Key Takeaways
- An applicant tracking system (ATS) is software that centralizes job postings, applications, and hiring workflows to reduce time-to-hire and improve candidate experience across your entire organization.
- In 2025, most growing companies with 20 to 500+ employees rely on an ATS to handle volume, collaborate effectively across hiring teams, and stay compliant with regulations like GDPR and EEOC.
- The best applicant tracking systems now combine workflow automation for job posting, screening, and interview scheduling with collaboration tools, analytics, and integrations to HR and payroll tools like Payrun.
- Small and mid-sized businesses do not need enterprise complexity. You can start with a simple, scalable ATS and connect it to systems you already use for payroll, benefits administration, and employee management.
- This article covers how an ATS works, its core benefits, when to upgrade, must-have features, pricing ranges, and how Payrun fits into a modern hiring and HR ecosystem.
What Is an Applicant Tracking System (ATS)?
An applicant tracking system ATS is recruiting software that tracks candidates from job posting to hired or declined status. It replaces scattered spreadsheets, email threads, and manual coordination with a single platform for managing candidates throughout the recruitment process.
In 2025, a typical ATS workflow looks like this: you publish a role to Indeed, LinkedIn, and your custom career site from one dashboard. Applications flow into a centralized candidate database where resume parsing extracts key details automatically. Recruiters and hiring managers then move candidates through stages like applied, screened, interview, and offer. Each stage triggers relevant actions, from confirmation emails to interview scheduling requests.
The market offers a range of ATS solutions. Basic systems provide simple database storage and status tracking for managing candidates. Full-suite platforms add automation, analytics, interview scheduling, offer management, and onboarding process modules. Some all in one platforms even include benefits administration and salary benchmarks for comprehensive talent acquisition.
Who uses an ATS? In-house recruiters and HR teams rely on it daily. Human resources generalists use it to coordinate with hiring team members. Founders of 20 to 200 person startups use it to stay organized during rapid growth. Some external agencies also use ATS platforms to track candidates across multiple clients.
How an ATS Improves Your Hiring Process
An ATS replaces manual, fragmented hiring with a single, structured pipeline. This reduces time-to-fill, minimizes miscommunication, and keeps your hiring funnel organized from candidate sourcing to offer acceptance.
Centralization is the foundation of this improvement. Every applicant, email, note, and interview decision sits in one system. Recruiters no longer dig through inboxes to find feedback. Hiring managers can view candidate pipelines without requesting updates. The candidate journey becomes visible to everyone who needs to see it.
Practical workflow automation handles repetitive tasks that slow down recruiting teams. When a candidate applies, they receive an automatic confirmation email. When they move to the interview stage, interviewers get calendar invites and reminders. When a hiring decision is made, the system sends acceptance or rejection messages. Task management becomes systematic rather than ad hoc.
Team collaboration improves significantly with a modern ATS. Recruiters and hiring managers leave feedback directly on candidate profiles. They can tag teammates and run structured scorecards instead of exchanging long email chains. Everyone works from the same information. This helps recruiting efforts stay aligned even when multiple people conduct interviews for the same role.
The candidate experience also benefits. Faster responses, clear status updates, and coordinated interview loops make your company appear more professional. Candidates spend less time wondering about their application status. They receive fewer duplicated questions during the interview process.
Integrating your ATS with tools like Slack or Microsoft Teams notifies hiring managers in real time when candidates move stages or accept offers. This keeps everyone informed without requiring constant logins to the ATS itself.
Core Benefits of Applicant Tracking Systems
The benefits of applicant tracking apply to both growing startups and established mid-sized companies. Organizations using an ATS report measurable improvements in time-to-hire, quality-of-hire, and overall recruiting efficiency. The impact scales with your hiring volume.
Here are the major benefits an ATS delivers:
| Benefit | Impact |
|---|---|
| Increased efficiency | Automation reduces manual tasks by 50-70% |
| Better sourcing | Single-click posting to multiple job boards |
| Improved engagement | Timely, consistent candidate communication |
| Higher quality hires | Structured evaluation reduces bias |
| Data-driven decisions | Recruitment metrics guide strategy |
Consider a concrete example: a 50-person SaaS team cut their average time-to-fill from 45 to 25 days. They achieved this by using automated job posting to multiple job boards and self-scheduling links for interview scheduling.
