The Power of Collaboration: A Lesson From New Zealand

Applicant tracking systems have been around since the early 1990s. Most large organizations have installed applicant tracking systems now, and most recruiters who have worked in large organizations have used one. The situation is much different for smaller organizations. Fewer than 10% of small organizations in the U.S. have an applicant tracking system. Smaller firms continue to handle resumes with manual systems or Excel spreadsheets and simple databases. The reasons are not hard to fathom if you look carefully at the situation. The first reason is cost. Most of the well-known applicant tracking systems cost several thousand dollars a month to license, and that comes after several thousand more for installation and customization. The second is simply that many organizations don’t do enough hiring in a month to even come close to recovering this cost in savings. There is a threshold of volume that has to be there consistently for an ATS to make sense. Finally, the level of complexity in choosing a system, and the effort and maintenance required to make them effective, strains even the staff of larger organizations. The obvious solution to these problems is to share resources. A single ATS, as used by large organizations, can handle the volume of several smaller ones. However, it also takes effort to get a group of organizations together to jointly purchase and maintain an ATS for the benefit of the entire group. And while costs are shared and labor is spread out, it requires someone willing to devote the time and energy to architect the arrangement. Some of the ATS vendors may eventually move into offering a shared system, but if it is available today I am not aware of it. I suppose that it would be an expensive proposition for an ATS vendor to try and put together and operate. At first, perhaps, it is better to let the solution come from the needs of the users and evolve from there. I am in New Zealand as I write this, speaking at the Human Resources Institute of New Zealand’s annual national conference. Over the years I have had the opportunity to frequently come here, work and speak, and have met a number of recruiters and HR professional. One person, in particular, has been visionary in how to leverage the power of an ATS. Andrew Norton, the General Manager of Human Resources for the New Zealand counties of Manukau and Waitemata District Health Boards, has been building a shared service model for recruiting here in New Zealand that holds promise for smaller organizations. He is supported by the local representative firm for the ATS, Haines Communication, and by the Hire.com ATS vendor itself. By all three of these groups working together, a new model for sharing services has emerged that is now growing. The health boards have created websites and brands that give them each the ability to be unique, while at the same time sharing a common ATS and talent pool. By doing this, they have decreased their recruiting costs by more than one million New Zealand dollars (approximately US$600,000) over the past year in reduced agency fees and advertising costs. They are also able to reach more candidates ó both within New Zealand and around the world ó than they ever could hoped to have reached using traditional print advertising and agency methods. They are creating a worldwide brand for healthcare and have successfully attracted U.S. and European health professionals to New Zealand. Andrew is now hoping that other heath boards within New Zealand (there are about 20 of these within the country) will join in partnership to even more widely share this ATS and talent pool. I had the opportunity to attend a few meetings and dinners with the leaders of these organizations and listen to their concerns. There are difficulties and objections, of course, to doing anything like this. I can imagine many of you, as well, are bringing up the same objections in your mind as you read this. Here are a few I have heard and my answers to them. Objection 1: Who controls the ATS? How can I be sure my interests are being protected? The first step in putting together a shared service model is to establish the rules and protocols of control upfront. This is being done with joint meetings, discussions, and, I imagine, the creation of a group of people who are given the right to make collective decisions about how the system will be used, modified, or enhanced. The time involved in this is mostly upfront. Once the working model is in place, it should take very little time to maintain. Anyone who has purchased and implemented their own ATS will agree that the amount of time spent in deciding the way the ATS should be configured, used, and customized takes lots of time, even if it’s within a single firm. The payoff here is much lower costs and shared operating resources. Objection 2: I really don’t think that a shared talent pool is a good idea. I want my own talent pool. Each user can have a private talent pool, at least for a while, when candidates are in the initial process of discovering an organization and applying. The idea is to let each health board, in this case, have their own website and identity. Only after there is the decision that there isn’t a good match with each other is that candidate put into the common pool. This means you can have your cake and eat it too. You can hire the candidates that meet your needs today, but you don’t lose the ones who you may want tomorrow. They simply become part of the common pool. Over time, a shared system such as this, especially in a vertical sector like healthcare, will be a repository of a huge amount of knowledge about candidates and available skills, and could be a powerful source of information for workforce planning. The problem is not about ownership. The real issue is working out the protocols and procedures for sharing. Objection 3: What happens if I am not happy with the results? No one is as locked into this type of arrangement. You would be more limited in choice if you purchased your own ATS. By sharing, you lessen the potential impact of changing direction. If a member is dissatisfied, they can leave at the end of some previously agreed-upon commitment period. It you purchase your own system, you have to live with it, even if you are dissatisfied with it. Objection 4: What about internal candidates? Internal candidates should have the same access to the jobs in the shared system as external people. There is no technical reason to limits their access, although unfortunately, many organizations want to do this. Organizations have to change their thinking about the rights of current employees to apply to potential new positions. But this should mean opportunity for both parties. In the end, when the dinners are over and people have had a chance to probe into the pros and cons of sharing, many are moving toward becoming a part of this experiment. I think there is great potential in this model to give smaller companies the reach of larger ones, as well as access to potential candidates worldwide at a lower cost than they can today. I hope to see some of these collaborative arrangements start to happen in the U.S. and other pats of the world. Best of luck to all of you in New Zealand, and thanks for pioneering a thoughtful and creative solution.