The State of Applicant Tracking Systems 2020

1. The State of Applicant Tracking Systems 2020 SEPTEMBER 2020 Sponsored by: www.hr.com | 877-472-6648

2. CONTENTS 3 Executive Summary 7 How Has the Recruitment Function Been Coping in an Uncertain Era? 10 How Effective Is Talent Acquisition Today? 12 How Prevalent Are Applicant Tracking Systems? 16 What Are the Benefits of Using an ATS? 19 What Do ATS Do Well and Not So Well? 27 What Is the Candidate Experience Like? In What Ways Do High-Performing and Lower-Performing TA Organizations Differ? 30 38 What Are the Most Exciting Major Innovations of Today and Tomorrow? 41 Key Takeaways 2 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

3. Executive Summary About this Survey The survey, called “State of Applicant Tracking Systems 2020,” ran in September and October of 2020. There were usable responses from 285 HR and recruitment professionals. The study was conducted by HR.com through its HR Research Institute. What a difference a year makes. In September 2019, the U.S. unemployment rate stood at 3.7%, a mark that some economists deem “full employment.” A year later, the U.S. September unemployment rate was 7.9%. This means, of course, that the circumstances surrounding last year’s survey on applicant tracking systems (ATS) were dramatically different from this year’s. In light of the global pandemic and accompanying global recession, some recruitment professionals have been forced to adopt modified recruitment approaches. These modifications often result in changes in the way ATS are leveraged as well. The participants are HR professionals representing a broad cross-section of employers by number of employees, ranging from small businesses with under 50 employees to enterprises with 20,000 or more employees. HR.com’s HR Research Institute surveyed the human resources (HR) community during the autumn of 2020 to learn the details of those changes. We’ve summarized the key findings below. 1 ● A substantial majority of HR professionals (73%) say their organizations use an ATS. Thirty-five percent use at least one stand-alone solution and 44% use a recruitment module that is part of a larger human capital management system. Some organizations have both stand-alone solutions and modules that are part of larger systems. Most organizations have an ATS and more are considering one. Key Finding ● Large organizations (those with more than 1,000 employees) are most likely to have an ATS, with 88% reporting they have at least one. What’s more, large organizations are about as likely to use a point solution (49%) as a system that is part of a larger HR technology platform (47%). ● A majority (56%) of those without an ATS are either planning to acquire one or considering it. 3 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

4. 2 The data suggests that firms that use an ATS have advantages in the area of talent acquisition. Key Finding ● More than half (54%) of HR professionals say that talent acquisition in their organizations is good or excellent. ● Those organizations that say they’re good at talent acquisition (i.e., high- performing TA organizations) use an ATS at a higher than average rate: 81%. In contrast, only 65% of those with lower-performing TA functions use an ATS. ● A majority of respondents describe their ATS as being essential for adding/exporting candidate information (66%) and sending/organizing messages to candidates (59%). Nearly half say essential capabilities include scheduling/calendaring (49%) and providing access on mobile devices (48%). ● Managing the volume of applications is the most widely cited benefit of using an ATS (71%) and reducing time-to-hire is the second most widely cited benefit (60%). 3 Despite the utility of ATS, many HR professionals still say that, for now, their systems suffer from a number of weaknesses. Key Finding ● Just 46% of respondents say their ATS is good or very good at automatically matching candidates to the right job postings and only 47% say they are good or very good at gathering and integrating employee referrals. What they are best at, of course, is tracking candidates as they move through the recruitment process (81%). ● Integration with other technology systems remains a challenge in some areas. Although there is fairly widespread integration with HRIS/HRMS, assessments and E-verify, there is considerably less integration with reference checking, candidate satisfaction data, and video interviewing platforms. ● Only a minority of participants agree that their ATS enables them to locate internal talent (41%) or helps identify candidates who are passively looking for jobs (40%). ● When asked to identify what they like least about their ATS, the most common response is that their system does not have enough of the features users need (40%), followed by the complaint that their system does not have good reporting/analytics functionality. ● More than two-fifths (44%) say their ATS offers no way of gauging job candidate experiences. Among those with systems that can gauge such experience, 53% describe that experience as good or excellent. 4 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

5. 4 In terms of their ATS usage, organizations with high- performing TA functions are overall more satisfied with their ATS than lower-performing firms. Key Finding ● High-performing TA organizations get higher levels of performance from their ATS across the board. One example is that 77% of high-performing TA firms say their ATS is good at customizing the application process, compared to just 34% of lower-performing TA firms. Another is that high-performing TA organizations say their ATS offers candidates a high-quality experience at a much higher rate than their lower-performing counterparts do—77% to just 36%. ● Why do high-performing TA firms provide a better overall candidate experience? One key factor may be that they are more likely to gauge the candidate experience. Among those that do measure employee experience as well as candidate satisfaction data, high-performing TA firms are considerably more likely to use candidate surveys and obtain written feedback from candidates. ● On a more basic level, only 51% of lower-performing TA organizations say their ATS is easy to use whereas 86% of high-performing TA firms say the same. 5 Participants are excited about some recent developments and are expecting advancements over the next three to five years. Key Finding ● When responding to a question about which recent improvements and innovations are most exciting, participants were most likely to select: text messaging capability to improve candidate engagement integration with a new hire onboarding process improved capability to ‘autofill’ applications from candidates’ resumes and online social profiles integration with online social media sites ● When responding to a question about the most beneficial ATS enhancements over the next three to five years, respondents were most likely to select: greater personalization improved assessment and filtering tools ability to anonymize applicants and/or candidates to reduce the potential for hiring bias 5 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

