Since Applicant Tracking Systems first made it big (around ’88 or so) there has been a cottage industry that has devoted itself to two ideas: ATS products are unique in the ire they create in their user base, and ATS vendors are to blame for this.
When you been around the industry as long as I have you know neither of these things is true. Yes, there are people who don’t like their ATS, and yes, vendors own part of the blame for this. But this is really a systemic issue. There are many interconnected parts to this issue, each acting in its own best interest, and each sub-optimizing the overall solution opportunity. The good news is nobody is to blame. The bad news (and the underlying reason for the continually frustrating size of the ATS market) is that nobody has the ability to fix it.
When I try to explain this to people I usually end up with blank stares and requests for “one more round of drinks.” So I thought I would go out on a limb here and try to explain the situation as a parable, or story with a lesson. At the end of the parable is a “moral of the story” with a distillation of its points.
The Shopkeeper, the Gunslinger and the Inefficiency Kid
He had moved in gradually, like a spider crawling into a dark room. Although he was a big man with a terrible odor, nobody in the town of Change General Store
Day after day the Inefficiency Kid took up the whole front porch, ate the store’s food and generally made a mess of things. The shopkeeper couldn’t get the right goods into the store: the Inefficiency Kid just took up too much damn room. The General Store couldn’t get enough customers in to make the business work. Eventually the town’s people just stopped coming, figuring out other ways to get meet their growing needs.
One day the mayor of the town of Change
The shopkeeper was a decent, hardworking person. Her diligence and ingenuity and the hard work of her family had enabled the town grow. Fast. And she was rightfully proud of her accomplishments. Her name was Emma. Emma Ploy. But the folks just called her Em.
Em was not given to violence, so she approached the Kid and asked politely, “I’m really no good at this sort of thing mister. I know how to get the goods in and get the townsfolk buyin’, but I ain’t never had to get rid of a problem the likes of you. How about you just move along now so I can get back to doin’ what I do best?”
The Kid lazily threw a sideways sneer and belched. Then he went back to eating.
Em knew this was serious. She had to do something. So she decided to get help. Real help. Experts. She called in three cowboys from out of town. Good lookin’ fellers with fancy chaps and expensive horses.
Em showed them the Kid and described her problem. The first cowboy smiled and said “Why ma’am, we all agree. You have to get a hired gun. A gun slinger. And you have to get ‘em fast.”
Em was relieved. Finally, answers. Action. So Em asked the next logical question: “Who? Who should I get? How do I pick ‘em?”
The three cowboys recommended that Em buy them drinks. Over those drinks (drink after drink after drink) they slowly and surely painted a picture. It wasn’t clear. It didn’t help. But it took a long time to get out and caused Em to ask lots of questions. And for every question, there was one more drink.
The first cowboy said “The most important thing about a gun slinger is the kind of gun he shoots. Gotta have pearled handles.”
The second cowboy agreed whole heartedly, nodding like a Beagle following the turkey leg in Pa’s hand during a heated Thanksgiving conversation. He said “And also the kind of spurs he wears. Gotta be gold plated.”
The third cowboy was pretty drunk. He barely managed to gurgle something about “How he looks in a hat” before he went face down into the bar.
Em felt like asking the cowboys, “That’s all good, but what does that have to do with getting rid of the Kid?” But she knew that would just cost more drinks, and this was getting a little expensive for her budget. So she thanked them and sent them on their way.
The next day Em made an appointment with the mayor. Em started the conversation by saying “Now C.E., I asked the three best cowboys I could find what the heck I should do about the Inefficiency Kid and they said I should hire a gun slinger. What do you think?”
“Great!” bellowed C.E., slapping Em on the back. “Make it happen.”
“Well C.E., that’s the thing,” Em continued. “Its gonna take money to hire ‘em and I ain’t got none. You dole out all the money for that kind of thing.”
C.E. shot Em a sideways glance and mumbled under his breath things like “cost center” and “bottom line.” But eventually he said, “Well alright Em. How much do you need?”
