Applicant Tracking System: Features, Benefits, And How To Build One
The world of HR and recruitment is rapidly changing, and companies have to keep up with the transformation if they want to continue hiring the most talented candidates. One of the best ways to ensure a competitive advantage in the recruitment market is to have an ATS, or applicant tracking system, in place.
But what does an ATS do and why has it become such a valuable tool for recruiters around the world? Join us as we talk about the importance of a good ATS, how to know it’s time to add an ATS to the mix if you don’t have one yet, and whether you should build or buy an applicant tracking system for your organization.
What is an applicant tracking system and why do you need one?
By one estimate, 75% of recruiters and talent management professionals use an applicant tracking system in their routine. So clearly, modern ATS solutions have a lot to offer to organizations, recruiters, and even candidates. But before we can discuss the reasons why you should consider buying or creating an applicant tracking system, let’s answer a fundamental question: what is an applicant tracking system and how is it different from other types of HR software?
An applicant tracking system is a software application designed to assist the HR team in the hiring process. An ATS can come with different functionality, be available on different platforms, and serve the needs of organizations that work in different industries or on different scales. What unites all applicant tracking systems is their ability to make the hiring process more efficient for all parties involved.
ATS vs. HRIS
ATS, or Applicant Tracking System, and HRIS, or Human Resource Information System, are two of the most popular types of HR software, along with HRMS, or Human Resource Management System software. But are ATS and HRIS solutions really interchangeable?
No, they definitely are not! Sure, it may seem like ATS and HRIS solutions have a similar purpose, and they do, but only to a degree. An applicant tracking system deals with everything concerning a candidate for a job, but once one of the candidates lands the position, the work of an ATS ends, and the work of an HRIS begins. In other words, one is not a substitute for the other, and an organization will only benefit from having both.
Applicant tracking system benefits
Like all types of human resource management software, applicant tracking systems bring numerous benefits to the HR processes at an organization. The switch to an ATS is usually even more noticeable than other digital changes, given that the HR industry is known for being slow to adapt technology. So what exactly do you get by introducing an ATS to your recruitment procedure? Here are the biggest applicant tracking system benefits to know about.
1. Higher quality candidates
By different estimates, 75% to 88% of candidates are considered unfit for the position they’re applying for. Moreover, an average job opening can attract around 250 applicants. Without an ATS in place, this puts a lot of unnecessary pressure on the recruiter and often leads to questionable hiring decisions. With an applicant tracking system, the recruiter will get a clearer picture of the objectively strongest candidates.
2. Lower cost of new hires
The average cost per hire in 2023 in the US is $4,700, while the cost of filling an executive-level position can go upwards of $18,000. A significant portion of this cost is the salary of a recruiter who has to manually screen all the dozens or hundreds of incoming resumes, many of which are not relevant to the position. An ATS will automatically screen the resumes and select the most suitable candidates, saving money for the company.
3. Reduced time to hire
On average, it takes a company 36 days to fill a job opening, and time can go up with rare or high-level positions. An applicant tracking system reduces time to hire by automatically screening the resumes and letting the recruiter see only the most qualified candidates. It can also source passive candidates, help build effective communication with a candidate, and offer other features to speed up the hiring process.
4. Data-powered decision making
Human resource management system software as a whole has come a long way from its early days. The complexity and functionality of ATS solutions changes every year. Modern applicant tracking systems, powered by AI and machine learning capabilities, can process large amounts of data and take over many of the typical recruitment duties. The combination of data-backed business insights and high processing power helps make better-informed decisions.
5. Stronger employer branding
Despite the ongoing economic recession, the job market in the US is the strongest it’s been in over fifty years. That is why the competition among companies to hire the most qualified candidates is not slowing down. And by streamlining the recruitment process and making it more effective and engaging for the candidates as well as recruiters, companies can create a stronger brand that is more likely to attract the right candidates.
6. Foolproof compliance
When managing multiple vacancies at the same time, or when the company operates in different locations around the world, there is a risk of accidentally not following all the necessary laws and regulations. This can subject the company to a lawsuit and tarnish its reputation. An ATS helps avoid those risks by applying various regulation measures depending on the location, including DEI initiatives, and maintaining the information that can come in handy in a lawsuit.
7. Lower chance of error
HR and recruitment is usually associated with vast amounts of data that needs to be collected, entered, and managed with maximum precision. Unfortunately, doing it all manually is bound to result in human error sooner or later. Needless to say, the reliability of software makes the chance of error significantly lower, which means you can trust an applicant tracking system with the most accurate calculations and insights.
