Why applicant tracking systems are broken by design
5 days ago
- #Recruiting
- #HR Tech
- #ATS
- Applicant Tracking Systems (ATS) are structurally broken due to misaligned incentives, lazy buyers, and a lack of competition based on product quality.
- HR technology suffers from a talent problem, with great designers and engineers avoiding the field, leading to poor interfaces and workflows.
- Compliance requirements, like NYC's Local Law 144, serve as moats protecting industry leaders rather than driving innovation.
- The dysfunction in HR technology is exacerbated by the disconnect between buyers (executives) and users (recruiters), with HR being seen as a cost center.
- Founders face a trap: build something recruiters love that executives won't buy, or win enterprise deals with subpar products.
- The market is misaligned, with many ATS products existing purely to exploit Workday-locked enterprises, adding complexity without solving core issues.
- A better product alone isn't enough to win in the ATS market due to entrenched economics and apathy, requiring a 10x improvement to overcome.
- Building a production ATS requires careful data modeling, architectural decisions, and system design to avoid compounding issues.
- Jobs in an ATS should be structured with a 3D architecture: parent jobs, child postings, and optional openings for maximum flexibility.
- Candidate records should be designed to handle duplicates and temporal audits, with clear primary identifiers and snapshots of application data.
- The incumbents in the ATS market are protected by dysfunction, but AI and lower build costs present opportunities for disruption.