The best way to choose between software vendors, experts say, is to ask each of them the same questions, so you can directly compare the results.

To help accomplish that, staffing firm Swat Recruiting has released a list of questions companies should ask ATS vendors, available here.

The questions cover all relevant areas, how the software works, what it can do and how it’s priced.

The reason: With so few jobs available, every open position elicits a flood of applications — from qualified, under-qualified and over-qualified candidates. Third-party providers can help companies sort through the piles to find the best employees.

Same goes for recruiting software, which can help companies organize the applicant pool.

Also, experts say now’s a good time — for companies that can afford to spend — to stockpile talent at low cost to prepare for the future, or identify potential recruits for hiring once the economy picks up.

Of course, many companies can’t afford any new spending right now and aren’t hiring very much in the first place.

What about your company? Have you considered changes to your budget for third-party recruiters or recruiting technology? Let us know in the comments section below.

When it comes to HR software, the most well-known offerings are often impractical for all but the largest companies. What’s out there for small businesses?

Fortunately for smaller businesses, a lot of systems are scalable and priced based on the number of employees in the company.

The first choice a company has to make: an in-house system, or a Web-based, on-demand program?

In-house systems are purchased and then installed and maintained by the company’s IT staff.

For Web-based software, companies pay a monthly fee to access the system online. The benefits: There’s no big up-front cost for the software and necessary hardware, and it’s easier to upgrade as the company grows.

However, some businesses are more comfortable with the security and control that comes with installing software in-house.

As for specific products, employers have a lot of choices — with more options for small companies appearing all the time. Here’s a list of the top five HR tech products for small business, according to CNN‘s “Ultimate Small Business Research Guide”:

1. SimpleHR — One of the least expensive HR products available, SimpleHR lets companies store basic information about employees’ salary, benefits, performance reviews, vacation use, safety incidents, etc. Different versions are available (with different prices), depending on how many employees the company has.
   For more information, read our Simple HR Review.
2. People-Trak HR — Priced at a one-time fee of $20 per employee, People-Trak is one of the more flexible offerings. Other versions are available that add features for additional costs.
   For more information, read our People-Track HR Review.
3. OrangeHRM — This open-source software is free — but employers can buy a professional support package if they lack the IT staff to comfortably do it themselves. A Web-based option is also available for a monthly fee.
   For more information, read our OrangeHRM Review.
4. EmpXTrack Starter Edition — EmpXTrack combines payroll software with an employee database, featuring a self-service option that lets employees keep their own information up-to-date. Pricier editions add tools for performance evaluations, surveys and recruiting.
   For more information, read our EmpXTrack Starter Edition Review.
5. Microsoft Dynamics NAV and GP — For some smaller companies, these offerings from Microsoft could be overkill, but they might be worth the investment for employers with robust growth who already rely heavily on Microsoft products.
   For more information, read our Microsoft Dynamics NAV and GP Review.

Social networking Web sites.

Many HR managers think social networking sites like Facebook and LinkedIn are the new tool most likely to lead to better quality hires, according to a recent survey by PBP Media and Standout Jobs.

When asked which new trend will provide the best improvement to their recruiting process, the HR managers surveyed answered:

• social networking (33%)
• candidate relationship management tools (26%)
• search engine optimization for job listings (20%)
• blogs (5%)
• online video (5%)
• Twitter (2%)
• pay-per-click advertising (2%), and
• other (7%)

One other recruiting tool more companies are relying on this year: their current employees.

When asked where they plan to increase spending and focus in 2009, the top two responses: 22% of HR managers said referral programs, and 17% said internal transfers.

More than 40% of companies plan to spend the same amount on HR-related software in 2009 as they did in 2008, according to a recent survey by International Association for Human Resources Information Management.

For 21% of companies, the HR tech budget will increase, while it’ll decrease at 37% of firms.

Where’s the money going?

Companies spending money in 2009 said they’ll be buying:

• onboarding software (28%)
• benefits management tools (25%), and
• general HR management systems (12%).

For companies with money earmarked for technology purchases, some experts say now is the best time to spend it — many vendors may be hurting for sales and will be willing to negotiate discounts to attract new customers.