An ATS also creates a searchable talent pool. Strong candidates who were not hired for one role remain in your candidate database. When you open similar job openings later in 2025 or 2026, you can revisit these passive candidates without starting from scratch.
These benefits compound when you integrate your ATS into a broader tool stack. Connections to HRIS, payroll platforms, and communication tools create a seamless flow from recruiting process to onboarding process.
Increased Recruiting Efficiency
Automation replaces repetitive admin work so recruiters can spend more time talking to qualified candidates. Instead of copying job descriptions across platforms, sending individual emails, and chasing interviewers for feedback, the ATS handles these tasks automatically.
Specific tasks automated by modern ATS include:
- Multi-board job posting to Indeed, LinkedIn, ZipRecruiter, and career websites
- Parsing resumes to extract contact details, skills, and experience
- Email sequencing based on hiring stages
- Interview reminders sent to panelists
- Offer letter templates with e-signature integration
One recruiting team reported reducing manual email volume by 60% after deploying automated stage-based messaging. For every role, they saved hours previously spent on routine candidate communication.
Efficiency gains matter most for small teams where HR might also manage payroll, benefits, and employee administration. When you use payroll management and an ATS for hiring, each system handles its specialty without duplicating effort.
Better Candidate Sourcing and Screening
ATS tools widen the top of your hiring funnel and then help filter candidates intelligently.
Job syndication works from a single posting. You create one job requisition and publish it to Indeed, ZipRecruiter, LinkedIn, and your job page simultaneously. Job board integration eliminates the need to log into each platform separately. Social sharing and referral tracking are often built in, expanding your reach to job seekers across channels.
AI or rules-based filters can prioritize candidates using skills, experience, location, and other criteria. This helps recruiting teams focus on the best candidates first. However, human review remains critical. Over-reliance on keyword matching can miss non-traditional resumes from qualified applicants.
Compliance and fairness also improve with structured processes. Screening questions and standardized scorecards help reduce bias in early filtering. This supports DEI efforts and creates documentation for EEOC reporting requirements.
Improved Candidate Engagement
Candidate expectations changed significantly after 2020. People expect transparent, fast responses even when applying to multiple roles. Ghosting applicants damages your employer brand and reduces future applications.
ATS automation ensures every applicant receives confirmations, updates after interviews, and timely hiring decisions. No one falls through the cracks because a recruiter forgot to send a follow-up email.
Modern ATS platforms support multiple communication channels:
- Email with branded templates
- SMS for time-sensitive updates
- In-portal messaging for detailed communication
- Sometimes WhatsApp for international candidates
Consistent messaging keeps your employer brand professional. Candidates who feel informed are more likely to reapply for future roles, accept offers, and speak positively about your company online.
Higher Quality of Hire
Structured processes lead to more objective decisions and better long-term hires. An ATS provides the framework for consistent evaluation across all active candidates.
Interview scorecards live inside the ATS instead of scattered across individual notes. Interviewers answer standard questions and rate candidates on predetermined criteria. This reduces the influence of gut feelings and first impressions on hiring decisions.
The ATS maintains a historical record of feedback and outcomes. Over time, you can analyze which candidates succeeded and which churned quickly. This hire data helps you refine candidate profiles for future roles.
For example, a tech company might notice through ATS analytics that hires from employee referrals have 30% higher one-year retention than those from job boards. This insight reshapes where they focus candidate sourcing efforts.
Data-Driven Recruitment Strategy
Recruiting has shifted from intuition-only decisions to metrics-backed strategy. An ATS provides the data foundation for this shift.