8. Improved hiring processes
A well-designed applicant tracking system improves the hiring procedure at every stage. From reducing the amount of paperwork and minimizing the waiting time for the candidate to preventing the situation where the recruiter continues spending time and effort on a job opening that has already been filled — the positive effect of a good ATS will be noticeable in all aspects of running a recruitment operation.
How to know it’s time to introduce an ATS at your organization
Before companies begin to consider embarking on an applicant tracking system development journey, they typically ask themselves: “Is this the right move at this stage? Does our current maturity stage require us to get an ATS? Does it make financial and practical sense for us to build or buy a recruitment applicant tracking system?”
While there are no rules or criteria set in stone that a company has to meet in order to adopt an ATS, there are ways to determine whether the move to an applicant tracking system is right for you. Here are a few questions to ask yourself before making your decision:
- Do you often struggle with outlining a vacancy description that is both attractive to the candidates and relevant to the position?
- Is it getting harder to find the right candidates — for example, do you have to constantly look for new possible sources?
- Does the job of your recruiters include posting the same job description on multiple platforms, which is both mundane and time-consuming?
- Do you feel like once the job opening is posted, you become overwhelmed with the number of applications, even though most of them prove to be unfit for the job?
- Is your current way of tracking applicant progress — for example, Google Spreadsheets — getting less manageable and more confusing as the number of applicants grows?
- Do you want to reduce your reliance on third-party recruiters or stop it completely, especially for high-level positions?
- Have you ever been in a situation where you’ve met a great candidate who was wrong for that particular position, but now that there is a different, more suitable job opening, you cannot find their contact information?
- Do you often struggle with collecting and storing feedback from the interviewers during the candidate’s journey across several different interviews?
- Have you ever experienced a case of missing data, lost connections, wrongly scheduled interviews, or candidates complaining about your recruitment process?
- Do you find it difficult to evaluate the current performance of your recruitment team or plan the upcoming recruitment efforts due to the lack of credible data?
If you answered positively to most of these questions, adding an applicant tracking system to your HR software setup may be the perfect move for your organization.
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Creating an applicant tracking system from scratch vs. an out-of-the-box solution: What’s right for you
The choice between buying or building applicant tracking system software is one of the most vital ones an organization has to make for its HR operations, on par with selecting the right HRM tool or developing a recruitment pipeline that meets the needs of every stakeholder. This is also not an easy choice to make because both options are viable in different situations. Here is how ready-made applicant tracking system software compares to a system you’ve built from scratch.
As the digital transformation in HR is well underway, there is no shortage of popular and functional ATS solutions, including BreezyHR, BambooHR, and Freshteam. Most of them are available as SaaS products, which come with their own advantages and limitations. Here are the main pros and cons of a ready-made applicant tracking system you should consider.
- Ability to launch quickly. A ready-made ATS requires minimal setup, so there isn’t a lot of delay before you can start using it.
- Immediate affordability. With SaaS-based applicant tracking systems, you only need to pay a relatively small amount of money upfront.
- Community support. Popular ATS and recruiting solutions have thousands of active users who regularly share their experiences and success tips.
- Long-term financial commitment. When using an ATS with recurring payments, you risk facing vendor lock-in, when the cost of switching to another provider does not make financial sense.
- Low customization opportunities. With some exceptions, ready-made ATS products are offered as-is. And even when some customization is possible, it usually drives the price up significantly.
- Integration issues. If you’re already using some HR software at your organization, adding a new tool can prove challenging because of all the integrations you need to perform successfully.
Creating an applicant tracking system is something more and more companies plan to do in the near future or are already doing. So how does a custom ATS solution compare to ready-made SaaS tools? These are the main pros and cons of a custom-built recruitment system.
- Endless customization and scalability. When building your own tool from scratch, you can not only include any feature you can think of, but also pave the way for quick and effortless scalability in the long run.
- No unnecessary expenses. With a custom ATS, you pay money only for the development of the solution and sometimes for maintenance. There are no monthly or yearly fees to take care of.
- A perfect fit for your business. A custom-built ATS is always developed based on the company’s business needs and the needs of the HR team, which results in a solution that seamlessly integrates into the company’s strategy.
- Complete product ownership. When a software product is developed exclusively for your organization and based on its unique needs, there is no risk of HR processes taking a hit because of a vendor suspending maintenance for a ready-made ATS system.
- High initial costs. Without a doubt, developing an ATS solution from scratch costs considerably more than the first payment for a SaaS system.
- Development takes time. Building a custom applicant tracking system can take two to six or more months, so you’ll need to account for the waiting time.
