Does SmartRecruiters Funding Point to the Future of the ATS?

Recruiting does not need to be difficult. But, in most cases, it is.

According to Aberdeen’s 2011 Talent Acquisition Lifecycle report, even the most sophisticated recruiting departments face numerous pressures including increased competition for top talent (52 percent), shortage of key skills (49 percent), and ability to meet company’s goals (49 percent).

Despite a growing talent pool, organizations still struggle to find the right fit. As a result, talent acquisition departments are reconsidering current strategies and technology options in order to create more efficiencies and a positive candidate experience.

The iTunes for recruiting?

As organizations reevaluate talent technology, one option gaining momentum is SmartRecruiters. Founded by recruiting expert Jerome Ternynck, SmartRecruiters disrupted the recruiting market by offering the first free ATS (applicant tracking system).

Leveraging a cloud platform, customers are able to improve the recruiting experience by purchasing third-party recruiting services – everything from job posting to RPO to video interviewing. Think iTunes for recruiting.

Although skeptics have questioned the viability of SmartRecruiters, $5 million in Series A financing announced this week speaks to the belief in its staying power. Not to mention the 10,000 customer currently using the product. This customer growth and recent funding for a free ATS highlights two rising trends in talent technology:

1. Consumerization of Enterprise Software

The rise of consumerization – consumer applications and solutions in a corporate environment — is hard to deny. Employees that have grown accustomed to a simple, modern user experience in consumer applications now expect the same from business applications.

Recruiting and talent management is no exception. Just take Salesforce’s acquisition of Rypple as one example. The concept behind consumerization is to start with the individual, create an engaging experience, and then grow to the organization. This focus on the individual versus the corporation is a risky yet powerful way to provide recruitment technology. It offers a very different model to traditional recruitment options and a commitment to innovation.

The same Aberdeen study cited above found “building a culture of innovation” to be a strategic action for organizations striving to achieve recruiting excellence. Unsurprisingly, they are looking for technology providers to help them reach that goal.

2. New Tools for Job Seekers

In the past, few providers have offered solutions for job seekers since it was difficult to justify a business model. Several traditional providers are offering “communities” for individuals to share ideas but there is currently a gap in the solutions available to job candidates instead of organizations. With 23 million Americans looking for jobs, SmartRecruiters is taking advantage of this opportunity to fill this gap and provide a more engaging experience between recruiter and job seeker through a social platform. The social aspect of SmartRecruiters helps to bring recruiting back to its foundation- relationships.

The growth of SmartRecruiters indicates several trends in recruitment technology including consumerization of enterprise software and new tools for job seekers- trends that may eventually extend into the traditional ATS market. Although still in the early stages, future success for SmartRecruiters will come from its ability to continuously innovate its business model, user experience and go-to-market strategy.

Only time will tell if this new model for recruitment technology will outlast and outperform our current model.