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The Recruiting Guru Grills Joel Passen on Newton and the Applicant Tracking Software Market

1093369_business_shadowThe Recruiting Guru (@recruiting_guru) is passionate about all things recruiting: tricks, tools, tips, technology and beyond. As an avid blogger and recruiter at heart (day job), the Recruiting Guru is a sleuth, a social media junky and an all around curious guy seeking out the next big things in recruiting. He asks the tough questions and isn’t afraid to speak his mind.   Interview taken from The Recruiting Guru – ‘Interview with Joel Passen of Newton Software’ 3/10/2010

[Guru] Joel, thanks for agreeing to the interview.

[Joel] The honor is mine. I read your tweets.

[Guru] You guys claim to have the easiest to use applicant tracking software. Easy-to-use – I hear this all the time. What makes Newton any different?

[Joel] Frankly, most vendors can’t really explain what makes their software easy-to-use. We can. Newton is easy-to-use because it has recruiting DNA built in. This is particularly evident when you look at Newton’s workflow. It’s flexible and is designed to work the way that recruiting works.  So, from day one, our customers get an application that is smart and understands what they are trying to do. This smart, flexible workflow also allows us to enable critical features like automatically tracking EEO and OFCCP data, sending thank you letters to every candidate and providing real-time analytics.

With Newton, on day one, you get a login, get your job listings online, do a short walk-through with one of our product specialists and that’s it- you’re ready to go. Giving Newton to hiring manages is simple too. And,  it takes just minutes to get them entirely set up. Tell them to hit the green button if they like someone and the red button if they don’t. They love it and they use it which makes life easier for recruiters.

[Guru] So, you can activate Newton in a day?

[Joel] To us, easy-to-use translates to easy to activate – easy to get started. We don’t require customers to wade through paperwork or sign their first born away to get started. And, even better, it doesn’t take much training at all to get started with Newton. Recruiters are up and running in an hour and training a hiring manager takes a matter of minutes. We activate 95% of our customers, soup to nuts in less than 24 hours. And, activating Newton is 100% free – no activation or implementation fees. Oh, and we don’t charge for support either.

[Guru] Ok, so what do you charge for?

[Joel] (laugh) We have tiered pricing plans at Newton and charge for only staffing users. Hiring managers, interviewers, executives and HR stakeholders are all considered general users and we encourage companies to create as many general users as they want for free. And, we never require long-term contracts. Newton is a month to month service, pay as you go. This forces us to earn our customers’ business every month and holds us accountable. We’re forced to provide a stable platform and to continually strive to make Newton better, to be innovative, to listen. We have a saying here: “We design software that we’d want to use and we sell it the way we’d want to buy it”

[Guru] With this type of model, how do you make money? How do you compete?

[Joel] Well, my simple answer is that we charge people to use our software Guru. And, we have quite a few customers so we’re doing really well. But, I know what you’re really asking – how can we survive? Listen, we’re pioneering a trend that’s taking place not just in the applicant tracking space but in the software industry as a whole. With the availability of common platforms and open source tools combined with pure internet distribution models, delivering software is getting more efficient every day. Simply put, it’s gotten cheaper to offer better technology and we’ve built our company and business model reflect the times. Plus, we don’t have the baggage that our competitors have, the debt, the huge teams to support, the fancy offices, the tradeshow booths. We don’t need to charge exorbitant prices or charge for training implementation or any of that peripheral stuff that makes buyers weary.

[Guru] What do these new models mean for the recruiting software space?

[Joel] Well, for the buyers of applicant tracking software, these new trends are great. There’s finally some innovation in the market. It means that software is getting better and less expensive at the same time. Buyers like that. It’s a buyer’s market and it will remain this way.

As for the vendors, this means that they are going to have to find ways to adapt. The competition is going to continue to increase as new vendors come on line offering innovative technology delivered in more economical ways. It’s going to get harder before it gets easier for vendors that aren’t prepared to adapt to the new software economy.

[Guru] So what’s next for Newton Software? Are you guys heading into Talent Management or the HRIS space?

[Joel] Well, as you know, we just released Newton RPO, a version of Newton designed for recruitment outsourcers. We’ve actually had customers using this edition since 2008 but just recently started to market it. We’re comfortable in the recruiting software space. We know recruiting and there are other opportunities in this space.  Otherwise, we have a full product roadmap for scheduled for Newton for the rest of the year consisting of some really killer new features that continue to focus on improving and simplifying recruiting. Beyond that, we have some plans for a new product that we’re not talking about at the moment. You’ll have to stay tuned.

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