chapter three

ERP Systems =1 Vendor. 1 Solution. Multiple Headaches.

Despite evidence to the contrary, many organizations still opt for the recruiting module offered by their HRIS or ERP vendor, convincing themselves “it’s good enough” and can “still processes a hire.” They also may remember the integration headaches of the past where legacy, stand-alone applicant tracking systems were nightmares to manage and just want to avoid going that route again. Often times, these ERP recruiting modules are “thrown-in” for free as part of expansive enterprise license agreements. So why not go this route? It’s free to low cost, likely integrates seamlessly as it’s from the same vendor, and the demo appeared to showcase basic features that meet recruiting needs. This “One Vendor – One Solution” promise evangelized by the ERP vendors is obviously enticing.

However, in today’s volatile market, “good enough” isn’t going to cut it, especially with workforce shortages rising, businesses requiring social and mobile, and talent wanting to be treated like humans. Sadly, and all too often, companies only realize this after going all-in on the ERP promise, bestowing on their hiring teams a lousy module premised on an outdated approach to recruiting. Below is an online response from a somewhat despondent recruiting team reliant on an ERP vendor’s recruiting solution:

* Capterra

Interestingly, this feedback isn’t all that uncommon, and is well-documented from hiring teams who use their ERP system for recruiting. In retrospect, however, it isn’t surprising at all that ERP systems are only great investments for post-hire processes like compensation, performance, and payroll — in other words, those functions ERPs were originally designed for and which represent the lion’s share of an ERP vendors revenue. Recruiting, however, is less like an infrequently-used back office process and more of a front-office marketing and sales discipline that requires high degrees of interaction between candidates and hiring teams. There are multiple reasons why settling for an ERP vendors’ “good enough” approach to recruitment will hold companies back. The three primary reasons outlined below, and that should be investigated deeply during the selection process, are ERP systems’ lack of deep recruiting functionality, their poor user experience both hiring teams and candidates reject, and, ironically, their creation of more integrations instead of fewer, as advertised.

Functionally Incomplete for the Foreseeable Future

As is the case for most of these systems, their recruiting modules were designed or acquired as a hasty response to customer demand for a “One Vendor – One Solution approach.” Development resources for ERP systems are stretched across a number of different products, and recruiting generally gets shorted because it’s not a primary function nor a primary revenue source for ERP Vendors. It’s worth asking the question how much development work is realistically going to be devoted to a product that’s often given away for free? This explains why vendors like SAP scrapped the recruiting module of their on-premise solution — it simply can’t keep up.

ERP systems offer the most basic recruiting functionality in their modules, namely a variation of applicant tracking and onboarding, complemented by some analytic capability. Worse, some ERP recruiting modules were bought rather than built and reflect their legacy age poorly as they were architected during a time before mobile and social existed. In general, ERP recruiting modules offer far too little functionality to recruit strategically with CRM and recruitment marketing being the most glaring missing capabilities. ERP recruiting modules are like dinosaurs – virtually extinct from a value-add standpoint out of the gate and unlikely to ever catch up to the offerings from talent acquisition suites.

In contrast, talent acquisition suite vendors offer comprehensive functions out of the gate and have their entire R&D teams solely focused on improving and extending their talent acquisition offerings.

User Experience - An Afterthought

Equally lackluster is the ERP user experience. ERP systems are fundamentally designed to complete transactions, not for the consumer-facing tasks and conversational interactions recruiting demands. As such, their modules are plagued by excessive click-throughs and unnecessary process steps that create a terrible experience for hiring teams who may simply reject using the system. Today, recruiting teams need to move fast, but even something as simple as workflow configurability can take days in these systems, often requiring vendor support to complete. In addition, ERP recruiting modules create unwanted complexity for the simplest of tasks — like moving a candidate between hiring process steps or finding and locating a candidate in the database. As these simple tasks add up, the entire user experience becomes a major productivity suck for recruiters who are already hard-pressed for time. Strategic hiring requires tools that make hiring teams’ job quick and easy because top talent doesn’t wait around in today’s market. ERP systems are less than ideal choices for recruiters because their complexity hampers efficiency in a massive way and, usually, most of the recruiting activity happens off system which leads to major holes for compliance and performance analytics.

