Applicant tracking system (ATS) is a curious name for the software that powers most recruiting functions in Fortune 500 organizations and in many smaller ones as well. One would assume that recruiters and hiring managers would want a tool that assisted them in discovering the right person for a position ó not a tool that just tracked applicants. The name is reflective, though, of what these tools are designed to do. Their primarily purpose is to store resumes, retrieve them through search engines based on keywords, and track a candidate’s progress through telephone screens, interviews, and either an offer or a rejection. In fact, all the most popular applicant tracking systems are designed around the philosophy that the resume is central to recruiting. These systems enable the resume to be stored, retrieved, and matched against a requisition. They are not based on tracking relationships or people unless those people are “attached” to a particular requisition. This means that there is usually no way to gather and retrieve information about people who have not expressed interest in a specific job. There are a few systems, however, that are based on another and more useful philosophy ó that people and relationships are central to recruiting. These systems help recruiters develop and build relationships with people and develop talent communities. Most of the confusion recruiters have about applicant tracking systems is caused by not clearly understanding or appreciating the difference between these two philosophies. The agency world has been using tools that are more aligned to the relationship philosophy for some time now. They use applicant tracking systems that are designed to facilitate relationships, store contact information, and regularly communicate with candidates. These systems include Bullhorn and Prohire (which is built and sold by Recruitmax). The corporate recruiting world has focused almost exclusively on ATS-centered around tracking resumes. The applicant tracking systems most commonly used include Taleo, Webhire, Recruitmax, and Brassring. Some of them can do rudimentary relationship and talent community building, but their strength is around administrative and database functions. These relationship functions have been added on later and are not as seamlessly part of the product as they should be. Corporate recruiters who want to develop talent communities and build relationships are limited right now to a handful of systems. These include Hire.com and Yahoo! HotJobs’ HotHire (developed as a replacement for Resumix by Yahoo! Hotjobs) ó both products built more on the candidate relationship philosophy. Otherwise, corporate recruiters resort to contact management software such as ACT. Contact management software allows recruiters to store vital information about potentially interesting candidates, such as telephone and email data, as well as personal notes about the potential candidate. These systems also store resumes and track them against requisitions, but they are much better at candidate communication, scheduling appointments, reminding recruiters about specific people, and developing talent communities. They often provide candidates with tools to self-manage their relationship with the organization, such as updating their personal information when it changes or even removing themselves from the system when they are no longer interested. The history of how these systems evolved is fascinating and rich enough for several columns. But the core part of the story is that human resources functions are administrative and look for tools that help them store, track, codify and report data. Historically, HR and corporate recruiting had little interest in relationships or in “selling” jobs or people, and more interest in process and the ability to meet legal challenges. The agency world, on the other hand, has been built on relationship development and candidate communication. Recruiters who move from agencies to corporate roles are often surprised to find that they do not have the same tools. Many ex-agency recruiters feel handicapped in the corporate environment because of these differences in philosophy and tools. Agencies make their profits from quickly and efficiently putting good candidates in front of hiring managers. They often do not bother with resume storage, and instead keep track of potential candidate’s contact information and some notes about the candidate to help in their communication and to jog their memory about the candidate. When a need arises, they search through their notes and past communications to potential candidates and, when they find a potential fit, they call the person up, re-establish contact, and request a resume. This is slowly becoming the model corporate recruiters are using. It has many benefits. First of all, this philosophy changes the way recruiters source candidates. Rather than look for the perfect candidate who fits an exact need, they store information on a wide variety of people who may be a fit for some future position. As needs arise, they scan their contact lists, make phone calls and find or are led to an appropriate candidate very quickly. Often by using their persuasive powers, they influence hiring managers to consider candidates who otherwise might have been passed over because they were not exact matches to a requisition. This, in turn, reduces the time to present candidates. In fact, relationship-focused recruiters can often present a candidate in a few hours, rather than in a few days, which is more common. Time to present is becoming a measure of recruiter quality because it speaks to the recruiter’s ability to anticipate hiring managers’ needs and to have candidates ready. Unfortunately, most corporate recruiters spend lots of time looking at resumes of people who are unlikely to ever be hired and storing them. They do this to be legally compliant, to meet EEO guidelines, or just because the ATS requires that it be done that way. Corporate recruiters should learn from the agency model. Hiring managers go outside to agencies because they know they will quickly get appropriate candidates with little need for them to provide a lot of detail. Agencies can do this because they focus on understanding what needs the business has and which competencies will help meet those needs. Then they start to contact the people in their talent communities who have similar competencies. Within a few days, their contacts lead them to the best candidates. They rarely search resume databases or try to match requisitions to resumes. This is a futile effort for the most part, because hiring managers are never sure of exactly what they want and expect to be influenced by candidates and recruiters. In rare cases, hiring managers can even be delighted by the caliber of a candidate they did not expect to see. Matching humans to jobs requires flexibility ó something databases are by design not equipped to provide. A well-executed recruiting model assumes that matches are inexact and that candidates who meet the critical requirements but lack other requirements may be the preferred choice. Tools that provide flexibility in data entry, allow networking and candidate communication, and allow recruiters to make “fuzzy” matches to candidates will emerge as the winners in the overcrowded ATS marketplace.