Several years back, economist and human behavioral science expert Dan Ariely ran an experiment on options and choices (one of hundreds of experiments he’s run over the years). He found that when you offer just two choices, people are more rational and split their attention between the premium and inexpensive options. But if you offer three choices with one being visibly superior, one being visibly inferior, and one middle-of-the-road option that skews inferior, you tended to drive more choices towards the top (premium) option.
How we make choices and perceive value is a complicated thing, and that includes when any of us are considering HR technology. Our research over the years has shown that HR tech is a key aspect of supporting organizational agility and a critical enabler of business strategy and outcomes. But what if your next choice came with an option not just for software, but for data as well?
This week I spoke with the leadership team at Rival (formerly known as SilkRoad). They are doing some interesting work on refreshing the brand and tackling some new product direction (note: I’m watching them closely). During the discussion, I had an “aha” moment when I saw one of their competitive positioning elements: offering not just an applicant tracking system, but an ATS paired with access to 700 million candidate profiles.
Hmmm. The problem for many companies isn’t having a place to store resumes. It’s being able to access and convert candidates, and this might be a game changer in how TA leaders look at this sort of problem.
The ATS Often Gets a Bad Rap, But…
In our 2021 TA research, we found that when given an option to rebuild their talent acquisition technology toolset from scratch, the first item on the list ended up being the ATS.
- We need a default place to put resumes.
- We need it for compliance and tracking.
- We need a way to capture candidate information that’s more modern than “Just email your resume to careers@…”
But most employers don’t love the ATS. But that’s because we rarely compare an ATS against another. We’re comparing them against solutions like CRMs and recruitment marketing systems that are built for look and feel. Those tools don’t have to carry the burden that the ATS does when it comes to tracking every candidate action, providing audit reports for candidate reviews, keeping up with candidate self-identification demographics for EEO reporting, etc.
So could this trend of ATS + data be changing the value companies place on an applicant tracking system?
Packaging Data with a Software Purchase: Use Cases and Examples
By the way, this is happening at multiple companies:
- Rival, mentioned above, has married up Entelo’s talent and sourcing tools with Silkroad’s existing ATS.
- Paycor acquired Talenya and turned that into Paycor Smart Sourcing, offering access to a massive database of candidate profiles. It’s worth mentioning that this is really the first company to offer this paired offering at the smaller end of the market (Paycor’s target prospect is SMB).
- Loxo has been doing this for years with its ATS+CRM product with Loxo Source. They have some impressive enterprise and RPO/staffing client wins.
And if you want standalone options outside the ATS for sourcing candidates, you can choose from Findem, Seekout, HireEZ, and others.
So I go back to my original question: would you prefer an ATS purchase that has data as part of the deal? It’s an intriguing element that could become more commonplace and expected from HR and talent technology buyers in the future.
If it helps for comparison purposes, this is actually similar to what I see happening in the learning space. It’s not uncommon to find a learning management system that is sold preloaded with some stock content for compliance or standardized purposes (soft skills, etc.) While it’s not an exact one for one comparison, it’s still a good example of a sweetener to make a purchase more appealing for an employer, and it may help to reduce the overflowing numbers of talent tools in place for some employers.
In a world where I hear the phrase “we’re in a data arms race” on a regular basis, this seems like a chance for an interesting shift in the conversation for employers looking for new hiring technology. Maybe we’ll see some of this show up in the next iteration of our HR Tech Awards program?
Ben Eubanks is the Chief Research Officer at Lighthouse Research & Advisory. He is an author, speaker, and researcher with a passion for telling stories and making complex topics easy to understand.
His latest book Talent Scarcity answers the question every business leader has asked in recent years: “Where are all the people, and how do we get them back to work?” It shares practical and strategic recruiting and retention ideas and case studies for every employer.
His first book, Artificial Intelligence for HR, is the world’s most-cited resource on AI applications for hiring, development, and employee experience.
Ben has more than 10 years of experience both as an HR/recruiting executive as well as a researcher on workplace topics. His work is practical, relevant, and valued by practitioners from F100 firms to SMB organizations across the globe.
He has spoken to tens of thousands of HR professionals across the globe and enjoys sharing about technology, talent practices, and more. His speaking credits include the SHRM Annual Conference, Seminarium International, PeopleMatters Dubai and India, and over 100 other notable events.