Understanding the nuances of applicant tracking systems (ATS) and candidate relationship management (CRM) systems is crucial for your organization to remain competitive and strategic in talent acquisition.
In essence, an ATS focuses on automating and optimizing the hiring process from start to finish, while a CRM system is engineered to nurture relationships with potential talent — even before they apply.
This article will explain ATS and CRM software's distinct functionalities, prime differences, and overlapping spheres. By the end, you'll have a clearer perspective on which tool aligns best with your needs, or whether an integration of both could be the key to your recruitment success.
What’s an ATS?
An ATS is designed to automate and optimize the application process from job advertising and candidate sourcing to new hire onboarding.
According to recent ATS statistics, an ATS's automation and efficiency can reduce the time to fill a position by up to 60%. Time is of the essence, especially for businesses in high-volume industries like retailers or staffing and recruitment agencies. Every day a position remains vacant could equate to lost revenue and productivity.
Let's delve deeper into what this recruitment tool has to offer.
How an ATS is Used in Recruitment?
Job Posting Automation
Imagine being able to distribute your job listings across multiple boards and platforms with a single click. That's precisely what an ATS offers. Instead of manually posting on various job boards, websites, and social media platforms like LinkedIn, your ATS integrates with multiple job boards to distribute the listings so that you reach a broader audience without the added digital legwork.
Some advanced ATSs can customize job postings according to the platform to improve their chances of reaching the best candidates. They also track applicants’ sources so you know where to spend your recruitment marketing budget less and more.
Resume Parsing
Going through hundreds, if not thousands, of resumes, can be a time suck. Realistically, a manual review process makes it very difficult to give each application due consideration, which means you’re probably missing out on great talent.
With an ATS, you can automatically extract key information from resumes, organize it effectively, and quickly assess a candidate's fit. When ATS-friendly resumes are uploaded or emailed, the ATS uses algorithms to extract vital information such as contact details, education, skills, and work experience, converting it into a structured format.
Top-notch resume parsing tools can also rank active candidates based on qualifications, tech stack, or keywords, making it easier to identify potential fits for a position.
Interview Scheduling
Instead of back-and-forth emails, the ATS minimizes back-and-forth communication and ensures a better candidate experience via its self-scheduling feature, which allows candidates to choose from the hiring manager’s available slots.
An additional but no less important component of this function is integration with video interview software, which provides seamless virtual interview experiences. Automated reminders can also be set up to reduce no-shows.
Candidate Assessment
By assessing active candidates before interviews, businesses can ensure they're spending time only on those who meet their criteria, leading to higher-quality hires.
Many ATSs offer integrated pre-employment assessment tools, personality tests, and cultural fit questionnaires. These can be sent automatically to jobseekers, with results integrated into their profile. Depending on the ATS, it may offer a library of tests or integrate with third-party assessment providers. Results can be benchmarked against desired scores to help in shortlisting.
McKinsey research emphasizes that, with 20-30% of work time set to be transformed by automation technologies by 2031, the landscape of recruitment will also evolve. The skills and tools required to remain a competitive employer in the future will shift dramatically.
In the same sense, the skills required in the jobs you hire for will also evolve rapidly. An ATS can help your business stay ahead by quickly identifying candidate profiles with these future-oriented skills and ensuring that your organization remains prepared for these inevitable requirements to remain ahead.
Reporting & Analytics
ATSs collect vast amounts of data throughout the hiring process. Through dashboards, they present these as visual insights and foster data-driven recruitment. Key recruiting metrics include time-to-hire, cost-per-hire, source effectiveness, and candidate drop-off rates. Some enterprise vendors can even offer predictive analytics and suggestions for better hiring efficiency.
What is a Recruiting CRM System?
While an ATS is designed to handle the application and recruitment processes, a CRM system is engineered to nurture relationships with potential talent — even before they apply.
A recruitment CRM focuses on nurturing candidate relationships, understanding candidate preferences, and leveraging recruitment process automation with a human touch to ensure a more favorable perception of your employer brand in the talent market.
How a CRM is Used in Recruitment
Talent Pooling
CRM systems allow companies to build and maintain a talent pool of potential candidates. These could be individuals who have expressed interest in your company but haven't applied, previous applicants, or even passive candidates.