ERP systems deliver an equally (if not) poorer experience for job seekers because these systems were not initially designed as consumer-facing software. Recruiting modules of ERPs were first introduced when many industries were recovering from recession conditions, when talent was abundantly available because employment options were few and far between. So, candidate attraction and retention were non-issues. Today, the talent landscape is drastically different and increasingly mobile, yet these systems haven’t changed all that much. While some ERP vendors have made nominal improvements and updates to their recruitment modules, many still lack recruitment marketing tools, offer few branding elements, and do little to advance candidate engagement. Without these tools at a hiring team’s disposal, the candidate experience is virtually non-existent, meaning organizations who rely on their ERP systems for recruiting will have a difficult time standing out in a competitive talentscape.

Integrations - Not One, But Many

Many buyers are mistakenly motivated by ERP vendors’ illusory promise of “One Vendor – One Solution,” erroneously translated to mean more functionality with far less cost and complexity and fewer integrations to establish and manage. Consequently, companies who purchase ERP systems are surprised to learn the “more” actually means more integrations, more applications to manage, and more resources to fill in functional gaps so hiring teams can effectively attract, engage and convert job seekers to hires. Thus, the “One Vendor – One Solution” mantra is actually a misnomer that misleads buyers into believing ERP systems are superior options to standalone recruiting technology, when the reality is not super rosey.

These are the typical integration surprises that buyers of ERP recruiting solutions discover and, as a result, nobody is surprised that more than 60% of companies using an ERP system today for recruiting seek a change.

1. The Filling of Functional Gaps: ERP systems offer the most basic recruitment functionality, offering some variation of applicant tracking, onboarding, and analytics. As such, many organizations are forced to purchase separate recruiting point solutions to fill gaps that are too large to ignore – often in the candidate-facing CRM, recruitment marketing, and referrals arenas. In addition to the large incremental costs (both for the software and the integration work), this solution of stitching together these core components creates a disjointed process for candidates and a nightmare for viewing holistic recruiting performance analytics.

2. Incorporating Recruitment Services Vendors: Recruiting doesn’t happen in a bubble – a traditional and compliant recruiting process relies on external services from job advertising partners, assessment vendors, reference check services and background check providers. Unlike leading talent acquisition suites, ERP systems usually do not offer a large set of deeply pre-integrated recruiting vendors. Unless organizations are willing to do manual “swivelchair-like” work across systems, they must build integrations (often point-to-point) between their ERP solution and these many vendors.

3. Integrating to Core HRIS Functions: This issue irks buyers the most. Many ERP vendors’ HRIS stack is comprised of a mix of organically built and acquired capabilities, which often run on different underlying technology stacks and data-models. Which means – quite simply – they don’t integrate well together. This translates into some lengthy unexpected integration discussions and development to make the ERP recruiting modules work seamlessly with the core HRIS system. Unfortunately, this work is often not budgeted (nor expected) by the buyer and so it doesn’t happen — leading to an onerous amount of manual effort, data deduplication, and upstream and downstream process breakdowns.

Avoid The Comparison Trap

The “One Vendor – One Solution” promise falls apart when ERP systems are used for recruiting. The limitations of their recruiting modules create obstacles for hiring teams and headaches for IT. It’s therefore important to avoid the ‘comparison trap’ which all to often leads buyers to make ill-informed purchases. For example, many buyers mistakenly believe the purchase decision centers on an either/or comparision. Either we purchase one system that provides us “everything” we need (One Vendor – One Solution), or we end up purchasing two systems (1 HR system and 1 Recruiting system), which equates to increased costs, longer implementations, and increased risks. This is a false trade-off – recruiting is a strategic practice that demands its own system. Moreover, it is simply not true that picking a standalone recruiting system leads to more integration work and costs. This is a fallacy (and sales tactic) sold by ERP Vendors, when, in fact, ERP systems are not recruiting solutions. Moreover, fewer than 30% of organizations would recommend their ERP solution as a substitute for a recruiting suite. In short, they’re not comparable systems because they were designed for different purposes. An ERP system is not a recruiting solution. So, before falling into the comparison trap when evaluating solutions, buyers should first consider the problem they’re actually trying to solve. If you’re trying to hire the best talent possible to compete in today’s market, you need a talent acquisition suite. Full stop.