Key recruitment metrics an ATS should surface include:
- Time-to-fill by role and department
- Cost-per-hire including advertising and agency fees
- Source-of-hire showing which channels produce top candidates
- Conversion rates between hiring stages
- Offer-accept rate
- Diversity metrics across the candidate journey
Dashboards should be customizable for different stakeholders. HR leaders need pipeline health views. Finance wants cost analysis. Hiring managers care about their specific roles. The best ats platforms let each user see relevant data without overwhelming them.
Smaller teams can start with a simple monthly report. As hiring volume increases, you can grow into more advanced analytics and reporting capabilities.
When to Implement or Upgrade Your ATS
Timing matters when implementing or upgrading your tracking system. Moving too early can be overkill for your hiring needs. Moving too late leads to burned-out recruiting teams and poor candidate experience.
Typical trigger points for a first ATS include:
- Growing beyond 20 to 30 employees
- Hiring more than 5 to 10 roles per quarter
- Running multiple roles with several interviewers simultaneously
- Receiving complaints about slow or confusing application process
When evaluating whether to upgrade versus optimize your current ATS, look for clear signals. Outdated UX, missing integrations, and weak reporting suggest an upgrade. Poor adoption despite adequate features suggests training or reconfiguration.
Base upgrade decisions on real data. Track your time-to-fill, survey hiring manager satisfaction, collect candidate feedback, and identify integration gaps with HRIS or payroll systems.
5 Signs You Should Upgrade Your ATS
Use this checklist to evaluate whether your current system meets your needs:
Sign 1: Recruiters live in spreadsheets and email despite having an ATS. This indicates adoption issues or poor usability. If your team avoids the system, it is not serving its purpose.
Sign 2: Reporting is manual or impossible. You cannot quickly answer questions like “How long does it take us to hire an SDR?” or “Which source gives our best engineers?” without exporting data and building spreadsheets.
Sign 3: Candidates complain about confusing processes. They encounter duplicate forms, lack of communication, or unclear next steps. This damages your employer brand and reduces quality applications.
Sign 4: Your ATS lacks integration with tools adopted after 2022. If you added new HRIS, payroll, background check, or communication tools that do not connect to your ATS, you face manual data entry and duplicate work.
Sign 5: You expanded into new regions or remote hiring. Your current ATS cannot handle multiple locations, currencies, or compliance requirements for international talent acquisition.
Making the Most of Your Current ATS Before Switching
Before committing to a costly migration, take steps to optimize your existing system.
Start by reviewing vendor training materials released since 2023. Many ATS platforms have added features that existing customers never enabled. Check for automation capabilities, new integrations, and improved workflows.
Clean up your job templates and pipelines. Remove unused stages, update outdated job descriptions, and standardize your workflows. Often, poor performance comes from messy configuration rather than platform limitations.
Integrate your ATS with communication tools. Connecting to Slack or Microsoft Teams for notifications can significantly improve perceived performance without switching vendors.
Run a 60 to 90 day optimization sprint before deciding to switch. Measure improvements in time-to-fill and candidate feedback. If numbers improve meaningfully, your current ATS may be adequate. If not, you have data to justify a change.
Key ATS Features That Really Matter
Feature lists can be overwhelming when evaluating ATS platforms. Focus on must-haves versus nice-to-haves for your specific hiring needs.
Group features into practical categories:
| Category | Must-Have Features |
|---|---|
| Core management | Customizable pipelines, candidate profiles, resume parsing |
| Automation | Job syndication, email sequences, stage triggers |
| Scheduling | Calendar integration, self-scheduling, time zone support |
| Collaboration | Scorecards, shared notes, role-based permissions |
| Integrations | HRIS, payroll, background checks, e-signature |
| Analytics | Time-to-fill, source tracking, diversity reporting |
| Compliance | GDPR consent, EEOC logs, audit trails |
Prioritize usability and adoption over sheer feature count. A slightly simpler tool that everyone uses beats a complex platform that no one opens. During demos, test concrete scenarios like Google Calendar integration, Slack notifications, and GDPR consent forms.
Core Applicant Management and Workflow
Essential features for daily recruiting include customizable pipelines with drag-and-drop candidate stages. You should be able to filter candidates by status, source, or custom tags. Bulk actions let you move multiple candidates or send mass communications efficiently.