6. 6 Most organizations have been adapting their technology systems and recruitment processes to circumstances associated with the Covid-19 pandemic: Key Finding ● Seventy-eight percent say they have taken talent acquisition actions in response to the pandemic. Among these organizations: 89% have adopted some form of video conferencing platform with 60% saying they have begun doing more interviews virtually 56% have adopted some electronic signature application 24% have implemented new technologies to handle remote hiring issues 6 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

7. How Has the Recruitment Function Been Coping in an Uncertain Era? Finding: Most employers began doing more remote interviews in response to the pandemic In early 2020, the Covid-19 pandemic struck the world. Within a matter of weeks, many business operations were disrupted as nations adopted social distancing strategies in an effort to slow the spread of the virus. Not only did this drive many businesses to adopt remote work arrangements as never before, but it also changed talent acquisition practices in many organizations. Economic slowdowns accompanied the pandemic, which contributed to less recruitment activity in some organizations. But even among employers where recruitment efforts did not slow (or, indeed, ramped up as in certain essential service industries such as healthcare), organizations often adopted remote hiring strategies to maintain social distancing. In fact, “began doing more interviews virtually” is the clear strategy when we asked survey participants, “Which of the following talent acquisition actions has your organization taken as a result of the global pandemic and related events?” Although this is the most widely selected action, it is by no means the only one. Less than a quarter of respondents (22%) say that they have taken no talent acquisition actions in response to the pandemic. Aside from conducting more virtual interviews, the next three most commonly cited actions have been: ● implemented new technologies to handle remote hiring issues ● changed recruitment messaging ● adopted modified assessment processes 7 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

8. Survey Question: Which of the following talent acquisition actions has your organization taken as a result of the global pandemic and related events? (select all that apply) Began doing more interviews virtually 60% Implemented new technologies to handle remote hiring issues 24% Changed recruitment messaging 22% Adopted modified assessment processes 20% Adjusted talent pooling strategy 18% Began hiring more remote, non-local candidates 14% Made adjustments to cope with more applications 14% Reconfigured applicant tracking systems (ATS) in some way 11% Started accepting more applications from non-local applicants 10% Modified the candidate- profile-building feature 6% We have taken no particular actions 22% 0 10 20 30 40 50 60 8 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

9. Finding: Video conferencing platforms and electronic signatures applications have become more common Among employers that have taken TA actions in response to the pandemic, most have adopted video conferencing platforms and electronic signature applications. This is expected, as these solution technologies are fairly easy to implement and can be seen as “low hanging fruit.” Meanwhile, nearly a fifth (17%) adopted a diversity and inclusion solution that is intended to remove or reduce unintended bias in the recruitment process. Survey Question: Aside from possible features included with your ATS, what third-party recruitment-related solution technologies has your organization adopted in response to the Covid-19 pandemic, economic slowdowns and/or protest movements? Video conferencing platform (e.g., Zoom) 89% Electronic signature (e.g., DocuSign, Adobe) 56% Diversity and inclusion solution to remove unintended bias 17% Enhanced top-of- funnel filtering and/or matching tools 13% 0 20 40 60 80 100 9 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

10. How Effective Is Talent Acquisition Today? Finding: Slightly more than half of respondents rate the overall effectiveness of their TA efforts as good or excellent A little more than half (54%) of HR professionals say their organization’s current TA efforts are either excellent or good. This is not significantly different from the 52% mark seen in 2019. On one hand, this indicates that the overall quality of recruitment practices has only held steady. On the other hand, it suggests that, taken as a whole, talent acquisition professionals have generally been able to maintain their levels of effectiveness even during a turbulent period. Perhaps we would be seeing a larger increase had the Covid-19 pandemic not happened. An era of labor uncertainty Responding effectively in this period of uncertainty may be one reason that the average cost to attract a job seeker and convert them into a job applicant—aka, cost per applicant (CPA)—rose from about $12 in January of 2020 to $19 by June. Another factor might be that many people stopped seeking work during the initial period of urgency when many households were striving to contend with an array of factors, including childcare emergencies as schools and daycare centers closed. As of this writing, the U.S. employment situation remains hard to predict. Unemployment rates rose from 3.5% in February 2020 to 14.7% in April and then back down to 8.4% within four months. Many jobs that require an onsite presence have reportedly been going unfilled, perhaps due to the potential danger from the Covid-19 virus. Moreover, many Americans have been moving due to Covid-19, which can make filling certain jobs more complicated. And, no one is sure what the next economic quarter will bring. 10 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

11. However we view these shifting circumstances, it does not appear that recruitment has suddenly become an easy task for most employers or that most job applicants are having an easy time locating work. In short, the U.S. job and labor markets remain in flux at the time of this writing, and it is uncertain when they will become more predictable again. In the meantime, HR professionals generally—and talent acquisition experts more specifically—must stay agile and able to quickly respond to new developments as they occur. Survey Question: How would you rate the overall effectiveness of talent acquisition/recruitment in your organization? 13% Excellent 41% Good 35% Average 7% Below average 4% Far below average 0 10 20 30 40 50 Later in this report, we will use the answers to this question to analyze differences between two survey cohorts: ● High-performing TA firms: These represent respondents who indicate that their firms are good or excellent at talent acquisition/ recruitment. ● Lower-performing TA firms: These represent respondents who say that their firms are average, below average, or far below average at talent acquisition/recruitment. 11 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

