ATS or VMS: What is the best solution?

An organisation looking to professionalise its recruitment or staffing process will inevitably run into this question. How to make the right choice?

ATS or VMS

Good question!

An organisation looking to professionalise its recruitment or staffing process will inevitably run into this question. If you are not familiar with HR tooling, it is difficult to get a clear-cut answer. That is not strange at all, as even experts in tooling have a hard time explaining the difference. This is because the answer depends on the needs of the organisation. This blog aims to serve as a starting point. Consider the following: What is your goal and which process do you aim to professionalise? We will discuss the differences between both solutions, as well as their overlapping areas. Finally, a guideline to make the right decision is provided.

What goal do you wish to accomplish? Which processes do you aim to professionalise?

Applicant Tracking Systems (ATS) and Vendor Management Systems (VMS) are both labelled as ‘recruitment tools’, but serve different purposes. Central to an ATS is the relationship between an organisation and the candidate, whereas a VMS is about the relationship between an organisation and its staffing provider.

The purpose of an ATS

An ATS is chiefly used by organisations that want more control over the recruitment process for permanent staff. It allows them to maintain an overview of ongoing application procedures and makes it possible to log contact moments with candidates.

HR service providers (such as those providing secondment of professionals) in particular also use an ATS to gain more control over the recruitment process, but they want to be able to manage the request and matching processes with clients, as well as the option to schedule contact moments with these clients. Customer Relationship Management (CRM) functionality can be an integral part of an ATS to fulfil this need.

The purpose of a VMS

A VMS is used to gain more control over the hiring process of flexible staff. This process is the responsibility of a central department within an organisation. They use a VMS as a tool to optimize their service. In this way, they ensure efficiency and clarity in the application procedure, from the hiring manager to the suppliers’ offer process. When contracting flexible staff, they also want to adhere to law and legislation, as well as to any internal compliance rules. Time registration and invoicing, which were traditionally performed manually using various systems and paper flows, can be implemented in a VMS as well.   

The hiring process may also be outsourced. HR service providers that manage this process for you are called Master Service Providers (MSP). If the external party supplies personnel as well, it is called a ‘Master Vendor’. They will also use a VMS when providing their services. Otherwise, it would be impossible to guarantee transparency and measurability to all the parties involved in the entire process.

In which areas do ATS and VMS overlap?

There is a grey area in which both solutions offer functionality. Both are able to publish vacancies on career websites and job boards, and both have portals for (hiring) managers and/or suppliers. Due to these similarities, one system is sometimes used to accomplish the goal for which the other was developed. It may suffice, but is not optimal — and certainly not sustainable. You will soon come to the realisation that the tool lacks functionality for a core process.

What is the best solution?

The best solution for you depends on your goal and the processes for which you intend to use it. Note that a tool in itself is not the solution to any problem. It plays a supporting role in the service you want to provide with your department or company. Neither can function without the other.

Additionally, a service has to be viewed within a certain context. It has, for example, been preceded by a decision regarding insourcing or outsourcing, it has to solve a concrete problem, or it is related to a specific goal set by an organisation.

To choose the right tool, you will first need to form an image of the service in its proper context. After that, the service can be made more concrete by dividing it into processes. These serve as the measuring rod for tools. To what extent does a tool support the intended processes and help you reach your goals?

This is by no means an easy task, and outcomes may vary greatly. In practice, there is a mix of insourcing and outsourcing of recruitment and staffing services, which are sometimes split between professionals and temporary workers, and other times divided per job category. The same goes for tooling. We see off-the-shelf ATS and VMS, tailored solutions, and combinations of these. Make sure you choose a service model that is a strategic fit and invest in a matching future-proof tooling landscape.

Fortunately, you are not the first person who has had to make this decision. It is wise to seek external advice for such a complex matter. There are consultancies that can aid you with this, but you could also consider scheduling a reference visit with an organisation similar to yours. It is also advisable to ask potential HR service providers and tooling providers if they think they are able to offer something that fits your ambitions. In this way, you will know if a service or product is a match, allowing you to make a well-informed decision later on in the process.

Written by: Narada Bouwland (Linkedin)

Narada is a solution architect at Nétive VMS B.V.. At Nétive he utilises his experience in providing professionals and his experience in IT consultancy to help organisations detect and solve staffing problems.