SaaS, aka software-as-a-service, has to rank as one of the ugliest acronyms that the IT world has come up with but is impossible to ignore for anyone reviewing their recruitment software options.

Put simply, SaaS allows users to rent their software typically on a per user, per monthly basis. The ability to scale up and down user-wise has enabled those recruiters who’ve taken this approach to reduce costs during the recession while at the same time ensure they are well positioned to take advantage of the benefits on web-based, on-demand software when the good times return. Using a SaaS model, the software typically resides on a supplier’s server and is accessed via a standard web browser. Suppliers regularly upgrade the software — usually four to six times a year, along with any necessary minor tweaks and bug fixes — and this is included in the price. It means that recruiters can minimise their hardware infrastructure and don’t have to worry about maintenance or the hidden costs and hassle that can be associated with traditional client/server software.

The model has more than a ring of familiarity about it since it is uncannily like the ASP dotcom era but with some significant differences,
such as the pricing model.

“With an ASP model, we’ll say to the client, it will cost X pounds per month and we’re going to lock you into a three year contract and offer you all the other services associated with that model,” says Daniel Richardson, chief technology officer (CTO) of Bond International, whose Adapt recruitment software is available in a number of different models, including SaaS. “When clients typically talk about a SaaS model, they’re talking about a very similar thing, however, they don’t want to be locked into a contract. They may even say they want to start using it at the end of July until the end of August as they’ve got a very quick ad campaign they need to service.”

While clearly SaaS has its roots in the ASP model, some vendors are keen to point out that it is far more than a reinvention of an old term. Chris Bogh, technical director of recruitment software company eploy, says its entire company is built on the SaaS ethos of rental software and one of the benefits of this to the client is that as a supplier it can never rest on its laurels.

“Our standard contract is 30 days so it’s very much in our interest to make sure that clients are always using our software and are happy with it,” he says. “It means you build a very strong relationship with clients as in some cases we’re effectively their IT department.”

Bogh adds that because the software is hosted rather than loaded locally, they can see precisely how clients are using the software and be reactive to their needs. “How they use it will often trigger future development,” he says.

Similarly, Bullhorn, a US-based SaaS provider, which entered the market earlier this year, has built its recruitment software entirely on recruiters’ input and constantly monitors usage. “We’re on version 66 of our software and we issue four quarterly upgrades,” says Peter Linas, UK sales manager of Bullhorn, who says the average users notches up 850-1,000 clicks per day when using the software.

He adds that not everyone who says they can provide a SaaS solution is a true SaaS vendor. “There are some who will provide web-enabled software but they’ll create a remote system to log on to via the internet rather than directly on to a web-based application,” he says. The user, in fact, would not be aware of any difference unless it was pointed out by the supplier. In an increasingly payas- you-go world, it is hard to see how the traditional client/server software model will be able to compete with this far more agile and flexible approach of SaaS. Traditional obstacles to it largely stemmed from fears about security of data and running speeds but these are no longer issues with the widespread availability of broadband and the fact that any SaaS vendor worth their salt will be able plough far more money and resources into security than the average recruiter.

“All of our data is centrally stored and they [the vendor] can offer far better protection than I could afford,” says Russell Dalgleish, European managing director of global engineering resourcing consultancy Talascend, which made the move to Bullhorn from its homegrown client/server platform.

While obstacles have been removed there are still a number of factors recruiters should be aware of when exploring SaaS. Phil Wainewright, a SaaS consultant and acknowledged industry expert, highlights two main areas. Recruiters should bear in mind that once they enter into a relationship with a SaaS provider, they become dependent on that vendor’s own viability, so should take steps to ensure they can easily retrieve their data if they need to. Secondly, he says to be mindful that you will have to base your working practices on their processes and if you switch providers this may mean adopting new practices.

Clearly if you stay with the same SaaS provider for a substantial period of time both of these will be less of an issue but because some SaaS providers entering the market will be start-ups, Wainewright advises recruiters to ask questions about the company’s background and business. “At a time when funding is tight, find out if they’re venture funded,” he says. “It’s important to have a plan B and to be prepared.”

Also bear in mind that while you will be dealing with the supplier, it may be a partner company whose hardware will be hosting your data, so quiz them on this and on areas such as downtime. Once again, in reality, the latter shouldn’t be an issue because the SaaS vendor’s own business survival relies on being available 24/7.

Nick John, managing director of FCP which develops the front office recruitment software, evolve, says its availability standards are similar to those of the banks at 99.999%, which he says equals around six minutes per year downtime. Compare this to the cost and time involved in getting an engineer out to repair a server and clearly SaaS looks to be the better option.

Despite the obvious benefits, the move to SaaS needs careful thought and for larger agencies which have made substantial investments in hardware and software, it will be a bigger decision. John recognises that it can be the emotional attachment to the traditional way of working that holds some people back. “There’s no logic to having a piece of tin that sits in the office from a data security or a business continuity perspective, it’s purely emotional,” he says. “It’s a bit like the paperless office — everyone knows it’s logical and it’s going to happen but in some
companies it just happens more slowly.”

While switching to SaaS was an “easy decision” for Talascend, Dalgleish agrees there can be a psychological barrier. “It can be a case of, ‘if I can’t see it, do I have it?’,” he says. “Not having the guts to make the decision can hold people back. My advice is to take a look at plenty of reference sites to find out what others say.”

John adds that there are a number of potential trigger points when it could make sense for recruiters to explore SaaS, such as when a server or software needs upgrading but he also comments that the current economic climate when business is quieter has made many recruiters look
at their in-house systems. “Since the second half of January we’ve noticed enquiry and demo rates go up,” he says. “Closure rates are not where they were a year ago but it does seem that recruiters are using the period to review where they are.”

Other suppliers tell a similar story and while it could be dismissed as provider-speak, they have a point since moving to any new system is much more difficult when there are other business pressures. Additionally, the spirit of most SaaS providers is to offer customers a high level
of integration with other web services, such as LinkedIn, job boards and multi-posting companies and in taking the SaaS approach recruiters are positioning themselves well to take advantage of future integration and developments if they migrate sooner rather than later.

In both the recruiting and technology world it can be difficult to know what’s coming around the next corner. And with news reports seemingly not able to decide whether we are emerging from or heading deeper into recession, a more agile, leaner software model that allows you to reduce costs in the bad times by scaling down and vice versa when the economy picks up, has to be worth considering.