12. How Prevalent Are Applicant Tracking Systems? Finding: Nearly three-quarters of responding organization use an ATS A majority (73%) of organizations now use an ATS, up from 64% in 2018. Thirty-five percent use at least one stand-alone system and 44% use an ATS that is part of a larger HR technology platform. Of course, some organizations use both so there is some overlap between the two. These are typically larger organizations that have multiple strategic business units, some of which may have their own ATS. Large organizations (those with more than 1,000 employees) are most likely to have an ATS, with 88% reporting they have at least one. What’s more, large organizations are also more likely than average to use a point solution (49%) compared to a system that is part of a larger HR technology platform (47%). Survey Question: Does your organization currently use one or more applicant tracking systems (ATS)? (select all that apply) Yes, at least one recruitment module of a larger system/platform 44% (e.g., HRIS) Yes, at least one 35% stand-alone (that is, point solution) system 27% No 0 10 20 30 40 50 Editor’s Note: Some organizations use both stand-alone systems and systems that are a module of a larger platform. 12 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

13. Finding: High-performing TA firms are more likely than other organizations to use an ATS Among high-performing TA firms, 81% currently use an ATS, compared to just 65% of their lower-performing counterparts. The data does not prove a causal relationship between recruitment excellence and using an ATS, but it does suggest a correlation. We interpret this to mean that, although higher ATS usage is correlated with higher TA performance, it does not guarantee it. To be successful, an ATS must be used well in conjunction with other talent acquisition best practices. Survey Question: Does your organization currently use one or more application tracking systems (that is an ATS)? [Percent using an ATS] High-performing TA firms 81% Lower-performing TA firms 65% 0 20 40 60 80 100 13 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

14. Finding: Sixteen percent of firms without an ATS have definite plans to implement one in the next two years, and another 40% are considering implementing one in the future Among organizations that do not currently have an ATS, only 16% plan to implement one within the next year or more. This is a sharp decrease from 43% in 2019. We assume this is due to the Covid-19 pandemic and associated economic downturn. However, there was a modest increase in the proportion saying they are “thinking about” implementing one in the future, from 31% in 2019 to 40% in 2020. We interpret this to mean that many organizations would still like to implement an ATS in the future but, given today’s uncertain climate, have not formulated definite plans. Survey Question: Do you plan to implement an ATS in the future? 44% No 40% We’re thinking about it Yes, though more than a year from now 9% 7% Yes, within the next year 0 10 20 30 40 50 14 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

15. Finding: The primary barriers to further ATS usage are cost and a perceived lack of need The most commonly reported barrier to ATS usage, cited by 46% of respondents, is cost/expense. No other single reason for not using an ATS was selected by even 30% of the participants. The second and third most commonly cited reasons are: ● don't need one for our purposes (29%) ● don’t understand the benefits of ATS for us (25%) We should note, however, that this varies by size of organization. Among large organizations, the top perceived barriers (cited by 60%) are that “leadership will not commit to an investment in ATS.” This suggests that the perceived need may be there for some larger firms, but HR has not yet been able to convince leaders to invest in this area. In such cases, it may be incumbent on recruiters and HR practitioners to build stronger business cases for ATS use by illustrating the bottom line business benefits of ATS adoption. Survey Question: What are the most important reasons your organization does not currently use an ATS? (select all that apply) 46% Cost or expense Don't need one for our purposes 29% Leadership will not commit to investment in ATS 25% Don’t understand the benefits of ATS for us 25% Recruitment is working fine without one 24% Other projects/products are a higher priority 20% Lack of internal skills to effectively use one 14% 7% Cannot find an ATS we like 0 10 20 30 40 50 15 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

16. What Are the Benefits of Using an ATS? Finding: The most widely cited benefit of using an ATS is the ability to better manage the volume of applications/resumes Of those with an ATS, 71% say the ability to manage the volume of applications and resumes is the primary benefit of using an ATS in their organization. This will be an especially important benefit for organizations that are seeing more applicants per open position in a softer economy. In some organizations, there may also be fewer talent acquisition professionals on staff given recent downsizings. This potentially means fewer recruitment professionals handling a larger volume of applicants per open position so being able to efficiently manage applications is even more crucial now. A related issue, and the second most commonly cited benefit at 60%, is the need to reduce time to hire. For organizations seeing more applicants per open position, it can be challenging to locate the best candidates and then get them through the interview and assessment process in a timely manner. The third mostly widely cited issue is the ability to screen candidates better (58%). Again, this ATS capability is especially important when there are many applicants. We don’t think it is a coincidence that all three of these areas are cited by more than half of respondents. 16 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

17. Survey Question: What are the top four benefits of using an ATS in your organization? (choose up to four) Manage volume of applications/resumes 71% 60% Reduce time to hire 58% Screen candidates better Acquire better talent acquisition metrics 39% 38% Make better hires 35% Improve ability to assess 33% Optimize our recruiting spend Do compliance reporting 29% 0 10 20 30 40 50 60 70 80 17 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

