How to choose a CRM for your new recruitment agency

What recruitment CRM should you spend your start up capital on?

If you’re looking to set up a recruitment business, you will need a recruitment CRM, database, or ATS, whichever term you know it as. You’ll probably have used more than one in the past; I find a lot of recruiters have. The recruiters I speak to about their choice of recruitment database at start-up stage have usually hated most they’ve used or have one they want to use just because it’s the one they’re familiar with.

However, as the modern-day recruitment CRM has advanced so much over recent years and is continually evolving, new recruitment databases are entering the market all the time, so my advice is don’t just go with the one you know. Moving to another CRM is a nightmare so choose carefully and think ahead, your business growth will lean heavily on how much value you get from it.

Recruitment databases can get bad press, so some people will just use LinkedIn and will have never used a database because their experience with past CRMs was so awful. For this reason, I’ve written this guide to what a recruitment database is, what types are available, how much they cost, and which one might be the best.

Plus, I’ll also look at why it’s a good idea to invest in some form of recruitment database (be it a recruitment CRM or ATS – we’ll discuss the difference later in this blog) right from the outset and how you can go about selecting one that fits your needs.

What is a recruitment CRM?

What do we mean when we talk about a recruitment database? Apologies if this seems a dumb question but they do vary a lot, plus if you only really use LinkedIn, this bit may be enlightening. Most recruitment database software comes with two primary modules – a client and a candidate side.

Often just called by the all-encompassing term, recruitment CRM system (Customer Relationship Management) a recruitment CRM allows you to easily track client and candidate contact details, CVs and past interactions in one single place.

A recruitment CRM will also typically come with some kind of reporting function to help you keep on top of your new recruitment business’ KPIs and SLAs (service level agreements). Being able to access real-time reporting across all your roles can help you keep on top of any leads, make more informed decisions as a new recruitment business owner and spot any potential red flags.

This reporting will only be as good as the data you feed into your recruitment CRM, so keeping it up to date and utilising it from the start is crucial. So, for this reason, don’t get too wowed with loads of whistles and bells you won’t use. Think, will I want to use this system, and more importantly will the people who work for me want to?

What is the difference between a recruitment CRM and an ATS?

Another term you will have encountered if you have spent any time in recruitment, is a recruitment ATS (which stands for Applicant Tracking System). Often used interchangeably with the term recruitment CRM, an ATS focuses much more on the candidate aspect of the recruitment process.

While many Applicant Tracking Systems also have a CRM element at the back-end, the main purpose of an ATS is to make the management and flow of jobs and candidates as easy as possible. An ATS will often have a customisable workflow, allowing you to move candidates through the recruitment process, easily tracking activity at each stage. A good ATS will also allow you to add automation and add-ons, such as video interviewing, online testing and AI filtering.

The easiest way to think about the difference is that your recruitment CRM is the database that stores your client details and interactions while an ATS is where the candidate details are kept.

Because I’ve been in the recruitment industry for 27 years, I still refer to a recruitment CRM or ATS as a database, but times have moved on and it seems the common terms are now CRM or ATS. A recruitment ATS is an Applicant Tracking System. Often used interchangeably with the term recruitment CRM, an ATS focuses much more on the candidate aspect of the recruitment process.

While many Applicant Tracking Systems also have a CRM element at the back end, the main purpose of an ATS is to make the management and flow of jobs and candidates as easy as possible. An ATS will often have a customisable workflow, allowing you to move candidates through the recruitment process, easily tracking activity at each stage. A good ATS will also allow you to add automation and add-ons, such as video interviewing, online testing and AI filtering.

The easiest way to think about the difference is that your recruitment CRM is the database that stores your client details and interactions while an ATS is where the candidate details are kept. However, that said, you do need one that does both, regardless of whether it’s badged CRM or ATS, and pretty much all do, but vary on their emphasis between the two.

Do I need a recruitment CRM?

The short answer is, if you want to bill more and grow a high profit recruitment business, then absolutely! If you are currently using or have used a recruitment CRM you may have found it less than helpful or even useless because it’s hard to use – you can’t get to your info fast enough, it’s time-consuming adding to it and as no one uses it properly, you can’t find anything.

A recruitment database should be user-friendly, where information can easily be accessed in seconds when talking to clients and candidates, and have plenty of time-saving features, so it’s quick and easy to use and the most important bit, IT MEANS YOUR STAFF WILL USE IT! A database is only as good as the info you put into it, so it’s critical you keep your data clean from the start and ensure any new staff do the same.

In my blog on the most common mistakes new recruitment businesses make, I talk about the importance of having the right recruitment CRM software in place from the beginning and actually using it!

We’ve all worked in those recruitment roles where the company prides itself on having a recruitment CRM with hundreds of clients in it, or an ATS with tens of thousands of candidates. In reality, however, finding any useful information amongst thousands of out-of-date and irrelevant records makes it really hard work for a busy recruiter, which is often the reason some recruiters just don’t use them.

Make sure you are clear about how data is added and the recruitment software’s use right from the beginning to ensure your team (and even yourself) are keeping it up to date. This is where you need to ensure using the system well is part of the business culture, the better it’s used – the more wins the team get from using it, the more wins – the more it gets used properly.

This then turns into a very positive snowball on how using the database properly makes the recruiter more money. A key part of this is agreeing to add on the right attributes and skills to tag your candidates with from the start. If this just evolves, it’ll be messy and you’ll get a lot of duplication, so please put some time into listing the correct and necessary skills and attributes from the start, and do not give universal access to add to this list.

I have seen first-hand how if any of your recruiters can add to this list it can spiral out of control with several terms that mean the same thing, unnecessary sub-attributes and duplicated terms. Before you know it, searching becomes less and less efficient, it takes too long to scroll down to the right tag, so people stop using it.

