Companies May Not Get Their Moneys Worth From ATS Products

By Gina Ruiz

Oct. 10, 2006

Companies spend millions of dollars annually on sophisticated applicant tracking systems. However, they may not be getting their money’s worth when it comes to receiving accurate, in-depth information to help make sound recruitment decisions, says Don Firth, president and CEO of

He points to unsettling findings in a simulation test recently conducted by the niche retail job board. The purpose of the study was to gauge the effectiveness of drop-down boxes, which are commonly used in ATS reports to provide metrics on the source of hire. Candidates encounter drop-down boxes during the online application process, when they are asked to respond to questions like “Where did you hear about this job?” The box gives them a list of sources from which to answer.

There were 60,000 participants in the test, all job applicants who were requested to identify where they had learned about the position, using the menu from the drop-down box. The entire universe of the candidates should have indicated, since they applied directly from the site, according to Firth.

However, five out of six candidates cited alternative sources other than—essentially an inaccuracy rate of 83 percent. Almost half of the respondents in the study did not provide any indication of where they had been tipped off about the job opening.

And some 34 percent of participants in the study chose “another source” from the drop-down list. The responses were misleading, as they could have meant any number of hire sources like Monster or popular search engines such as Yahoo and Google.

Firth says the high error rate could stem from a variety of reasons, including candidates’ forgetting where they heard about a job initially or getting overwhelmed by the extensive lists that often appear in the drop-down boxes. There’s also the lethargic factor. An applicant might think it is easier to indicate “other” rather than to rack their brain seeking the correct answer.

“The candidates don’t care about the accuracy of ATS reports,” Firth says. “All they want to do is get through the drop box as fast as possible so that they can start the actual application process.”

Although Firth knew ATS reports were inaccurate when it came to pinpointing where the candidates came from, he admits being surprised at the magnitude of inaccuracy.

One potential solution would be for ATS vendors to adopt use of automated tracking tags, since this technology would be able to identify more accurately the original source of hire. But even these devices are not foolproof, he says. If the automated tracking tags don’t provide enough depth to go back to the initial point of contact with a candidate, a company could still be receiving inaccurate information.

Given the large sample size tested in the study, the problem could be more serious than initially thought, Firth says. He suggests that companies take a careful look at the quality of the information they receive in the ATS reports.

“Having clear and precise information is crucial for recruiters because it helps them assess which tools are most effective at filling in open posts,” he says.

The genesis of the study stemmed from concerns that a couple of recruiting clients had raised about the number of résumés they were receiving from After more careful analysis, one of the recruiters discovered the niche job board had actually forwarded 25,000 retail candidates. Meanwhile, the other recruiter discovered that more than 20 percent of all of its hires had originated with Both clients realize there had been flaws in the ATS information they had been receiving, Firth says.

Improvements in the short term are unlikely because ATS vendors will have to make significant investments to upgrade their platforms. What’s more, many companies are unaware that the problem exists and will not put the pressure on ATS vendors to make the enhancements, Firth explains.

“There is little incentive for the ATSes to make a change,” Firth says. “Particularly if their clients aren’t pushing for it.”

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