18. Finding: Organizational and collaboration capabilities are most essential in ATS We asked about which five ATS capabilities are most essential for organizations. Three of the top five relate to organizational capabilities such as adding/exporting candidate information (66%), sending/organizing messages to candidates (59%) and scheduling/ calendaring (49%). The other two items relate to collaboration among TA team members (46%), which might also be viewed as an organizational capability, and lastly, providing access on mobile devices (48%). Providing mobile ATS access has, of course, been a long-term goal of recruitment professionals, who want candidates to be able to apply to positions from the convenience of their own mobile devices. However, the issue seems to have taken on new urgency in the current era of widespread remote work. Survey Question: Of the following capabilities, which five do you consider most essential for your organization's ATS? (select up to five) Easily add and export candidate information (e.g., resumes) 66% Send and organize emails/ messages to candidates 59% 49% Permit scheduling and calendaring 48% Provide access on mobile devices Allow easy collaboration among talent acquisition team members 46% Integrate with other needed systems and applications 44% 42% Permit enhanced search and matching Consolidate and show authorized information on a given candidate 40% 39% Distribute job ads Allow for employment branding 36% 0 10 20 30 40 50 60 70 80 18 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

19. What Do ATS Do Well and Not So Well? Finding: ATS perform three tasks especially well We asked participants how well their organization’s ATS perform a variety of tasks. The three tasks most commonly cited are: ● tracking candidates as they move through the recruitment process ● providing notification and alerts ● routing jobs and offers for executive approval These are crucial tasks. Of course, tracking is what ATS should do well, since the systems were designed for this and the word “tracking” is in the name of these systems. Tracking helps recruitment experts to follow candidate movement through stages such as assessments and screenings so they can bring the most qualified candidates to the forefront more quickly. Notifications and alerts can be viewed as integral to such tracking and can increase and automate efficiency. Routing jobs and offers for executive approval is, of course, also key to the process. Survey participants are less likely to be enthused about the ability of their ATS to gather and integrate employee referrals or automatically match candidates to the right job postings. 19 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

20. Survey Question: How good is your organization's ATS at the following tasks? [Percent responding very good and good only] Tracking candidates as they move through the process 33% 48% 81% Providing notifications 31% 41% 72% and alerts Routing jobs and offers for executive approval 33% 33% 66% Reporting mandatory 34% 28% 62% compliance data in a format that is easy to understand Giving the candidate a high-quality experience 34% 28% 62% Customizing the application process to specific needs of different jobs 34% 26% 60% Building or incorporating useful dashboards 34% 26% 60% Tracking key performance indicators (e.g., quality of hire, time to fill) 32% 25% 57% Gathering and integrating employee referrals 26% 21% 47% Automatically matching candidates to the right job postings 28% 18% 46% 0 20 40 60 80 Good Very good 20 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

21. Finding: A majority say their ATS helps organize the recruiting process and saves them time Most HR professionals agree that their ATS helps them stay organized (88%) and save time (78%), which is an increase from the data gathered in 2019 (75% and 70% respectively). This supports the previous finding that organizational capabilities represent the core strength of ATS. Perhaps even more encouraging, 72% say their systems are easy to use (unchanged from 2019). High ease-of-use scores are always a good sign for powerful and potentially complex technologies. The characteristic least commonly selected, however, is the ability to “locate internal talent” (just 41%). This jibes with the previous finding about how ATS do not tend to be good at gathering and integrating employee referrals. Survey Question: To what extent do you agree with the following statements for the ATS in your organization? 58% 30% It helps us stay organized 88% 48% 30% It saves us time 78% 45% 27% It is easy to use 72% 48% 17% It helps schedule and manage interviews 65% 37% 27% 64% It provides a positive return on investment 40% 20% 60% It has good customer service/support 36% 12% 48% It results in higher application completion It helps us understand how we spend our recruitment budget 31% 15% 46% 26% 15% 41% It enables us to locate internal talent It helps us identify candidates who are passively looking for jobs 29% 11% 40% 0 20 40 60 80 100 Agree Strongly agree 21 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

22. Finding: Most respondents say they make use of all or most of their ATS functionality We asked participants whether they make full use of the features and functionality of their ATS. About two-thirds (66%) say they do, whereas 35% say they do not. Although this 66% proportion is higher than in previous versions of this survey, it still indicates that many HR and/or recruitment professionals do not get the most out of their ATS, either because they do not need all the functionality or because they are not knowledgeable enough about how to leverage it well. We believe organizations should at least be aware of the full capabilities of their systems, even if they don’t always use them. Survey Question: Does your organization utilize all or most of the capabilities of its ATS? 35% No 66% Yes Editor’s Note: This does not include the 11% that say they don’t know whether or not most capabilities are used. Numbers do not add up to 100% due to rounding. 22 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