1. Not getting customer references — References from current customers may be the most important pieces of information you can get when making a tech purchase. Ask for contacts so you can call them and get unbiased details.
2. Skipping a thorough demo — Before a decision is made, the software needs to be checked out by HR, IT, management and anyone else who will be affected by the change.
3. Ignoring the vendor’s financials — Especially as more software becomes Web-based and vendor-hosted, it’s important to be confident the company you’re buying from is going to be around for a while.

First some of the benefits of using an ATS: In addition to helping you organize and keep track of candidates, it can also collect data on how applicants heard of your job postings, which will help you maximize your recruiting budget. Most importantly, perhaps, it speeds up the process to help you sign people on before competitors do.

The biggest downside, of course, is cost. But here some things to keep in mind if you decide to make the investment:

Don’t go too deep too soon – A lot of small companies are turning to Software as a Service (SaaS) vendors to save money. Basically, instead of buying software that you install on your network, you’ll pay a scheduled fee to access software hosted by the vendor. Generally, you pay a certain amount based on the number of users, so small companies don’t have to fork over as much money as a huge enterprise.

Also a lot of companies will offer a trial period before you start paying for the service. Look for a vendor that offers that so you can test the waters before making the investment.

Find a trusted vendor - Ask the company how data is handled. You’ll need to make sure everything is secure, backed-up, and always available. This is where you need to communicate closely with your IT department – they’ll know what specific things to look for.

Measure ROI - Look for software that measures how much time and money was spent on filling each position. That’ll help give you a sense of whether or not your investment was worth it.

Here are three key pieces of information to make sure your ATS gives you:

1. Candidates’ decision-making criteria. You need to know what’s convincing people to start looking for new jobs. In the online application, ask something like: “What criteria will you use to help you decide on your next career move?” That will not only help you get info about specific candidates, but also what the workforce in general is looking for right now — which is valuable knowledge for your recruiting program.
2. Who helps them make decisions. Everyone asks for advice before changing jobs. If you know who they’re asking, you’ll have a better idea of how to sell the job to a candidate who’s on the fence.
3. How they really heard about the job. Most candidates go through several sources of info before they complete an application (they see an ad on a job board, then Google your company’s name, etc.). So asking them to self-identify what clued them in isn’t the best way to track that data. Some tracking systems do it automatically by keeping tabs on the Web pages candidates came from when they got to the application page.

The problem is that a lot of systems rely on candidates to tell you how they learned about a job opening, or about the company in general. Usually, the software will ask the question and have users pick from a drop-down menu. That can cause problems when a candidate looks at more than one source of information before applying for the job (which is normally the case.)

Take this scenario: A candidate does a Google search for “account jobs in Philadelphia,” or something like that. The first result is a listing you posted on a major job board. The candidate clicks on it, reads the ad, then follows a link to your company “Careers” page to learn more.

By the time candidates like that actually make it to the application, which source are they going to choose? For your purposes, you’d want them to pick the job board, since that was what led to them to your Web page, and what got the job to show up on Google in the first place. But they could just as easily pick either of the other two. Or, they might pick something else entirely, because telling you how they learned about the position is far less important to them than actually applying for the job.

What’s the solution? One way is to choose an ATS uses tracking tags to electronically keep tabs on all the pages a candidate visited before getting to the application.

And if you use a system without that feature, you can still look at the results you get and just take them with a grain of salt. After all, when candidates are getting information from a variety of places, it stands to reason that all of those sources are important.

Read more about the inaccuracy of ATS sourcing data here.

Zoho, known for competing against Microsoft and Google with a suite of office productivity software, has just launched a new service for HR managers. It’s a Web-based (no installation necessary) HR management application called Zoho People.

It comes with the basic HRM functions – you can create and edit your org chart, upload forms, and set up self-service portals for employee-submitted leave requests, expense reports, etc. There’s also a recruiting module (pictured below) for keeping track of open positions, searching a resume database, and other parts of the process.

It’s still in a beta (testing) phase, so pricing is yet to be determined. But as of now the plan is that it’ll be free if you’ve got less than 10 employees, then $50 a month for each HR administrator and $50 a year for each employee.

The interface looks pretty user-friendly and Google-like. And the 10 free users option makes it easy to sign up and check out for yourself, which you can do so now by clicking here. A video tour is available here.