Cut & Polish

Recruitment CRM or ATS: which one do you really need?

Over the past few decades, the U.S. has seen—and continues to see—unprecedented competition for workers. Even in the face of economic fluctuations, it’s estimated that there are roughly 1.7 open jobs for every unemployed person in the United States, which means competition for talent is still more competitive than it was before the pandemic. 

To compete in this tight labor market, talent acquisition (TA) teams are hungry for new ways of optimizing their processes and attracting top talent to their organizations. But the world of TA tech can be a bit confusing with so many recruiting acronyms being thrown around these days—ATS, CRM, HRIS, FOMO, ASAP (ok, maybe not those last two, but you get the idea). However, behind these acronyms lies real value that can make a world of difference for your talent acquisition team. 

In this article, we take a deep dive into two essential technologies: the applicant tracking system (ATS) and the candidate relationship management (CRM) platform. We’ll look at each one individually and then see how they can work together to become the foundation of your recruitment tech stack to drive better hiring processes, improve candidate experience, and ultimately bring more high-quality candidates into your organization. 

ATS vs. CRM: What’s the difference?

TL;DR: A CRM brings in candidates, and an ATS helps you hire them.

ATS and CRM hiring funnel

Applicant tracking system

An applicant tracking system is precisely what it sounds like—a tracking system for applicants (people who have actively raised their hands and signaled they want to work for your organization by filling out an application or agreeing to have a phone screen with a sourcer). An ATS serves as a management hub for things like: 

  • Organizing job postings 
  • Processing resumes
  • Scheduling interviews 
  • Tracking applicants as they move through the hiring process
  • Managing onboarding once a hire has been made

Candidate relationship management 

A candidate relationship management platform, again, is exactly what it sounds like—a relationship-building tool used to generate interest in your organization, bring candidates into your hiring process, and build databases of qualified candidates for future positions. A recruitment CRM enables you to:

  • Automate prospect outreach
  • Build interested talent pools
  • Strategically source high-quality candidates
  • Nurture prospective candidates 
  • Maintain relationships with past employees
  • Gather insights about your hiring process

Which is better, an ATS or CRM? 

The short answer here is neither—they have vastly different functions, so it just depends on what you’re trying to do.

ATS and CRM recruiting activities

An ATS helps automate and manage a lot of the logistics of the hiring process and is essential for managing every candidate in your funnel (something we can all agree that we need). An ATS can parse and prioritize resumes, send automated rejection letters, track notes for each applicant, send follow-up reminders, and more—and they’re great at what they do.

However, ATSs are built around active candidates and reactive hiring—they only capture information about candidates who have applied. The application-to-offer stages only account for about 20% of the hiring process. The other 80% takes place before the candidate applies for the job (i.e., before they enter an ATS). This includes all the work that goes into sourcing, recruitment marketing, relationship building, nurturing, and more. 

Unfortunately, all touchpoints and engagement a candidate had before they applied are not visible in an ATS. In addition, potential candidates that show interest in your organization but don’t apply, drop out of your hiring process, or move on from your organization are essentially lost (or end up in a disjointed spreadsheet if you’re lucky).

A recruitment CRM platform enables your TA team to take a more proactive approach to talent acquisition. Instead of posting a job description on traditional outlets and waiting for the perfect candidate to apply on their own, a CRM gives your sourcers and recruiters the tools they need to proactively reach out to candidates that would be a great fit.   

In addition, using a recruitment CRM opens up the talent pool for passive candidates, which is MUCH larger than the talent pool of active candidates. A recent survey by Greenhouse found that of their respondents:

  • 26% were actively (and urgently) looking for a new job
  • 28% were looking for a new job within the next six months
  • 30% were not actively looking but were open to a new role in the next six months
  • 16% were not open to a new role in the next six months.

That's essentially 84% of talent that are either actively or passively open to a new position. However, even among the groups that are actively looking, there’s no guarantee they will stumble across your careers page. Having a passive talent sourcing strategy in place will not only allow you to tap into passive candidate pools while ensuring your organization rises to the top of active job-seekers lists as well.  

We also know that recruiting is all about playing the long game. Building a relationship with a candidate doesn’t end once they apply to a role or agree to an interview. You can use your CRM to employ the same strategies your team used to bring candidates into the funnel throughout the hiring process to improve their experience, build loyalty, decrease dropouts, and more. Recruitment CRMs play a critical role in maintaining and strengthening candidate relationships by ensuring candidates receive a positive interview experience, prompt follow-up, and good communication throughout the process. In a competitive job market, this is key to ensuring that quality candidates enter and pass through your hiring funnel. 