23. Finding: ATS could be better at integrating with other systems We live in a world where applications must increasingly communicate and integrate with other applications. ATS have a mixed record in this area. Among participants who know how well their ATS integrate with other applications, three integrations are most commonly cited: ● HRIS (or similar) integration is good or fair with these platforms (60%) there is a built-in component relationship (28%) the rest say integration is poor ● Assessments integration is good or fair (57%) they are a built-in component (22%) the rest say integration is poor ● E-verify (which determines a candidate’s eligibility to legally work) integration is good or fair (42%) this is a built-in component (27%) the rest say integration is poor Greater integration with other components can often bring strategic advantages. For instance, workforce planning is a process by which organizations prepare employees, managers and organizational structures for success in the future. Having an ATS that integrates with workforce planning applications might help employers to better identify internal candidates and match the skills and experience of external candidates to specific internal needs. 23 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

24. Survey Question: How good is your organization's ATS at integrating the following? Human Resource Information System (or similar) 18% 42% 28% 88% Assessments 20% 37% 22% 79% E-Verify/determine eligibility to legally work 14% 38% 26% 78% Social media applications 20% 40% 17% 77% Workforce planning 22% 32% 21% 75% Advanced sourcing tools 19% 36% 20% 75% Video conferencing platform (e.g., Zoom) 15% 38% 13% 66% Video interviewing platform 16% 37% 13% 66% Candidate satisfaction data (e.g., net promoter score) 14% 34% 12% 60% Automated reference checking 13% 27% 16% 56% 0 20 40 60 80 100 Fair Good This is already a built-in component 24 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

25. Finding: Most (71%) are satisfied with their ATS, but there is still considerable room for improvement A majority (71%) say they are satisfied with their current ATS, up from 61% in 2019. This still leaves, however, 29% who are not satisfied at all, implying there’s much room for improvement. Moreover, only about a fifth (21%) are very satisfied. This study suggests that there is fairly widespread (if tepid) satisfaction as well as considerable dissatisfaction. On one hand, ATS bring various benefits such ease of use as well as the ability to save time and stay organized. On the other hand, there are still concerns about areas such as integration with other systems, the inability to find internal talent, or problems reaching passive job seekers. Survey Question: Overall, how satisfied are you with your applicant tracking system (ATS)? 21% Very satisfied 50% Satisfied 22% Neutral 6% Dissatisfied 2% Very dissatisfied 0 10 20 30 40 50 25 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

26. Finding: A lack of ATS features is the most problematic aspect for HR professionals About two-fifths (40%) of the participants say their ATS does not have enough of the features they need, the most widely cited weakness of today’s systems (and also the most widely reported weakness in 2019 at 47%). The second most widely cited weakness in this year’s (24%) and also the 2019 survey (37%) is an absence of high quality report/analytics functionality. It is, of course, difficult to make good decisions without good data, so this could be an area where ATS vendors could improve in the future. Most respondents are dissatisfied with some aspect of their systems, with only 30% saying they “like everything about our ATS.” Survey Question: What do you like least about your ATS? (select all that apply) It does not have enough of the features that I need 40% It does not have good reporting/analytics functionality 24% It can't be used to effectively communicate with candidates 22% It provides a poor candidate experience 20% It is buggy 17% It is too complicated 16% It is difficult to use 16% It has bad customer service 13 I like everything about our ATS 30% 0 5 10 15 20 25 30 35 40 26 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

27. What Is the Candidate Experience Like? Finding: Many have no way to gauge the quality of the candidate experience We asked participants how they measure whether candidates have a positive experience when using their organization’s ATS. The most common answer to this question is, “We have no way of gauging their experience,” cited by 44%. As troubling as this appears, this actually represents a modest improvement over 2019 (47%) and 2018 (52%). Among those that do measure such experience, their most widely-used measurement tool is candidate surveys, closely followed by written feedback from candidates. In the write-in portion of this question, some respondents also mention directly asking candidates about their experience. Even among those that measure, they may not measure the experience of every candidate. One participant specified, for example, that they only seek feedback from candidates who made the first screening cut. Someone who abandoned their application and a candidate who made it through several screenings may have very different experiences and pain points. Gathering data from all types of candidates can make these systems more robust. Survey Question: How does your organization measure whether candidates are having a positive experience using the ATS? (select all that apply) We have no way of gauging their experience 44% Candidate surveys 31% Written feedback from candidates 29% Abandonment rates 26% 0 10 20 30 40 50 27 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

28. Finding: About half believe the candidate experience with their ATS is good or excellent Among the subgroup that can gauge candidate experience, 53% say their ATS delivers a good or excellent candidate experience. Although this sounds somewhat impressive, we should remember that this is only a minority of all organizations with an ATS. Many do not measure the candidate experience at all. We believe it is important to both measure and, when possible, improve the candidate experience. As the old adage says, “You only get one chance to make a first impression.” The candidate experience with the ATS often represents this one chance. Survey Question: Based on feedback and/or usage data, how would you describe the overall experience of applicants/candidates with your ATS system? Excellent 15% Good 38% Average 40% Below average 5% Poor 2% 0 5 10 15 20 25 30 35 40 28 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

29. Finding: Even with so many having no way to measure the experience, a significant majority have taken steps to improve the candidate experience in the last two years We asked respondents, “Has your organization embarked on a project to improve the candidate experience in the last two years?” Sixty-nine percent say they have done so, which is about the same as in 2019 (70%). Therefore, whether organizations are measuring the quality of the candidate experience or not, most are involved in some effort to improve it. This demonstrates the continued importance of candidate experience in the minds of most recruitment and HR experts. Survey Question: Has your organization embarked on a project to improve the candidate experience in the last two years? 31% No 69% Yes 29 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

