduce how much time your hiring managers spend going through applications. This speeds up the hiring process, reduces the time-to-hire for open positions and gets you to top candidates much faster (and ideally, before they get an offer from a competitor).
So, you should consider ATS a must-have hiring tool. ATS is just one of many tools available to create a more efficient hiring process. Efficiency is important for finding the best talent in a tight job market like the one we have today. Implementation is usually simple, and given ATS can help support many other business strategies, including DEI, it’s a tool every company should consider utilizing.
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