Workflows should reflect real-life hiring in 2025. Create separate stages for hiring manager screen, technical interview, take-home assignment, panel interview, and offer. Each stage can trigger specific actions and notifications.
A clean, intuitive UI matters for occasional users. Hiring managers who log in once a week should navigate quickly without training. If they struggle, they will fall back to email and bypass the system entirely.
Automation, Scheduling, and Communication
Automated interview scheduling reduces recruiter workload and improves candidate experience. Candidates appreciate self-scheduling links that respect their time preferences.
Must-have scheduling features include:
- Calendar integrations with Google Workspace and Microsoft 365
- Self-scheduling links with available time slots
- Automatic time zone handling for remote candidates
- Interviewer load balancing to prevent burnout
Communication automation handles stage-based emails, SMS updates, and reminders. Templates should be customizable to match your employer brand tone. Avoid generic, robotic messages that make candidates feel processed rather than valued.
Use automation carefully for final-stage candidates. Personal touches matter more when you are close to extending an offer.
Collaboration Tools for Hiring Teams
Cross-functional hiring requires shared information access. Look for these collaboration features:
- Shared notes visible to authorized team members
- Private feedback options for sensitive comments
- Interviewer scorecards with structured rating scales
- Approval workflows for offers and hiring decisions
Role-based permissions are essential. HR sees everything. Hiring managers see their roles. Executives see summary dashboards. External recruiters see only assigned candidates. This protects candidate data and prevents information overload.
Integrations with Slack or Microsoft Teams surface key events like “offer sent” or “candidate accepted” in real time. Hiring team members stay informed without logging into the ATS constantly.
Integrations With HR, Payroll, and Support Platforms
Integrations matter because they reduce manual steps, eliminate duplicate data entry, and smooth the transition from candidate to employee.
Typical ATS integration connections include:
- HRIS platforms like BambooHR or Workday
- Payroll systems for seamless new hire data transfer
- E-signature tools for offer letters
- Background check providers for pre-employment screening
- Identity verification services for compliance
SaaS and support teams often design workflows where new hires created in the HRIS automatically receive the right system access and training assignments. If you use payroll and employee management, look for ATS platforms that connect smoothly to transfer new hire data without manual re-entry.
Prioritize ATS vendors with open APIs and well-documented integrations. This provides long-term flexibility as your tool stack evolves.
Reporting, Analytics, and Compliance
Robust reporting helps HR leaders, founders, and finance plan headcount and budgets based on real data rather than estimates.
Concrete reports to look for:
- Pipeline health showing candidates at each stage
- Source effectiveness ranking which channels produce best candidates
- Interviewer calibration identifying lenient versus strict scorers
- Diversity reporting across hiring stages
Compliance features needed in 2025 include GDPR and CCPA data handling, EEOC reporting templates, structured consent management, and audit logs of hiring decisions. These protect your organization from legal risk and support fair hiring practices.
Smaller companies should look for out-of-the-box reports that work immediately. Larger organizations may need custom dashboards and export options for business intelligence tools.
How Much Does an Applicant Tracking System Cost?
ATS pricing in 2025 scales by company size, number of roles, or recruiter seats. Different models suit different organizational needs.
Realistic annual cost ranges:
| Company Size | Typical Annual Cost |
|---|---|
| Lean startup (under 50 employees) | $1,500 to $6,000 |
| Mid-sized company (50 to 200 employees) | $8,000 to $40,000 |
| Large enterprise (500+ employees) | $100,000+ |
Four common pricing structures exist:
- Per recruiter seat: Suits companies with dedicated recruiting teams
- Per employee headcount: Scales with company growth
- Per job posting: Works for moderate hiring with predictable volume
- Flat subscription tiers: Simple budgeting with unlimited jobs within tier
Factor in additional costs beyond the base subscription. Implementation fees range from minimal to substantial. Training may be included or extra. Premium support tiers cost more. Data migration from older systems requires effort and sometimes professional services.