30. In What Ways Do High-Performing and Lower-Performing TA Organizations Differ? Finding: High-performing TA firms appear to provide a better candidate experience More than two-thirds of respondents from high-performing TA firms (66%) say their organization provides a good or excellent candidate experience. In contrast, just 24% of the lower-performing TA firms say the same thing, albeit with none saying they provide an excellent candidate experience. Just as striking are the percentages of these cohorts saying they provide a below average or poor experience. In high-performing TA organizations, a scant 2% say they provide a below average experience and none of them say the experience is poor. In the lower-performing TA firms, 18% say their candidate experience is either below average or poor. These findings are virtually unchanged from 2019. Survey Question: Based on feedback and/or usage data, how would you describe the overall experience of applicants/candidates with your ATS system? High-performing TA firms 45% 21% 66% Lower-performing TA firms 24% 24% 0 10 20 30 40 50 60 70 80 Good Excellent 30 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

31. Finding: The ATS in high-performing TA firms perform a variety of tasks at higher levels than those in lower-performing TA firms High-performing TA firms get higher levels of performance from their ATS across the board. In what may help explain the different quality of the candidate experience, 77% of high-performing TA firms say their ATS is good at customizing the application process, compared to 34% of lower-performing TA firms. High-performing TA firms also say their ATS offers candidates a high-quality experience at a much higher rate than lower-performing TA firms—77% to just 36%. More than half of both cohorts say their ATS is good at tracking candidates through the process. But that is only one of two tasks that more than half of lower-performing TA firms say their ATS performs well, along with “providing notifications and alerts.” Conversely, there are no tasks that fewer than half of higher-performing TA firms say their ATS performs well, with the lowest being automatically matching candidates to the right job postings at 60%. Just 63% of lower-performing TA firms say their ATS is good or very good at tracking candidates compared with nearly all of high-performing TA firms. Tracking candidates is the most basic function an ATS should be able to do, yet more than a third of lower performers aren’t happy with the most crucial of tasks. 31 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

32. Survey Question: How good is your organization's ATS at the following tasks? [Percent responding good or very good] 91% Tracking candidates as they move through the process 63% 81% Providing notifications and alerts 54% Customizing the application process to specific needs of 77% 34% different jobs 77% Giving the candidate a high-quality experience 36% 75% Routing jobs and offers for executive approval 49% Reporting mandatory compliance data in a format that is easy to 75% 39% understand 71% Building or incorporating useful dashboards 30% 71% Tracking key performance indicators (e.g., quality of hire, time to fill) 34% Automatically matching candidates to the right job postings and alerting the 60% 25% recruiter 0 20 40 60 80 100 High-performing TA firms Lower-performing TA firms 32 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

33. Finding: High-performing TA firms make greater use of their ATS capabilities As we just saw, ATS in high-performing TA firms are more likely to perform every task at a higher level than in lower-performing TA firms. While we can’t say for certain the data are clearly related, 76% of higher- performing TA firms say that they utilize “all or most” of the capabilities of their ATS, compared to just 48% of lower-performing TA firms. It seems fair to infer that the firms utilizing more of the capabilities of their ATS would see better overall performance, and the data supports such an inference. Survey Question: Does your organization utilize all or most of the capabilities of its ATS? 76% Yes 48% 0 10 20 30 40 50 60 70 80 High-performing TA firms Lower-performing TA firms 33 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

34. Finding: High-performing TA firms gauge the quality of the candidate experience at much higher levels than their lower- performing peers Why do high-performing TA firms provide a better overall candidate experience? One key factor may be that they bother to measure that experience, with only 40% saying they have no way to gauge the candidate experience. In contrast, 53% of lower-performing firms have no way to gauge the candidate experience. Among those that do measure employee experience, high-performing TA firms are considerably more likely to use candidate surveys and obtain written feedback from candidates. Survey Question: How does your organization measure whether candidates are having a positive experience using the ATS? (select all that apply) 40% We have no way of gauging their experience 53% 33% Candidate surveys 28% 35% Written feedback from candidates 17% 29% Abandonment rates 19% 0 10 20 30 40 50 60 High-performing TA firms Lower-performing TA firms 34 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

35. Finding: High-performing TA firms are almost twice as likely to say they are satisfied or very satisfied with their ATS High-performing TA firms are far more likely to be satisfied or very satisfied with their ATS. Since these organizations are also far more likely to utilize more capabilities of their ATS, they most likely have a deeper understanding of the capabilities and how they can benefit their organizational recruiting needs. Survey Question: Overall, how satisfied are you with your applicant tracking system (ATS)? [Percent responding satisfied and very satisfied] 86% 41 pt. gap 45% 0 20 40 60 80 100 High-performing TA firms Lower-performing TA firms 35 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