Candidate Engagement
Given that companies with a candidate-centric automation approach are twice as likely to enhance the candidate experience, recruitment CRM with communication automation can ensure that every potential candidate is engaged consistently and in a timely manner.
Trust Building & Data Management
A potential candidate wants to understand how their data will be utilized. A capable CRM helps you maintain transparency on how data is used and stored.
Multi-Channel Communication
A robust CRM supports multiple communication channels, enhancing the candidate experience. 73% of companies still state that email is the primary form of communication.
Since email is such a direct channel, and generic or overly templatized content is so easy to spot, these statistics stress the importance of personalizing the candidate experience. A personal touch ensures each individual feels valued.
Email may also not be your candidate’s preferred touchpoint. To make the recruitment process most engaging, employers need to meet talent where they’re at.
ATS and CRM: What Do They Have in Common?
Both belong to recruiting software categories, ATS and CRM share some overlaps in candidate data storage, communication channels, reporting and analytics, and integrations.
Candidate Data Storage
Both ATS and CRM systems store candidate data, be it contact details, resumes, or interaction history.
While an ATS might store details about a candidate's application status and interview notes, a CRM could house information about their interests, previous interactions, or feedback from past virtual career fair events. Integrated together, they offer a holistic view of each candidate.
Communication Channels
Both systems allow for communication with job seekers, albeit with different intentions. While an ATS might be used for transactional communications, like interview schedules, recruitment CRM software can be employed for more relational communications, such as newsletters or event invitations. When used in tandem, they ensure candidates receive timely and relevant communications.
Reporting & Analytics
Both ATS and CRM platforms often have built-in analytics tools that allow you to gauge the effectiveness of your recruitment strategies. An ATS might give insights into the efficiency of the hiring process, while a CRM can provide data on engagement levels and the effectiveness of outreach campaigns.
Integration Capabilities
Both recruitment CRM and ATS can integrate with several HR systems to ensure a more efficient flow of candidate data synchronization.
ATS and CRM: What are The Key Differences?
Both of the recruitment software systems discussed here are invaluable in modern talent acquisition, but they are distinct in their focuses, user interaction timing, data entry point, communication style, and lifecycle stage.
- Software focus: An ATS's main focus is on streamlining the logistics of hiring—collecting resumes, screening applicants, and tracking their progress through the hiring funnel. On the other hand, a recruitment CRM is centered on building and nurturing talent pipelines so that when a new role arises, you can source candidates much faster.
- User interaction timing: Your interaction with a candidate in an ATS usually begins when they submit an application for an open position. But with a CRM, your interaction can start much earlier, typically when a potential candidate visits a virtual job fair, subscribes to a company newsletter, or engages with your company on social media.
- Data entry point: Data within an ATS predominantly comes from job applications, while the data in a CRM can be sourced from various touch points—networking events, referrals, talent communities, and previous applicants who weren't selected but are worth re-engaging.
- Communication style: Communication via ATS is often transactional. You'll send interview invites, offer letters, or feedback emails. On the other hand, a CRM fosters ongoing communication. This can range from sending company updates to sharing relevant content or even wishing a potential candidate a happy birthday.
- Lifecycle stage: An ATS handles the latter stages of recruitment, from application to hire, whereas a recruiting CRM plays a role in the earlier stages, focusing on attraction, engagement, and nurturing potential candidates.
Do You Need an ATS, a CRM, or Both?
As explained above, while there's some overlap, an ATS system and CRM cater to different stages of the talent acquisition process.
If you're solely looking to streamline your hiring process for current job openings, an ATS might suffice. But if you're aiming for a broader, more proactive recruitment approach, focusing on employer brand building, long-term talent engagement, and cultivating a top talent pipeline for future roles, then a CRM becomes invaluable.
Ideally, for a comprehensive recruitment strategy, integrating both tools or investing in a recruitment technology that combines these functions can offer you the best of both worlds and, ultimately, help you hire the best talent.
Recognizing the increasing demand for comprehensive talent acquisition tools, several software providers have stepped up, offering integrated solutions that combine the functionalities of both ATS and CRM systems. These all-in-one platforms provide a seamless ability to track candidates and manage talent relationships for recruiting teams. Opting for such integrated platforms can be a wise investment.