“I don’t rightly know. I ain’t no expert in this kind of thing. I know how to move goods in and out and make sure they are the right goods and that people have stuff to buy and buy the stuff they want. So I’d have to guess. But I would say $10.” She waited.
It came. “$10? $10? Are you kiddin’ me? That’s real money Em! I got a limited pot of gold here and lots to do with it. There are more important things to do than get that big, fat slob off of your porch. I gotta build a system to get the cattle to market and I gotta pay the cowboys to get that system in place. And things like that. What are you thinking!?”
Em was crushed. But she plowed ahead. This had to get solved. “Well that’s all good and fine C.E., but what good is any of that gonna do if you don’t have a way to feed the cowboys and the cattle, if you can’t even get blankets? All the goods come out of the General Store. Dammit C.E. this is important!”
C.E. glowered, and then a fine, slick smile started to work its way across his face, like a rattlesnake making its way over a pile of sand. “Oh now Em. I know its important. Its not like I want to bring in one of the big general stores from the city to run the place. We just gotta make due with what we got. I know you can do it. You just take this fifty-cent piece and go take care of that bucket a’ lard and come back here and you can buy me a drink. Go on now!”
Em couldn’t believe her ears. Where was she going to find a honest to goodness gun slinger for half a buck? She didn’t know much about the guns-for-hire business, but she knew that wasn’t a lot of money to do anything at all.
The next morning she sent a courier into the big city. Within a couple of days a “gun slinger representative” showed up. People called him “the rep.” He liked that. He sat down with Em and started his talk:
“Emma Ploy, I know what you need. Four big guys with guns. Big guns. This is a tough job. I have seen the fella on the front porch and that is a whole lot of problem to get rid of. The price is right too. $100 and your problem is gone.”
Em almost swallowed her chewing tobacco whole. “$100? $100? I don’t have that kind of money. The mayor just gave me twenty-five cents and that’s all I got!” Em felt bad about lying, but she really didn’t have a lot, and she thought she could look like a hero to the mayor for saving even more money.
The rep looked at her with bemusement. “Twenty-five cents huh? Well, that won’t buy a lot. But I’d really like to do business with you.” The rep thought it through. This shopkeeper could turn into a long-term customer. She was likely to have problems like the Kid all the time. If the rep could get on Em’s good side there would probably be a lot more business where this came from. The rep didn’t think about the fact that if this shopkeeper didn’t make this problem go away, it was the shopkeeper, and not the problem, which would be new next time around.
The rep smiled and said, “Tell you what I am going to do. Have I got a deal for you. If you can raise your price to fifty cents then I’ll get my best man on it.” Em reluctantly agreed.
Days and days went by. Nobody showed. Em was starting to get mad. The Kid wasn’t going away… in fact, he was just getting bigger and eating more and more. And the smell! It was enough to rot the produce before it even got into the shelves. Em’s nerves were frazzled by the time the gunslinger showed up. A.T. Shot was his name. He was clean shaven and confident, but a little young. He said “Don’t you worry a hair on your head little lady. I know just how to solve your problem. I learned it in school.”
Em couldn’t believe a greenhorn right out of school was going to take on five hundred pounds of menacing threat sitting on her front porch. But Em was ready for some action. She called to her family and told them to come on down. She called the other townsfolk. She even got the mayor to show up. The Inefficiency Kid was finally going to meet his maker!
A.T. took out his gun and pointed it at the Kid. A hush fell over the crowd. You could have heard a pin drop. A.T. looked at the Kid with narrow eyes and said, his voice only cracking once or twice “Ah, excuse me sir. I hate to trouble you. Really I do. But could you please leave? Please?”
Please leave? Trouble you? What the heck was this? Em was furious! She went to A.T. and smashed him over the head with a frying pan she had been carrying into the store to sell. Now, A.T. was a bit of a jumpy type to begin with. He had been hit before by customers. In fact he was used to it. But each time it happened it shocked him. The force of the frying-pan blow caused him to involuntarily squeeze his trigger finger.
