ATS ROI: How to Achieve, Measure & Realize Value
- Published:
- Updated: July 2, 2024
Recruiting high-quality talent is a complex process. Hiring teams need to be able to keep up with rapidly incoming applications and sort through materials to identify the best candidates for each open position.
An applicant tracking system (ATS) is a software solution that streamlines the tracking and management of applications from submission through hiring. Some of the most popular ATS vendors are Workday, Bullhorn, and iCIMS. These solutions are significant investments with big benefits that have organization-wide impacts.
ATS solutions drive HR transformation and hiring business objectives by automating processes, reducing hiring times, ensuring compliance, and filling each role with high-quality candidates. Here are some of the most critical areas that benefit from maximizing ATS return on investment (ROI):
- Optimized recruitment budget: ATS platforms make every aspect of recruiting and hiring more efficient by automating the posting of job openings and screening residents as they come in. This efficiency allows recruiters to spend less time with tasks that can be handled by the ATS and shift their focus to issues and processes that require a human touch. Over time, these efficiencies save thousands of dollars and maximize your organization’s recruitment budget.
- Enhanced hiring efficiency: An effective ATS makes hiring more efficient by using recruiting metrics and insights to eliminate irrelevant candidates and allowing hiring teams to focus on applicants who are well-suited to the positions that need to be filled, ultimately reducing the time to hire.
- Improved quality of hires: By eliminating irrelevant and under-qualified candidates, applicant tracking systems help hiring teams pick out the best applicants for open positions. This improves employee experience across organizations and reduces turnover, which allows businesses to perform better and stay competitive in evolving markets.
- Data-driven decision making: Applicant tracking systems include recruiting analytics tools that analyze data to improve hiring processes and help eliminate risks of unconscious bias in the hiring process. These insights give hiring teams all the information they need for effective decision-making across the board.
- Alignment with business goals: A high-quality ATS includes customized recruitment workflows and talent pipeline tools that help HR teams hire based on strategic organizational goals and objectives. By building a candidate database full of highly qualified candidates, applicant tracking systems can help hiring teams find candidates who best align with organizational needs and adapt the entire recruiting process to grow and improve along with any organization.
How to Calculate ATS ROI
While the benefits of implementing a highly effective ATS are substantial and far-reaching, they can be difficult to quantify if you don’t know where to look. Hiring processes impact every aspect of an organization because the employees that get hired end up powering every aspect of the business.
Calculating the ROI of an ATS is critical for demonstrating the importance of an ATS before and after your team acquires one. Here are some key aspects of ATS ROI to calculate to show its value:
1. Determine the total costs of implementing and maintaining the ATS
First, identify every cost associated with acquiring and rolling out your new ATS. This will include expenses like software licenses, data migration, user training, and any other costs related to support or implementation.
2. Calculate the efficiency gains in the hiring process (time saved, reduction in cost per hire, etc.)
Next, calculate the efficiency improvements that will be achieved through the new system. From advertising costs to team member time, quantify the time and resources saved due to new efficiencies and keep a running tally.
3. Measure the improvements in the quality of hires and their performance metrics
Increasing high-performing talent within your organization’s workforce improves profit margins and brings substantial ROI.
To project profit per hire, pull the Revenue Per Employee numbers from your company’s Securities and Exchange Commission (SEC) or other year-end financial report and multiply by 40% to get an estimate of the profit margin for each hire. Then subtract the cost of your ATS from the additional value of employees hired through the system.
Value of high-quality employee – annual cost of ATS = profit per hire
4. Quantify the reduction in recruitment outsourcing or third-party costs
Applicant tracking systems help teams build a database full of high-talent candidates. This reduces the need for recruitment outsourcing and third-party job-posting advertisements. Measure all of the costs saved by the organization as a result of these changes.
5. Calculate the savings from reduced hiring errors or turnover
Applicant tracking systems help hiring teams appoint well-fitting candidates to open positions. This increases the likelihood that new hires feel secure in their new roles and achieve longer tenure within the company.
To determine the cost of annual turnover, start by multiplying the number of annual hiring errors (regrettable departures) by the average cost of departure (costs related to hiring and onboarding each employee).
Hiring errors x cost per departure = annual cost of turnover
6. Assess the financial impact of faster hiring processes on business productivity
Measure improvements in time-to-hire with metrics like days to fill each vacancy and offer acceptance rates. Use financial reports to find costs associated with lost productivity during vacancies to assess the impact of faster hiring processes.
7. Calculate the total benefits derived from the ATS in monetary terms
Add up the total of all the above amounts to determine the total monetary benefit your organization will receive from a new applicant tracking system.
8. Compute the ROI using the formula: (Total Benefits - Total Costs) / Total Costs
Finally, calculate the total ROI of the ATS based on the results from previous steps with this formula:
ROI = (Total Benefits – Total Costs)/Total Costs
Key Metrics for Measuring ATS ROI
- Time-to-hire: the time elapsed between the moment a candidate applies for a position and when they accept an offer
- Cost-per-hire: the cost of hiring a new employee based on all the expenses that go into recruitment, such as advertising and onboarding
- Quality of hire: the quantified value a hire brings to a company based on job performance and tenure within the organization
- Productivity gains: a measure of the benefits a company receives from increases in employee productivity
- Reduction in hiring errors: a measure of the benefits a company receives from reducing the number of ill-fitting candidates hired by an organization
Challenges in Measuring ATS ROI
Complex metrics, overlapping benefits, and difficulties projecting long-term effects make measuring the precise return on investment for your company’s ATS troublesome. Here are some of the most common challenges associated with measuring the ROI of an applicant tracking system:
1. Quantifying intangible benefits
Some of the benefits associated with an applicant tracking system can be estimated or qualified, but they are much more difficult to quantify in dollars. For example, improvements to employer perception and candidate hiring experience are beneficial, but attempting to quantify these metrics might not truly capture their value.