Finally, candidates may be a little bit more hesitant to change jobs compared to previous quarters. Given the unpredictability of the current market, candidates may not be as open to leaving comfortable jobs and starting as the newest employee at a new company for fears that they will be the most expendable should a major downturn arise, also known as the “last in, first out” rule. For talent that may not be ready to make the leap from one company to another, a recruitment CRM allows you to build and maintain meaningful relationships with those individuals so that when they are in the market for a new opportunity, your organization is top of mind. Your CRM should be the first place you go when you need to find quality talent (as opposed to starting from scratch with cold outreach or spending budget on job posts, LinkedIn credits, etc.).

Does company size matter?

Here again, the short answer is no—companies of all sizes need both an ATS and a CRM, but they may have slightly different uses for each platform. 

Large enterprise organizations (think household names like Amazon, Facebook, Tesla, etc.) may be less focused on bringing in passive candidates as they tend to have high volumes of applications for every open role. These companies may focus more heavily on an ATS for filling entry-level roles and use a CRM to bring in candidates for higher-level, more competitive, or hard-to-fill roles. They can also use a CRM for things like meeting diversity and inclusion hiring goals that would otherwise go unmet.  

However, these companies represent a tiny percentage of employers out there. The vast majority of organizations generally don’t see hundreds of inbound applications for every open position. Many small, medium, and even large companies need a recruitment CRM to build out strong pipelines and use an ATS more for the logistics of moving candidates through the process. 

In addition, companies of all sizes that spend time and money finding candidates and bringing them into the hiring funnel can use a CRM to maintain relationships with these folks throughout the process, so they don’t lose out on the talent they’ve worked so hard to secure.

Which should you choose?

In an ideal world, both. You can use a CRM to fill your hiring pipeline with high-quality candidates and an ATS to manage the logistics of the hiring process once candidates have applied. 

If you already have an ATS that suits your needs, great! Half of the equation is solved. Now you just need to find a recruitment CRM that fully integrates with your ATS, and you're all set (or vice versa if you already have a CRM). 

If you have neither, it’s not really a question of picking one or the other; it’s more about which one you should get first. Start with an ATS—preferably one that integrates well with your human resource information system (HRIS). This will ensure that logistically, you are able to get a candidate through an interview process, make an offer, and into payroll. Once you have the logistics in place, then bring in a CRM (like Gem) to ensure that you have a steady stream of high-quality candidates entering (and passing through) your hiring funnel. 

Is Gem a CRM or an ATS? 

At Gem, we hear this question a lot. We like to call ourselves a "Talent Engagement Platform," meaning we’re technically a recruitment CRM, but we’re also so much more. We do support all the functions of a CRM, but we also offer capabilities that extend far beyond the traditional definition.

Talent engagement platform explanation

Of course, Gem supports sourcing outreach and relationship-building, but we also act as a single source of truth for the entire talent acquisition function. Gem unifies data from the tools recruiters use every day, including email, your ATS, notes from phone screens, LinkedIn, and other social networks, to drive insight into all talent relationships and provide context about the activity and touchpoints for each candidate (all features you won’t find in a traditional CRM). 

Using these touchpoints, Gem provides a comprehensive profile for each prospect/candidate that captures their work experience, skills, and the entirety of the relationship history—from past outreach to notes, interviews, text messages, and ATS activity. This allows you to: 

Armed with insights about the entire recruiting process, your TA team can scale outreach and make more informed strategic hiring decisions. 

ATSs and CRMs may function completely differently, yet both support the same end goal—bringing high-quality candidates into your organization. Leveraging both an ATS and a CRM platform in your TA stack will lead to lower time and cost-to-hire, better passthrough rates, more offer-accepts, and peace of mind that all members of the TA team have the insights and tools to hit their hiring goals. Instead of looking at ATSs and CRMs as competing technologies, think of them as complementary platforms that will exponentially increase your team's effectiveness and allow you to take the critical next step in the shift from reactive to proactive hiring. 

If you’d like to learn more about how a Talent Engagement platform can help you build a sustainable and scalable recruiting strategy, check out our whitepaper:

5 Ways a Talent Engagement Platform Elevates the Recruiting Function

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Content Marketing Manager
October 5, 2022
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