BAM!
The report of the gun startled the entire crowd. Everyone either jumped or hit the dirt. The bullet missed the fat target of the Kid by a mile. It hit a metal plate near the door of the shop, ricocheted off to a pail near the floor, and ended up in A.T.’s foot. “Darnit!” A.T. screamed. “This always happens!”
Em collected her senses. The Inefficiency Kid was sitting there snoring. And her gun fighter was jumping around, holding his foot and screaming (in between darnits) that he should have taken that job in supply-chain software he had been offered. “This just ain’t worth it!” A.T. was yelling to no one in particular.
Em couldn’t believe her ears. “Not worth it?” she hollered. “Not worth it? Didn’t I pay a good fifty cents for you? And so far all I have gotten is a good lookin’ kid with a hole in his foot. Get the job done or I’ll take my money back and get someone else who can do the job.”
A.T., in between howls of pain, was indignant. “Listen lady. The rep told me this was an easy job. I would have told him in a heart beat that ton of goo you got sitting on your porch ain’t gonna move with just a kiss. This is gonna take a whole bunch of my associates to make it work. And it’s gonna cost you a whole hell of a lot more than fifty cents. Hell, half that went to the rep anyway, and my bullets and the stitches cost more than the cash left over. I’m gonna need MORE money to do this job right!”
Em couldn’t have cared less about what A.T.’s problems were. She had the whole town lookin’ on. Hell, she even had the mayor. This was gonna turn out right or Em was going to show everybody who was boss. So she went over to A.T., took a gun out of her pocket (a little Derringer, but scary all the same), held it to the gun slinger’s head and said in a low voice, “Either you kill the Kid, or I kill you.”
Well, if A.T. had been nervous before, he almost wet himself at the thought of getting shot in the head by a shopkeeper with a peashooter. He raised his gleaming pearl-handled revolver, pointed it at the Kid, and closed his eyes. He hoped for the best. A.T. thought, “If only hopes were money, I would be the richest feller in town.”
The second bullet came out of the muzzle like a… well, bullet. It missed the Kid by a couple of yards and started bouncing off every metal object around. It hit horseshoes and wagon wheels and pails and plates and even a bell over the bar of the saloon. It hit everything but the Kid. And just as A.T. thought he was out of the woods and safe from his own bullet, it kneecapped him.
A.T. went down screaming like a baby who has lost his favorite blanket. The noise was unbearable. Em had had enough. The Kid, the waiting, the eating, the bullets… the whole thing was enough to make a decent shopkeeper go crazy. She went over to A.T. and kicked him and yelled, “Give me back my money and get the hell out here!”
And that was the end of A.T. Shot. Another gunslinger would have to be found.
But the Inefficiency Kid was still there. And the town had to grow. And the mayor still expected “results.”
Over time the Inefficiency Kid’s posse showed up. The Dastardly Duke of Ineffectiveness. The Sour Sourcer. The Clammy Closer. And each time the mayor had something better to do with his money, and each time Em just wished she could get the whole group of ‘em to go away.
One day the mayor called Em over to his office. He looked purposefully gloomy.
“Em, I’m sorry to have to tell you this, but the city is going to revoke your license. We’ve asked the big city market to come in and take over.”
Em was completely dumbfounded. She hadn’t brought these problems to the store, to the town. She had asked for the right tools to get rid the job done, even if she really didn’t understand exactly how to solve it. And now she was being kicked out. The unfairness of it all was too much to bear.
Em slowly rose and moved to the door. She thought of all the good things she had done, her family had done. Raising the town from when it was a barn and a saloon to thriving township it was today. The feeding and the care. The delivery day in and day out.
As she reveled in these memories a thought struck her. She turned on her heel and stared at C.E. Officious.
“How much?” Em asked.
“What?”
“How much for the big city, out of town store to come in? How much?”
A smile spread across C.E.’s face. He seemed genuinely pleased. “It turns out we are practically going to make money on this deal. Its just $200 up front but if we keep ‘em around for five years I make $100 profit. And the best thing is that they are going to hire the whole Inefficiency Kid Gang as clerks!”