36. Finding: Integrating advanced sourcing tools and social media applications represent the largest gaps between high- performing and lower-performing TA firms Just over half of high-performing TA firms (57%) integrate advanced sourcing tools into their ATS, compared with just 31% of lower- performing TA firms, a 26 percentage-point gap. The second largest gap (at 20 percentage-points) is integrating social media applications. High-performing TA firms are also more likely to integrate candidate satisfaction data such as net promoter scores. This could be one of the reasons why high-performing firms are more than twice as likely to say they give candidates a high-quality experience. Survey Question: How good is your organization's ATS at integrating the following? [Percent responding good or this is already a built-in component] 57% Advanced sourcing tools 26 pt. gap 31% 56% Social media applications 20 pt. gap 36% 49% Video interviewing platform 15 pt. gap 34% 46% Workforce planning 17 pt. gap 29% 43% Candidate satisfaction data (e.g., net promoter score) 16 pt. gap 27% 0 10 20 30 40 50 60 High-performing TA firms Lower-performing TA firms 36 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

37. Finding: Nearly half of lower-performing TA firms feel their ATS is not easy to use Just half (51%) of lower-performing TA firms agree or strongly agree that their ATS is easy to use compared with 86% of high-performing TA firms. Because of this, lower-performing TA firms are probably unable to use or unaware of more advanced functionalities that their ATS is capable of. More concerning is that fewer than half of respondents at lower- performing TA firms feel their ATS provides a positive return on investment (ROI). The cost per applicant at these organizations might be higher than at those that do believe the ROI of their ATS investment is positive. Again, this is potentially because these organizations are not maximizing the available capabilities, or simply lack such capabilities. Survey Question: To what extent do you agree with the following statements for the ATS in your organization? [Percent responding agree or strongly agree] 86% It is easy to use 35 pt. gap 51% 78% It provides a positive return on investment 44% 34 pt. gap 0 20 40 60 80 100 High-performing TA firms Lower-performing TA firms 37 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

38. What Are the Most Exciting Major Innovations of Today and Tomorrow? Finding: Participants are most likely to cite text messaging capability as an exciting new improvement and innovation This year’s respondents are most likely to choose “text messaging capability to improve candidate engagement” and “integration with new hire onboarding process” as examples of exciting improvements and innovations (cited by 56% in both cases). The movement of text messaging to the top response is an interesting development. In 2019, 51% of participants cited text messaging as an important development, but it was only the fourth most commonly chosen item. However, this year we asked the question a little differently, referring to “excitement” rather than “importance.” What makes this capability so exciting? It allows recruitment professionals to engage in one of the most effective means of candidate communication. According to Aman Brar, CEO of Canvas, “Texting...is different. A job candidate can respond in less than 1 minute without disrupting his or her day. It’s fast, obscure, and doesn’t pull the candidate away from current work. With robust recruiting platforms, the average time to screen a candidate is just 4.4 minutes.”1 Of course, because it is such an intimate form of communication, text messaging brings its own challenges and recruitment professionals must use it with care. As for integration with onboarding, this is probably viewed with 1 Brar, Aman. 5 Ways Text Interviews Will Surprise You. Undercover Recruiter. Retrieved from http s://t heundercoverrecruiter.com/text-interviews/ 38 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

39. excitement because it, among other things, makes the onboarding process more seamless. One of the chief complaints about current ATS is their inability to integrate effectively with other key systems or applications. This is slowly changing as vendors respond to user needs. Two other exciting innovations mentioned by more than half of participating HR professionals include “improved capability to ‘autofill’ application from candidates’ resumes and online social profiles” and “integration with online social media sites such as LinkedIn.” Survey Question: What recent improvements and innovations in ATS excite you most? (select all that apply) Text messaging capability to improve candidate engagement 56% Integration with new hire onboarding process 56% Improved capability to “autofill” application from candidates’ resumes and online social profiles 52% Integration with online social media sites such as LinkedIn 52% Ability to better communicate with candidates who do not complete 46% applications Ability to monitor diversity in hiring 45% Mobile ATS features 44% Use of artificial intelligence to improve screening of 41% candidates Emergence of recruitment marketing technologies 23% 0 10 20 30 40 50 60 39 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

40. Finding: In the next three to five years, participants say they expect to see greater personalization and improved assessment Internet users encounter an astounding amount of highly personalized online experiences every day, so it makes sense that applicants expect to see similar levels of personalized content and information in their job search and application process. Sixty percent of HR and recruitment professionals say greater personalization will be among the most beneficial ATS enhancements over the next three to five years. The second most widely cited near-future enhancement is “improved assessment and filtering tools.” When they work well, such tools can boost the productivity of talent acquisition professionals by automatically filtering out less qualified candidates. However, there is also a danger that the wrong kind of assessments or filters could have an adverse impact on people based on their ethnicity, age, sexuality, gender, etc. To help prevent bias from creeping into the recruitment process, more recruitment professionals are seeking to “anonymize applicants and/or candidates (to reduce the potential for bias).” This is seen as a beneficial possibility by 48% of respondents. Survey Question: What do you believe will be the most beneficial ATS enhancements over the next three to five years? (select all that apply) Greater personalization 60% Improved assessment and filtering tools 58% Ability to anonymize applicants and/or candidates (to reduce the potential for bias) 48% More flexible reporting capability 47% Integration of features that harness artificial intelligence capabilities 46% Appending data with current publicly available data 25% 0 10 20 30 40 50 60 40 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

