How is a Talent CRM Different from My Applicant Tracking System (ATS)?

It’s a refrain our sales team often hears at Gem: “But I already have an ATS; why do I need a CRM?” It’s a great question... and one we enjoy answering.

It’s a refrain our sales team often hears at Gem: “But I already have an ATS; why do I need a CRM?” It’s a great question, and one we enjoy answering. After all, there’s enough overlap between the best CRMs and the ATS that we understand where the confusion—and even the suspicion—lies. It also doesn’t help that many ATS vendors claim their solutions already have CRM functionality… though they typically don’t. So how is a CRM different from an ATS? Here’s where we weigh in on the distinction:

Rather than thinking of the CRM as supporting top-of-funnel workflows and the ATS as supporting bottom-of-funnel workflows, it’s better to distinguish them in terms of whose data they hold and what kind of recruiting mentalities they support. Applicant tracking systems are for applicants: active talent that’s taken the decisive step of formally signaling they want to work for you. They serve as central hubs for organizing job postings, processing resumes, scheduling interviews, tracking applicants as they move through process, and managing onboarding once they’re hired. They’re terrific solutions for organizations that post jobs and receive high volumes of resumes. In short, the ATS is built around job vacancies and supports reactive hiring. But until talent applies, there’s no place for them in an ATS. If you’re sourcing passive talent and you only have an ATS, you have nowhere to store that prospect data.
‍CRMs, on the other hand, support proactive hiring. They’re the ecosystem and source of truth not just for applicants, but also for prospective candidates: former silver medalists, talent you’ve met at professional events and who you think would be a good fit for your company, referrals from current employees, folks you’ve come across on LinkedIn that you’d like to nurture relationships with for the next time that role opens.

In other words, if your hiring model is still the old-school “post-and-pray” model, your ATS alone should suffice—you’re just likely to run into trouble when you’ve got an opening that has to be immediately filled, and you have no talent pipeline to draw from. But if you’re building a modern recruiting machine—in which sourcers seek out top talent, build talent pools, nurture those prospects, and enhance the end-to-end candidate experience—then a CRM is a crucial add to your recruiting tech stack.

• Over one-third of TA professionals reported a decrease in applicant quality across the board last year (2019).

• HR managers report that 42% of resumes they receive are from candidates who don’t meet the role’s requirements.

• 70% of the global workforce are passive candidates—which means that when you post a job, you’re only tapping into 30% of the workforce (many of whom who will apply despite being underqualified).

• 86% of the most qualified candidates for your open roles are already employed and not actively seeking a new job.

• 90% of global professionals are open to new opportunities, even if they aren’t actively looking for work.

• The majority of people who took a new job in 2019 weren’t searching for one: Somebody reached out and found them.

• Sourcing improves quality of hire, reduces time to hire and cost per hire, and improves workforce diversity.

Classic ATS solutions quickly reach their limits on a number of fronts. They keep you dependent on data that candidates input themselves, rather than on information you discover about them. They don’t allow visibility into whether prospective candidates are active or engaged, since they force you to gauge interest through formal interaction. They don’t let you track respondents or attendees to events so you can nurture those relationships over time. And if you have evergreen or hard-to-fill roles—like engineering or leadership—for which you’re not exactly seeing a deluge of applications, your ATS isn’t going to help you there, either. You need a solution that will set the recruiting team up for proactive outreach, so they can build a pipeline of passive, vetted talent.

Don’t get us wrong, we love Applicant Tracking Systems at Gem—we integrate with them! But they aren’t a substitute for a good recruitment CRM. A CRM facilitates the entire recruitment process from the very top of the funnel while enhancing the candidate experience through relationship-building and personalization. It does so with infinitely greater efficiency and organization than if you were trying to manage those relationships manually. And it gives you data about your processes so that recruiters, hiring managers, and talent ops can make better decisions, and sourcers and recruiters can dedicate more time to the tasks that matter most: establishing and maintaining relationships with passive talent, so they can fill those requisitions.