Solution: Use surveys, feedback, and qualitative data to supplement hard metrics and showcase these significant but intangible benefits for what they’re truly worth.
2. Gathering accurate data
Accurate data is essential for precisely analyzing your ATS return on investment. When data is gathered by different teams or stored across systems, its integrity may be compromised, leading to more valuable insights and accurate calculations.
Solution: Establish a robust data management system with data validation and integrate data to ensure your data is accurate and consistent.
3. Resistance to change and adoption hurdles
Poor change management can be a huge obstacle to adopting a new applicant tracking system; if unaddressed, it can significantly limit the potential benefits of your ATS. Smooth implementation and strong user adoption require additional resources and planning in addition to existing HR efforts.
Solution: Maintain transparency throughout implementation to highlight the benefits of ATS, provide comprehensive training, and secure buy-in from your hiring team and other stakeholders.
4. Standardized methodology for ROI assessment
We all know comparing apples to oranges is fruitless. Because every business operates within unique circumstances, like industry, organizational size, and recruitment strategies, there is no set playbook for determining ATS ROI.
Solution: Develop a consistent framework for calculating technology ROI that is used across the entire organization. This will allow your teams to standardize ROI calculations within the company and perform more accurate benefit analyses.
Best Practices for Achieving ATS ROI & Maximizing Value Realization
The work to achieve maximum value for your ATS investment does not end after the software is rolled out. Follow these best practices to drive ATS adoption and maximize the value of your new investment:
1. Provide hands-on onboarding and training for ATS users
Whatfix Mirror makes it possible to create interactive replica environments of web applications for virtual hands-on user training without the risks of live software usage or impacting your data quality. Hands-on onboarding and training enable new and existing employees to acclimate to your new ATS.
2. Support HR and recruitment teams in the flow of work
Whatfix DAP comes with a no-code visual editor that empowers teams to create relevant learning content that can be delivered in employees’ moments of need. This DAP includes numerous content types, like Interactive Walkthroughs, Smart Tips on critical friction points, in-app Pop-Ups with additional ATS-related process documentation, and Self-Help knowledge libraries that support employees learning to use the ATS.
3. Monitor key ATS business metrics to benchmark objectives
Choose an ATS with robust data analytics to track benchmarks and KPIs as you implement your new applicant tracking system. Monitor these metrics beyond implementation to track ROI and extract insights for process improvements.
4. Use analytics to identify ATS process friction and completion rates
Whatfix Analytics includes easy-to-install event capturing that empowers teams to track and analyze every user action, including clicks, page visits, and mouse hovers. Insights from this tool help teams boost process efficiency and identify areas where recruiters require additional support.
5. Collect feedback from ATS users
Deploy Whatfix in-app Surveys to collect feedback from recruitment teams as they navigate the new ATS to gather more information about their experience. These can be programmed to be delivered based on time triggers or specific user actions to ensure they reach learners when they are most likely to respond.
Analyze user responses and survey effectiveness with Whatfix behavioral analytics to continue maximizing ATS ROI and employee support efforts.
6. Keep ATS users updated on all hiring process changes and product updates
Employee communication and support are essential to maximizing ATS ROI and creating a positive and engaging employee experience. Keep recruitment teams in the know by alerting them of process changes and team updates with Whatfix in-app Pop-Ups and use in-app Flows to guide users through new processes for hands-on learning.
Examples of Companies Maximizing ATS ROI With Whatfix
Whatfix DAP and Analytics provide hiring teams with the tools to increase the ROI of the applicant tracking system. Easy-to-use tools for creating personalized in-app learning experiences like Tours, Task Lists, and Smart Tips help HR leaders engage employees as they learn to work within your new applicant tracking system. Self-Help libraries, in-app Surveys, and powerful user-behavior analytics help leaders provide additional support and identify areas for process improvement.
Whatfix is proven to help companies tap into ATS benefits by facilitating user adoption and identifying areas of user friction. Here are two organizations that successfully enabled their recruiters and facilitated ATS transformation with Whatfix:
1. Manpower’s ATS Transformation
Manpower Group is a Fortune 500 staffing firm that used Whatfix to accelerate the adoption of its new ATS, Bullhorn. With WHatfix, Manpower provided recruiters with relevant, in-app guidance and real-time support as they learned to utilize this essential new technology.
“The in-system training is a game changer. Whatfix really helped us move the needle toward using more current and innovative training solutions. We strongly value innovation as an organization and that includes innovating the way we learn.”
Jill Busch, Director of Learning and Development at Manpower
2. The Select Group’s ATS Transformation
The Select Group is a technical services firm that provides customized solutions to help organizations with project development, team scaling, and optimal service delivery. This firm invested in the Whatfix DAP to help recruiters adopt a new ATS through in-app guidance and self-help support.
The Select Group Enabled Its Recruiters and Accelerated ATS Transformation With Whatfix
Use Whatfix to empower your hiring team to maximize ATS ROI with personalized in-app guidance and moment-of-need support. With Whatfix, you can ensure end-users receive a seamless training experience that improves time to proficiency through Flows, Smart Tips, and Task Lists.
Whatfix also helps leaders continue enabling users as their organizations evolve with powerful insights from Whatfix behavior analytics. Whatfix helps HR and hiring teams achieve critical goals to help their organizations build a skilled and agile workforce.
Transform your recruitment process by integrating Whatfix’s training solutions into your ATS strategy.
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