Talent Management
Applicant Tracking

Should You Buy an ATS for Your Recruiting Company?

Published by in Applicant Tracking

Before we get down to answering that question, allow us first to take a moment   to go over some basics.

ATS for recruiting

What exactly does the acronym ‘ATS’ mean?

Sure, you can easily rattle off the textbook answer:  Applicant Tracking System.

Why should we even be concerned with such an obvious question?

How about we repeat the question, but with one small change:

What exactly does the acronym ‘ATS’ mean…for you and your recruiting business?

Now the question, and the answer, is more intriguing, right?

Ask any successful recruiting and staffing agency and they will swear by, and say they cannot do without, recruitment software like an ATS. In fact, according to recent ATS research, 75% of recruiters and hiring managers report they use some form of ATS or recruiting software.  This software enables firms to be successful meeting clients’ needs quickly and efficiently.

As of now, the worldwide staffing and recruiting industry is a $400 billion market!  Yes, you read that right; no printing error here. That huge dollar amount fuels this market today. And in the US this market is expected to grow another 7%.

Contemplate this—your recruiting business is one among a group of 260,000 other companies dealing with 50,000+ corporations in the recruitment and consulting marketplace.

With such intense competition, what does it take for your company to stand out and carve your own niche?

Through our digging, pulling, and analyzing of data from various surveys, our statistics prove that businesses using an ATS are 40% more productive compared to those functioning without them. In addition, companies who adopt recruiting software report an average growth of 13% year-over-year. Of the 200,000+ staffing firms in the market today, small businesses represent a significant number of them, if not the majority. Of those small businesses, more than 60% of them are currently using some form of an ATS.

The sudden surge of companies using an ATS can be understood by examining what advantages an ATS offers. For example, statistics show 70%-76% of applicants are hired through companies utilizing some form of an ATS.  In comparison, only 33%-38% of applications are converted into new hires through a tedious manual hiring process.

Similarly, it takes an average of 72 resumes per hire to close a vacancy without the support of an ATS. Compare this to an average of 18 resumes per hire to close a vacancy with the use of a quality ATS—a quality ATS that can automatically sort though, and screen for exact specific requirements.

The traditional methods of sorting resumes, which involve handpicking and manually entering candidate details into a database, prove to be time consuming and tedious. Not to mention that many times this method doesn’t even yield the best hire for the right job! It is safe to say that an applicant tracking system is a definite boon for IT recruiting and consulting firms.

So another obvious question: Can it be a boon for your company as well?

Many similar companies seem to think so: the ATS market size is about $4 billion as of 2013 and expected to grow 20%. The market for core HRMS software is much larger—over $12 billion—and growing as well.

Things to look for in an ideal ATS

  • Social Media Integration– By far one of the most important features to look for in an ATS. Lets you integrate with multiple job boards and social media websites for simultaneous access.
  • Mobile Capability- In this age of technology, you should expect and require mobile functionality. You need an ATS that can fit in your pockets as you’re on-the-go.
  • Cloud Capabilities- These days you need to be able to access your entire business from any part of the world.
  • Enhanced Resume Parsing- A no brainer, don’t invest in a service that would still require you and your team to manually enter resumes into your database.
  • Integrated Online Portal- You need a one stop solution to all your hiring needs. An online portal saves you from incurring heavy costs on infrastructure.
  • Reporting & Analytics- What good is a productivity enhancer if it does not provide the means to measure it?
  • Searching and Sorting Candidates- Again a no brainer; an ideal ATS should be able to efficiently sort out candidates across multiple job boards exactly as per your requirements.
  • Per Hire Visibility- An ATS which informs you of the happenings and the progress of the candidates is always a plus.
  • Last but not the least THE COSTIf you’re willing to dig deep into your pockets to invest in your business you need to make sure the investment can pay for itself and add to the bottom line.

If there an ATS is so great, why aren’t all SMBs getting them?

Well, simply put, ATSs don’t come cheap!

The integration of application tracking systems into the industry was a boon to large companies, but to the small and medium sized firms, the hefty price tags made these systems untenable. Enterprise ATSs can range from tens of thousands to hundreds of thousands of dollars per year.

Does that mean going for an ATS is a BANE for my medium scaled recruiting business?

The answer is a resounding “No.” As the technology has matured, a lot of systems are now targeted at the SMB market, with price tags to match.  There are even some free ATS options out there.

But at the end of the day that’s a decision you’ll have to make for your company’s unique situation. It’s up to you to decide whether an ideal ATS would be a boon or bane for your recruiting firm.

Header by Rachel Wille

Looking for Applicant Tracking software? Check out Capterra's list of the best Applicant Tracking software solutions.

About the Author

Sameer Kumar Penakalapti

Sameer Kumar Penakalapti

Sameer Penakalapati is a technology executive lead and investor of CEIPAL. He is the face of two Inc. 500 ‘Fastest Growing Private Companies in America.’ His interests include ERP (SAP, Oracle), eCommerce portals, security testing, and CEIPAL. He set up a successful strategy to help staffing companies track applicants and manage their workforces faster, better, and smarter.



Comment by Ram Mani on

very well articulated and compiled blog! Liked the simplistic approach!!

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