If your plan is to build your new recruitment business to sell, having an up-to-date, relevant database of clients and candidates will make your company a much more valuable prospect to potential buyers. So, getting the right recruitment CRM / ATS in place and, most importantly, setting parameters to use it well is critical. I explain this in my blog on 8 ways to increase the value of your recruitment business.

How much does a recruitment CRM cost?

The answer to how much a recruitment system for your new recruitment business will cost is like any product, it depends on which recruitment CRM you go with and whether you want the top of the line one with all the whistles and bells. I try never to duck a question so per licence, per month, you could expect to pay anywhere between £20-£150, but £60-£90 seems the most common for a decent one.

Cost control is important in your recruitment start-up, but the CRM is so key to your business’s future, try not to let price influence you. Choosing the right one has to be your number one criterion. Some companies will also charge an implementation fee or charge you for training.

If your new recruitment business is just you, or you and another recruiter/resourcer, you may not feel you need to invest in an all-singing, all-dancing, enterprise-level piece of recruitment software like Taleo or Bond Adapt, where the costs can really run up. But, on the other hand, moving data from a database to a new one is a huge job, so do think ahead and get one fit for the business you want to be, not the one you start out as.

There are smaller systems with a range of costs, depending on what you need. If you just want a basic client, job, and candidate database to store details in, then there are monthly options that range from free, like the basic plans for Zoho Recruit and SmartRecruiters, to a small fixed monthly fee. But, not wanting to keep repeating myself, a good CRM saves you time, helps matching and makes you more money, so don’t go cheap unless you are absolutely convinced, despite it being cheap, it’s still the one for you.

If you want something a bit more full featured, for example, you might want to be able to push new jobs out to job boards, create custom workflows, or integrate your recruitment software with your website and your emails, then it will cost you a bit more each month. Even if you don’t use some of those features now, it does future-proof your system (and also your business) for when you staff up.

Most recruitment CRM and ATS software are priced per user, per month. Sometimes if you are purchasing a bulk of user licences, you can get a discount on the price – but, as a start-up recruitment business, you will most likely pay the standard charge.

However, the modern-day recruitment CRM company is starting to wise up to the fact that from little acorns big oak trees grow. So, they are far more likely to give the one-person band a good price than the job boards that charge a fortune for the small start-up customer! CRM businesses know how moving databases is such a huge pain, so if they get you from the start, the chances are you’ll be a client for life.

Moving your data from one CRM to another is also very costly – such a data migration will usually cost thousands. It’s a bit like banks offering free banking – how often do you move banks, and that’s a hell of a lot easier than moving to a new database.

Also, when thinking about costs, make sure that you are aware of all associated costs of purchasing recruitment software. For example, with some recruitment CRM systems like Bullhorn, the quoted monthly costs only include the licensing fee for each user.

If you want their help on deployment, training and dedicated support, then this will come at an extra cost. Some other recruitment CRM providers include these deployment and training costs for free – but be sure you are aware of any hidden costs before signing that contract.

What is the best recruitment CRM?

When you start looking at options for a recruitment CRM or ATS, if you do thorough research, you can find the choice mind-boggling. But if I can give you 2 tips, decide on the key features you want, then choose a system that has those and is easy to use, so both you and your future staff will actually use it.

I would also look into other things like the costs of extras and do some research on how good their support is. Some CRMs like RDB and Bullhorn have awful reviews for awful after-sales support and service, whereas companies like JobAdder have amazing support – they even proactively reach out with new features they feel will help your business specifically.

In my experience, the typical recruitment start-up founder goes one of two ways when choosing which CRM or ATS to commit to; they either go with the recruitment software they have used before or do their research and take the opportunity to view a number of CRM and ATS systems demos.

This gives them the opportunity to work out what features are out there, choose the features they will get the most value from (and importantly actually use) and make a business decision on which one will be the future of their business. Needless to say, the latter is the smartest one!

As doing the research is the best way to go – it means you will end up with a system you are comfortable with using, but without paying for lots of unnecessary features you will never use. Here are some common features which many recruitment CRM / ATS systems offer that you may want to consider:

Custom workflows
Job board Integration
Resume parser
Lead tracking
Client portal (to allow them to upload their own jobs and review candidates)
Social media integration
Candidate screening
Video interviewing
Mobile recruitment (making the application process easier for candidates)
Automation & integration (Zapier, email, integration with your accounting software)
Tagging / advanced search
Connectivity with LinkedIn
Sync with Outlook

Many of Davidson Gray’s partner agencies use JobAdder, but we always let the business owner choose whatever they feel suits them and their business best.

There are other great recruitment CRM and ATS providers out there, with packages geared towards the smaller recruitment start-up, like Beamery, TalentLyft, Recruit CRM or iSmart Recruit.

The best recruitment CRM is the one that meets your individual needs

I can’t tell you which recruitment database you should choose for your new start-up recruitment business, but I can stress the importance of having one, researching the best one for you and using it to its full potential right from the outset.

Before you start looking at potential recruitment CRM systems, Applicant Tracking Systems and other recruitment software, make sure you take a step back and think about what features you need; what features you want; and how much of your start-up budget you can afford to spend. This will help you not only choose the right recruitment software provider for you but ensure you aren’t spending money on unnecessary features that you just won’t use.

At Davidson Gray, we work closely with our new recruitment start-ups to guide them through this process and advise them on the best recruitment software solutions to help them meet their business goals. It is of course the business owner’s choice which recruitment CRM we provide for them, but I do always stress that they shouldn’t just automatically go for the one they know.

This decision can have a huge impact on your company’s growth and scalability, so take your time and make the right choice for your business.

Rhys Jones

Written by Rhys Jones Managing Director – Davidson Gray