SmartRecruiters Blog

Making a Business Case for a New ATS: How to Show ROI

In a recent post about a webinar I hosted on making your best business case for a new ATS, I made it clear if you can’t show how your organization can add revenues or cut costs, you’re probably out of luck.

Your business case must make it clear that you can solve real business challenges and generate a significant ROI. Otherwise, other projects will be funded and you’ll be left with, well, that crummy old ATS.

How does this work in actual practice? Here are a few real-world examples to inspire you:

First, be sure your business case identifies business objectives, explains how current systems prevent meeting those goals, shows how obstacles can be overcome, and — most importantly — demonstrates a great ROI.

Making an employer brand shine: $1.6 million at stake

One objective might be to improve your candidate experience. At one company, it was awful —  with a poor mobile experience and no integration with social media. It took 14 clicks to just apply for a job (after creating a separate account!)

That turned off plenty of talented candidates who felt that any company that required yet another username and password was, well, on its way the corporate graveyard to put it mildly.

So the requirements included ditching all of those cumbersome processes to deliver a more engaging experience.

With approximately 100,000 applicants per year, third-party research showed that roughly 50 percent of candidates (about 50,000) were also either customers or prospective.

Data also showed that 50 percent of applicants felt they had a poor candidate experience, representing approximately 25,000 potential or existing customers – and that 32 percent of those (about 8,000) were likely to disengage from the brand.

So the ROI was based on retaining revenues by improving the candidate experience.  Research revealed that average annual revenue per customer was $200, so delivering a poor candidate experience could easily result in up to $1.6 million in lost revenues from 8,000 lost customers.

Keeping that revenue? A pretty significant ROI for taking action on a new ATS that could easily meet the requirement for delivering an engaging candidate experience.

New solution saves $400,000

In another case, a rapidly growing company needed to boost recruiter productivity to meet soaring demand for talent.

The current systems weren’t used by hiring teams because processes were cumbersome and too much effort was required to enter data manually. Other processes, such as approvals and interview scheduling weren’t even integrated into the system, resulting in even more needless effort and time. Hiring managers simply don’t use an ATS if it isn’t intuitive and easy to use.

So when defining requirements, the business case for a new ATS included delighting hiring teams with more intuitive and useful tools to integrate scheduling, approvals, and other functionality into a seamless experience that could boost hiring productivity.

The essential of making the business case – the potential ROI – showed great promise.

Research revealed that about 40 percent of a recruiter’s time was spent on administrative and data entry tasks. With 20 recruiters and an average salary of $100,000 ($2 million total), that time amounted to $800,000.

The research also showed that deployment of a more modern talent acquisition suite would cut that administrative time in half – equaling $400,000 or the equivalent of four full-time recruiters!

It’s all about the money

Remember, getting approval for a new ATS requires ROI. Show key executives the money. When you frame your business case that way, you’re far more likely get your request approved.

Learn more in our webinar on best practices for building a business case for a new ATS.

Mike Johnson

Mike Johnson

Mike Johnson is the Chief Sales Officer for SmartRecruiters.

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