- Stakeholder involvement required. At every stage of the development process, from business analysis to quality assurance, the company’s representatives will need to actively participate in the process.
How to build an applicant tracking system
Now that you know for a fact that you need an applicant tracking system at your organization and that your ATS needs to be custom-built, not ready-made. The next step is to actually develop your recruitment applicant tracking system. Here is how to build an applicant tracking system that will meet the business requirements of your organization.
Who should perform applicant tracking system development?
When you want to build your own ATS, you will typically have two options: to do the development in-house or to hire an external vendor — in other words, to outsource the project to an outside team of developers. The first one is not really an option for most companies that don’t have an already functioning development team, as assembling a team for one project is both expensive and extends development time by at least a month.
This is why many companies now prefer to outsource their ATS development projects to software vendors. This option is both cost-effective, as popular outsourcing destinations like Eastern Europe and Asia offer highly competitive rates for their services, and time-efficient, as you don’t have to spend time hiring and onboarding an already established team.
The exact composition of your outsourced ATS development team will depend on several factors, including the scale and specifics of the project, as well as whether you have any in-house specialists who can contribute to the process besides software development. Here is what a team for developing an applicant tracking system for a medium-sized company can look like:
- A business analyst
- A UI/UX designer
- A system architect
- A project manager
- Two back-end developers
- One back-end developer
- Two software QA engineers
Choosing the right applicant tracking system features
One of the biggest benefits of custom human resource management software is the fact that you get to include whichever feature you find essential and don’t have to deal with the stock features of a ready-made ATS you don’t really need. This is why selecting the features to include in your application is an integral step of the development process that requires participation from all project stakeholders.
At the same time, it’s definitely a good idea to take inspiration from the most widely used and coveted features of popular ATS solutions. Here are the features your applicant tracking system will benefit from:
- Data centralization. One of the key yet often overlooked features of a good ATS is the ability to consolidate the data from multiple sources into one convenient and easy to use system. This can be particularly useful to those who use multiple software HR tools.
- Custom workflows. The recruitment process differs from organization to organization, and there is no guarantee that the most popular recruitment workflows will work for you. This is why it’s important to be able to adjust the workflow in your new ATS.
- Vacancy description creation. An advanced, preferably AI-powered applicant tracking system can create job descriptions based on the requirements set by the recruiting team, saving time and making the descriptions even more appealing to candidates.
- Integration with job platforms. Two-way integration allows recruiters to automatically post vacancies on job platforms and LinkedIn, as well as import information about candidates from job platforms and LinkedIn with a couple of clicks.
- Candidate relationship management. If you don’t feel like adding a separate CRM tool, you can consider adding CRM functionality to your ATS, so that your company can attract the best candidates for each job opening.
- Interview management. An ATS tool should be able to schedule interviews, send out interview invitations, and provide a convenient platform for acquiring and storing feedback from interview participants.
- Automation. One of the main reasons to introduce an applicant tracking system at an organization is to speed up the process of recruiting and save time for the HR team. And nothing is more beneficial to this goal than the ability to automate everyday tasks. Of course, it’s still important to find the right balance between automation and the human eye.
“While automation can save time, it’s crucial to maintain a personal touch throughout and beyond the recruitment process. Review applications flagged by the ATS, and always be ready to search the database to find “silver medallist” candidates so that they don’t slip through the cracks.
Mark North, Creator of Talent Leaders Newsletter
- Mobile accessibility. The job of a recruiter is not always a desk job. If your recruiters frequently have to visit other locations or be away from their desktop computers for other reasons, a mobile-friendly ATS will maintain the continuity of the recruitment process.
- Employee branding and marketing. Creating a positive image of an organization online is a surefire way to attract the best candidates. A well-thought-out ATS allows to create a unified message and branding across job postings, career pages, social media, and more.
- Reports and analytics. Modern ATS tools are so advanced that their functionality doesn’t stop with guiding the recruiter through the hiring process. They can also analyze large amounts of data to generate informative reports and projections.
Selecting the right tech stack for the project
The technologies used for creating an applicant tracking system have a direct impact on the success of the project: with the right technologies, you will be able to meet project goals, incorporate every single desired feature, and ensure the stability, good performance, and security of your solution. A wrongly selected technology stack, on the other hand, threatens the success of the whole operation.
As is always the case with software development projects, the tech stack fully depends on the specifics of the project: the required functionality, the scale of the project, the platforms where the solution will be deployed, the need to integrate the tool with other systems, the company’s plans for the future regarding the recruitment process, and more.