41. Key Takeaways 1 Maximize the features and functionality of your ATS. Your TA professionals need to keep learning, develop new skills, and adopt a continuous learning and improvement approach. The data in the report shows that high-performing TA organizations tend to get greater use out of their ATS across the board. So, commit to a process of continuous learning and improvement with your ATS. Conduct continuous training. Engage more deeply with your ATS vendor to keep abreast of enhancements, changes, best practices and tips. Find user communities that have the same ATS program and then learn from others in those communities. Key Takeaway 2 Gather data on the candidate experience. This can include application completion rates (the rate at which people who start your online application actually complete it) and the rate at which applications are completed without errors. It can also include items such as the top sources of quality candidates and good hires. Did they find you through social media? Did they use a job board, and if so which ones? You can also survey applicants and candidates, and you might even gather feedback through candidate interviews. The data you gather in each area can serve as a starting point from which you can benchmark the organization’s progress. Key Takeaway 3 Find ways to improve the candidate experience. Once you collect candidate experience data, seek ways to leverage it to improve the candidate experience. In some cases, this means improving existing processes and technologies. One important factor to evaluate thoroughly and objectively is your online application process. Candidates get frustrated with the length of applications, so make sure you are asking for just the key information you need to successfully complete a first stage screening. Use your ATS to track the amount of time it takes from start to finish and watch those application abandonment rates! If your candidates are dropping off at specific places, make adjustments. Key Takeaway 41 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

42. 4 Find passive job seekers. Many of the very best candidates are not actively pursuing new jobs. This is an area where most ATS and TA operations may be improved. The best candidates are likely on LinkedIn, use Twitter and enjoy Facebook. LinkedIn in particular can be a valuable platform for searching for hard-to-find skills or qualifications. But you won’t find these candidates unless you are actively engaged on the platform. Be ready and able to attract the attention of top candidates. Think like the marketing department! Publish engaging content to create leads (meaning qualified applicants). Some ATS have the capability to effectively download social media profiles into your system. Consider running key word searches on those profiles. When you find matches, you may want to send those people direct messages with a link to your online application or a job posting and encourage them to apply. Key Takeaway 5 Pay close attention to reporting functionality in ATS. When making purchasing decisions or deciding whether or not to update a current system, make sure you examine reporting capabilities. It’s also a good idea to reach out to your current ATS customer success team. Ask questions about both current and future reporting capabilities, and make sure you are using all of the data reporting tools at your disposal. Key Takeaway 6 Examine integration capabilities. Based on this research, it’s important to consider the integration capabilities of any ATS when making renewal, purchasing or implementation decisions. For instance, your organization may use an automated drug screening and reporting tool. Test whether your ATS can integrate with these tools so results can be attached to candidate records in real time. Key Takeaway 7 Look for systems that help meet strategic and not just tactical needs. Strategic talent acquisition goals may include improved quality of hires, greater employee retention, greater engagement with passive job candidates, and acceleration of the organizational learning curve for newly hired employees. For example, let’s assume the organization needs to hire skilled employees in a specific job category to meet strategic corporate goals. This may require improved candidate screening and improved matching of resumes and qualifications to job openings. With these two specific features in mind, you can evaluate ATS capabilities and, if they are not satisfactory, look for ways of upgrading the current system or seeking new systems that meet organizational needs better. Key Takeaway 42 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

43. 8 Understand how talent acquisition is changing due to the Covid-19 pandemic. Recruiting and talent acquisition have been deeply affected in some areas. Ensure your ATS can adapt to the changing trends such as video-interviewing capabilities and compliance checks of more non-local candidates. Moreover, stay agile and resilient. Recruitment professionals cannot be sure how things will change from quarter to quarter these days. They need to be prepared for multiple contingencies and react quickly to these changes as they occur. Key Takeaway 9 Leverage internal candidate capabilities when it is to your advantage. Recruiters sometimes fail to look internally for candidates for open positions. Part of the issue is that many recruitment technologies are not designed for this purpose. Consider implementing processes and systems that seek inward as well as outward for good candidates. This often requires good internal communication as well as a database that allows recruiters to identify internal skill sets. Key Takeaway 43 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020

44. About EMP Trust EMP Trust HR provides human capital management (HCM) and talent management solutions and services for a global workforce. Our secure solutions help companies recruit and hire talent, complete new hire onboarding with electronic forms, and comply with DHS/USCIS regulations. We provide Human Resources solutions and services for electronic form I-9, E-Verify, HR Onboarding, and provide tools for workforce management to maximize employee efficiency and improve your business processes. We are a United States Corporation incorporated in Maryland as a Limited Liability Corporation in 2009. About HR.com and the HR Research Institute The HR Research Institute helps you keep your finger on the pulse of HR! Powered by HR.com, the world’s largest community of Human Resources professionals, the HR Research Institute benchmarks best practices and tracks trends in human resources to help more than 1.75 million HR professionals (that many people can’t be wrong!). Companies are backing up their strategic decisions with informed and insightful HR.com research references! Over the past few years, the HR Research Institute has produced over 100 leading-edge primary research and state of the industry research reports, along with corresponding infographics, based on surveys of thousands of HR professionals. Each research report highlights current HR trends, benchmarks and industry best practices. HR Research Institute reports and infographics are available online, and always free. Visit hr.com/ featuredresearch to maximize your HR potential. #hrresearchinstitute 44 The State of Applicant Tracking Systems 2020 www.hr.com | 877-472-6648 | copyright © HR.com 2020