How Do You Measure the ROI of an Applicant Tracking System?

Applicant tracking systems (ATS) are an invaluable tool for recruiters. These programs provide you with clear data, boost the success of your recruitment efforts and enable you to manage your entire recruitment process efficiently. But how do you know whether your ATS is cost-effective?

Does it save time?

On a basic level, the return on investment (ROI) of an ATS boils down to the old classic: time and money. An ATS is a tool, a facilitator that improves recruitment. Like all tools, it’s designed to make your life easier and speed up your tasks.

The ROI on that system is therefore a measurement of how effective that tool is. If you have an ATS, ask yourself:

  • Has my cost of recruitment and time to hire reduced?
  • Has employee retention improved?
  • Am I wasting less time on data entry and redundant tasks?

These types of questions will give you an initial look at your ROI.

But let’s dig deeper. After all, any program that automates tasks will save you time, and therefore money. The true payoff of an ATS is how that system can drive ROI within the recruitment process.

What insights does it provide?

The fundamental value of an ATS is its ability to deliver clear data from every stage of recruitment. Most ATSs will save you money compared to an inefficient system like filing cabinets or Excel spreadsheets. The difference between different ATSs lies in the usefulness of the data they provide and the depth of analysis they enable.

What data does it track?

An ATS provides data that can help formalise your recruitment process and inform your decisions. As a result, the ATS with the most complete, transparent and useful data will create the greatest return on investment.

That data should come from the entire process, not just advert to hire. The best ATSs provide a 360° view that starts when you decide you need to hire someone and continues through the onboarding process. You should be able to track every step along the way to gain the most insight — and therefore save the most money.

For instance, if you can track where your candidates are coming from, you can know which adverts are effective and direct your ad spend accordingly. Those savings are part of the overall ROI of the ATS.

Similarly, you need to know what platform your prospects use. If 75% of your candidates use mobile, but your application process isn’t optimised for mobile users, you’ll miss out on great candidates.

What can I do with that data?

Data is only as good as the insights you can draw from it. An ATS pays for itself when it goes beyond basic data tracking and into analysis of the key aspects of recruitment.

For example, an ATS should identify your true time to hire, from approving an opening to hiring a candidate. This data is crucial: if your time to hire is 2 months but your notice period is 4 weeks, you’ll be able to anticipate and plan for that gap.

You should also be able to break down your hiring costs into a recruitment cost ratio, which considers the cost of recruitment compared to the salary of that position. Rather than a simple cost-to-hire metric, this analysis shows whether your spending is proportionate with the level of each opening.

An ATS with that next level of data insight can also help you identify unnecessary costs. If 40% of your candidates come from one source, but you hire zero candidates from that source, you could potentially eliminate any ad spend there. A basic data tracker won’t catch that lost money if it never probes deeper than overall volume of candidates.

Does the ATS come with expert support?

On its own, an ATS is a tool: incredibly useful, but you have to know how to use it. You get the most bang for your buck when your ATS is backed by expert advisors.

If your ATS tells you that your recruitment process is too slow or expensive, but doesn’t tell you what changes you need to make, you’ll see limited ROI. Webrecruit provides the expertise you need to make those changes and optimise your process.

Our experts can even run the program for you until you’ve gained enough experience to use it to its fullest. When you decide to invest in an ATS, you should know that you’re getting all the benefits and functionality of that system, from transparent data to recruitment strategies and beyond.

Key takeaways

Any ATS will save you time and money compared to manual systems or costly agencies.

However, the true differentiators in ROI are the richness of data and depth of analysis provided by that ATS. Effective insights will help you identify and fix flaws in your process. The’ll also improve how you spend your money, so you can spend more where it works and less where it doesn’t.

To learn more, download our free eBook: How to Build a Business Case for Recruitment Software.

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