The choice of back-end technologies for developing an ATS includes:
- .NET Core
- Ruby on Rails
As for the front-end part of the application, top technologies include:
Finally, as applicant tracking systems heavily rely on data for accurate results, the most capable database tools to use on the project include:
The cost of creating an applicant tracking system from scratch
Popular ready-made ATS solutions use different pricing models: some have a flat monthly fee, others charge per user (in this case, a recruiter) or per vacancy. The cost of using a SaaS applicant tracking system ranges from $15 per employee per month to $5,000 flat rate per month and beyond. But how much does it cost to build your own ATS?
The exact cost of an applicant tracking system built from scratch depends on several factors, such as the complexity and functionality of the application, the size and experience of the team working on the project, and where your development team is located. For example, developers in the US or Canada cost four to eight times as much per hour as developers in Ukraine: $100-$200 vs. $25-$50. And given how competent and well-rounded Ukrainian developers are, it’s not surprising that many Western companies now prefer to outsource their ATS development needs to Ukraine.
A typical applicant tracking system with a moderate number of desired features can take around four months to complete. If your project requires three software developers — two back-end and one front-end — then you can expect to pay $50,000-$80,000 for the development itself when working with engineers from Ukraine or $200,000-$350,000 when working with a US-based development team. That does not include the services of other specialists, such as UI/UX designer, project manager, software architect, and QA engineers — it’s only possible to determine how many of those specialists you’ll need and for how long once project requirements are absolutely clear.
Overall, you can expect your ATS development project to cost in the vein of $100,000 when outsourcing to a Ukrainian company or upwards of $400,000 when employing a local development team.
Our experience with applicant tracking system software
We are a company with 21+ years in business and a steadily growing team. Once our number of vacancies and applications exceeded a certain threshold, we faced the prospect of either missing some important data due to our then-current recruitment solution being less than perfect, or developing a new solution. As a software development company, it’s easy to guess which direction we chose.
Our goal was to develop an applicant tracking system that would not only transform our recruitment process and allow us to make higher-quality hiring decisions faster, but also seamlessly integrate with our existing HR & ERP systems. This is why we built our ATS with the help of Odoo, a popular open-source ERP and CRM tool. With an experienced team of Odoo developers and a clear vision of what we wanted to see in the new ATS, we finished the work on time. The result is an ATS solution that we successfully use to this day.
Some of the key features implemented in our new applicant tracking system include:
- Creating vacancy descriptions
- Posting job openings on various platforms
- Processing incoming applications
- Manually adding candidates to the database
- Automatically adding candidates from other platforms
- Storing and managing candidate information
- Scheduling interviews with candidates
- Acquiring and storing interview feedback
- Quick status transition from “candidate” to “employee”
The transformations in the HR and recruitment industries can get confusing at times. Still, one thing is clear: there are so many applicant tracking system benefits that it’s not a question of whether you need an ATS, but a question of where to get one. And since ready-made ATS tools often have too many limitations and not enough flexibility, the decision to build your own applicant tracking system is a completely natural one. All you need is a clear vision of the product and a reliable tech partner who fully understands your ideas.
Frequently asked questions
What is an applicant tracking system?
An applicant tracking system is a software solution that is designed to assist an organization at every stage of the hiring process. An ATS can help create job descriptions, screen candidates and CVs, source candidates from third-party platforms, schedule interviews, and track each candidate’s journey along the recruiting process.
Why do companies use ATS?
Companies use applicant tracking systems for several reasons. First, they speed up the recruiting process both for the HR department and the candidates. Second, they automate a lot of recruiting stages, saving time and money for the organization. Third, they reduce the probability of human error. Finally, they improve employer branding in the competitive recruitment market.
What is the difference between a CRM and an ATS?
A CRM, or Candidate Relationship Management system, is a tool designed to nurture a strong working relationship between the organization and its prospective talent. An ATS, or Applicant Tracking System, on the other hand, is a solution that is meant to deal with more basic tasks of managing a recruitment workflow, such as data collection and interview management.
How do you develop an ATS?
If you’ve come to realize that your organization needs an applicant tracking system, you have several options. One is to take an out-of-the-box solution and possibly modify it to fit your needs better. The other one is to develop an ATS from scratch. This option requires the services of a software development team, which means you need to have either an in-house development department or work with an outsourced team. However, in the end, you’ll get the exact solution you and your HR team envisioned.
What should an applicant tracking system have?
The exact set of applicant tracking system features depends on the initial requirements of the organization’s HR department. Some of the most widely used features include creating and posting job descriptions, sourcing candidates from different platforms, screening resumes, running skill tests, scheduling interviews, conducting communication with candidates, making job offers, and onboarding.