In this day and age, no staffing organization in their right mind would operate without an Applicant Tracking System. Not having one would be like running a trendy restaurant without a point-of-sale system: possible but archaic.
Twenty years ago, that wasn’t the case. ATS platforms were luxury investments that seemed expensive and unnecessary. Fast forward to today, and ATS is non-negotiable. Industry standard. The bare minimum to compete with other firms.
Why hasn’t Contract Lifecycle Management (CLM) followed the same path?
In 2025, staffing organizations still manage contracts in email threads, Word documents, and random desktop folders. They invest six figures in recruiting and sales technology but $0 in contract management. And according to industry experts, that gap is costing them more than they’d ever spend closing it.
The disconnect reveals something fundamental about how staffing organizations think about technology investment, and why that thinking is broken.
How ATS Became Essential (And CLM Didn’t)
The transformation of ATS from optional to essential happened gradually, then suddenly. Early adopters gained competitive advantages. They placed candidates faster, managed pipelines better, and scaled operations that would’ve been impossible manually.
As more firms adopted ATS, the pressure mounted on holdouts. By the 2010s, not having an ATS meant falling behind. After the pandemic it meant being left out entirely.
The value proposition was clear: ATS helps you make money faster. Find candidates quicker. Track more opportunities. Close more deals. The ROI was visible, immediate, and impossible to ignore.
CLM, on the other hand, is still stuck in that “optional” phase. Most staffing organizations don’t have dedicated contract management systems. According to Scarlett Jones Pierce, Executive VP at Recruiting Factors, the situation is universal: “One hundred percent of staffing agencies have contract mismanagement until they integrate [a CLM solution]. There’s no way around that. It’s 100%.”
The Mentality of Making Money Now vs. Saving Money Later
So why did ATS become universal while CLM remains optional? The answer lies in how organizations think about technology investment.
Contract management sells something much harder: prevention. It stops losses that haven’t materialized yet. It helps you avoid audits that may or may not come. It prevents problems quietly building in the background that nobody can see. There are no immediate wins to celebrate, no dashboard showing “disasters prevented today.”
Operations teams push for it, but they’re already fighting the “overhead” label, seen as cost centers, not revenue drivers. The ROI conversation becomes awkward because you’re asking leadership to invest in avoiding problems they’ve managed to dodge so far. And if those problems haven’t hit yet, why would they hit tomorrow? It’s a tough sell. The urgency only shows up when disaster strikes, and by then you’re buying in crisis mode, paying emergency prices for what should’ve been infrastructure.
What the “Savings” Actually Cost
Organizations that skip CLM aren’t saving money, they’re just delaying when they pay. And they always pay more.
The real costs show up in multiple forms:
Lost Revenue
- Invoice timing windows missed because no one tracked contract payment terms
- Placements that fall through when compliance requirements surface too late
- Billing adjustments that go uncaptured for years because nobody’s tracking contract amendments
Compliance Penalties
- Organizations following the wrong version of contracts, only discovering it during audits
- Remediation costs to achieve compliance after failures
- Hours spent reconstructing contract histories when regulators come knocking
The “Circle of Death” Perhaps most insidious is the current visibility problem. If the person managing the contract isn’t communicating with the teams who need to ensure compliance, operations might follow one version, accounting another, delivery another, and an administrative team in a BMS or with an MSP another. That creates a ‘circle of death’ where the left hand doesn’t know what the right hand is doing.
Different departments operating from different contract versions. Finance billing on outdated rates. Operations enforcing terms that were amended months ago. Sales promising deliverables that the current agreement doesn’t support.
Final Thoughts
In 2005, not having an ATS was just “how things were done.” By 2015, it was a competitive disadvantage. By 2025, it’s archaic.
We’re at that same inflection point with CLM. The agencies that recognize contract management as essential infrastructure, not optional overhead, are pulling ahead. The ones still treating it as “nice to have” are the ones experiencing what Pierce calls “five-alarm emergencies.”
Ready to close the ATS-CLM gap? See how Zeal helps staffing organizations bring the same level of sophistication to contract management that they already have for candidate management, without disrupting how your team actually works. Learn more here.
