A few days ago, Software Advice released its annual report on Applicant Tracking Software buyer trends. The report includes data on the most common reasons for purchasing new software, popular deployment methods, and the top requested features.

Software Advice analyzed a selection of 385 small business owners and compared its findings to last year’s data. While the percentage of buyers using manual methods to track applicants has decreased, the numbers are staggering – 61% of participants reported using email and spreadsheets to manage candidates during the application process! This percentage is down just 6% from the reported 67% of buyers who relied on manual methods last year.

From Software Advice’s 2014 ATS Report

Many small companies don’t believe they are large enough to have applicant tracking software in place. Hugo Perriera, an HR consultant at Alpsquare, says he sees a trend of “Very small companies [that] don’t have any software and are just using Excel spreadsheets. When they start growing, they realize they need a solution.” It’s a safe assumption that the companies included in the study have yet to reach the point where they believe they need to purchase an ATS.

This mentality is antiquated and dangerous for three reasons:

1. You’re losing to other companies

Having an applicant tracking system in place helps identify, assess and hire great candidates. At what point does this become important? Day one! Forward-thinking organizations understand this, and prioritize recruitment at all company stages.

A few days after the Software Advice report was released, HireNuture published a relveant article. They took the Wealthfront 100 group, a list of small and mid-sized companies with a rapid growth trajectory, and listed the ATS that each company is using. Of these companies, only 9 companies reported using “email” as an applicant tracking method. The remaining 91 has invested in an ATS. To successfully recruit and hire great talent, and to do it quickly, the overwhelming majority of these companies lean on software to implement efficient and effective hiring practices. Doing so allows them to remain competitive in today’s candidate-driven market.

Note: the list caps revenue at $300 million, while the Software Advice group caps at $100 million, yet we can assume there is significant overlap in company size.

2. You’re subject to bias

Using an Excel spreadsheet to track candidate progress and email chains to collect feedback is one messy system. Not only does it cause recruiters lots of extra stress and time, it nearly guarantees that your interviewers are relying only on emotions and gut feelings to make decisions.

An applicant tracking system should support a structured process with purposeful interviews and meaningful interviewer feedback. This means that you can see exactly what skills or attributes candidates have or lack, rather than relying on emotions to drive these decisions. The smaller the company, the more impactful new hires can be, so you want to be sure you’re making an evidence-based decision. Those don’t come from your gut.

3. You miss out on valuable data

If a company waits until it has hundreds of employees to implement an ATS, it misses out on the opportunity to collect invaluable recruiting and interviewing data/benchmarks. Your ATS should provide analytics that gives recruiters and hiring managers a clear picture of time-to-hire, sourcing quality, and recruiting velocity. Having this information allows companies to make accurate predictions and to improve their processes.

In short, it pays to have an ATS in place from the very beginning! Know what to look for in your Applicant Tracking System by downloading our free Buyer’s Guide, which includes an evaluation worksheet and features checklist: Applicant Tracking System Buyer's Guide

Featured image courtesy of Geico