The Moral Of the Story
· Staffing (Talent) leadership is very good at doing its job: getting people in place inside a company. But they are faced with problems that are outside the realm of the standard staffing expert skill set.
· So they call in consultants. Consultants don’t get paid for solving problems. They get paid for making clients feel better. Why? Because implementing real solutions requires risk and pain. And nobody ever got rich telling the client that they were wrong and that the way to fix their problem was to risk their job.
· Making the client feel better takes time and money. Employment departments don’t have a lot of either, because executive management sees the function as a tactical cost center as opposed to a strategic revenue opportunity.
· So the CEO / CIO nickels and dimes the solution budget, which leaves everyone in a bad position: the employment department doesn’t know exactly what it needs but understands it doesn’t have enough to do it, the consultants know that the “art of the possible” is mission impossible given the budget, and the solutions (ATS) vendor can’t deliver and support what it will take to really fix the issue.
· So the first thing that gets cut is the process reengineering needed to clean up the recruiting process (which, due to political infighting, mergers and acquisitions and lack of systems insight is usually a complete mess).
· This means that ATS vendors are faced with the following reality:
o Whatever recruiting process is around will be embedded into the ATS system as a one-off customization which IT doesn’t want to support and which future recruiting leadership will want to get rid of.
o The selection process won’t be based on the ability to partner with the customer to solve a long-term, systems-level issue, but will instead be based on a “feature-function” bake-off that will focus on functionality that won’t matter to 80% of the users.
o Because cost and demos are the primary selection criteria the employment department is increasingly likely to turn it over to purchasing. This tells the ATS vendor that the problem being fixed isn’t that important because purchasing departments manage cost and risk, not effectiveness.
o The selected vendor will have to try to maintain some account profitability by reducing cost of support labor (usually by putting their services staff on too many accounts to take care of the historically high-maintenance nature of the recruiting account) or by putting inexperienced people on the account.
· The customer ends up quite upset, which typically leads to blaming the vendor. Thus the customer ends up either shooting the vendor immediately (less likely) or waiting a couple of years until new employment leadership has cycled in, using that as the excuse to replace the vendor.
· In the mean time the vendor is caught off-guard because the reports they get from their customer are generally good. They fail to take into account that employment people get paid for creating and delivering good news and therefore aren’t generally good at communicating bad news early or forcefully. (And vendors always have happy ears anyway because they have to communicate to their management and investors that things are good or else they get fired.)
· And then, once the vendor is gone and all the problems that created the need for a vendor in the first place still exist, then the CEO gets upset because all they hear about are problems and costs, so they decide the smart thing to do is to outsource the employment function.
In the end the ultimate irony is that most outsourcing contracts require a higher level of cost and commitment (in return, hopefully, for efficiency and cost gains downstream) than was needed to really solve the issue in the first place. Nobody wins, everybody is unhappy, and the ATS market continues to stagnate as most vendors cannot develop the types of long-term partnerships needed to build a base suitable for growing the market opportunity.
Jeff,
I can now understand why your ROI on this piece is negative. It has just taken a lot of effort from your side. But nonetheless, I think you should have felt happy at infusing the touch of fable and creativity. Which is wondefully done.
As for why ATS systems are half-baked or for that matter why most ERP implementations don't give the ROI that was expected of them (when agents sold them to clients)? is that there is minimal or no process re-engineering. They just take the current processes and map them onto the tecnological solution - with all their inherent inefficiencies built in. Whether it is for HR/Sales/SupplyChain. Which is why Talk of paperless world sounds like a fantasy to me.
Being in the implementation space, I can vouch that we can't tell the bad news to the clients that easily and so we go ahead and implement the wonder bullet solution for them which leads to process efficiency but not the change they wanted.
And yes, the money part is also right, if you throw peanuts you'll only get monkeys.
Posted by: Manish | February 20, 2006 at 11:35 PM