When evaluating ROI, consider savings beyond the subscription line item. Reduced agency fees, faster time-to-fill, and better retention generate measurable value. An enterprise plan might seem expensive until you calculate that it eliminates $50,000 in annual agency spend.
Where Applicant Tracking Systems Are Heading
Looking ahead to 2026 and 2027, ATS platforms continue evolving based on trends visible in systems updated between 2022 and 2025.
Key trends shaping ATS development:
- Deeper automation reducing recruiter administrative burden
- AI-powered analytics for pattern recognition and scoring
- CRM-like candidate relationship features for long-term engagement
- Richer ecosystems of integrations connecting hiring to HR operations
- Continuous UX refinement for better adoption
These trends translate to practical outcomes: less admin work, more personalized candidate communication, and better long-term talent pipelines for top talent.
Smarter and More Flexible Scheduling
AI-assisted scheduling now proposes optimal interview panels, avoids conflicts, and respects interviewer bandwidth limits. The system learns preferences and makes intelligent suggestions.
Candidate self-scheduling handles rescheduling without human intervention. Complex multi-step interview loops commonly used in SaaS and engineering hiring are easier to coordinate.
Scheduling is becoming a differentiator for distributed and remote-first companies. Organizations hiring across multiple time zones need smart tools that handle complexity automatically.
AI-Powered Analytics and Decision Support
Dashboards increasingly use AI to surface patterns that humans might miss. The system might identify that roles routinely stall at the technical screen stage or that certain sources produce longer-tenured hires.
However, AI recommendations depend heavily on clean, unbiased historical data. Organizations must ensure their training data does not encode past discrimination. Human oversight must remain central to final hiring decisions.
Regulatory attention is growing. Ensure any AI tools comply with emerging guidelines on automated decision-making and algorithmic fairness.
From ATS to Talent Relationship Management
ATS tools are absorbing CRM-like features for ongoing candidate engagement. Nurture campaigns keep silver-medalist candidates warm. Talent pools organize passive candidates by skill and interest. Long-term relationship tracking spans months or years.
Companies with ongoing hiring needs for support teams, sales team members, or engineering roles benefit from this always-on talent pipeline. Instead of starting from scratch with every job opening, you tap into relationships you have already built.
Integrated communication across email, SMS, and sometimes in-product messaging keeps talent engaged between active searches.
Connected Hiring Ecosystems
ATS is increasingly one layer in a connected stack that includes HRIS, payroll, learning tools, and operational platforms.
Prioritize ATS vendors that offer native integrations and open APIs. Avoid getting locked into closed ecosystems that limit future flexibility.
Example workflow: A candidate hired as a support agent automatically appears in your HRIS, receives payroll setup, and gets enrolled in product training modules. The transition from “qualified candidate” to “productive employee” happens smoothly.
Everyday UX Improvements
Small UX refinements have big impact on busy teams. Cleaner pipelines, fewer clicks to move candidates, better mobile views, and faster loading times all matter.
UX is especially crucial for hiring managers and founders who use the tool occasionally. If the interface frustrates them, they will fall back to email and spreadsheets regardless of features.
During ATS demos, check mobile usability and ease of basic tasks. Test how quickly you can schedule interviews, leave feedback, and move a candidate to the next stage.
How To Choose the Right Applicant Tracking System
ATS selection is a multi-year decision that should align with your hiring plans, tech stack, and company culture. Take a structured approach rather than choosing based on demos alone.
Step-by-step selection process:
- Define requirements based on your current and projected hiring needs
- Shortlist 3 to 5 vendors that fit your size and budget
- Run structured demos with realistic scenarios
- Request a 14 to 30 day trial when possible
- Gather feedback from recruiters, hiring managers, and interviewers
Assess UX, automation depth, integration readiness, data security, and vendor roadmap. Feature matrices tell only part of the story. Ask about implementation timelines and ongoing support.
Involve hiring managers and sample interviewers in evaluation. The chosen tool must match day-to-day workflows for people who are not full-time recruiters.
Questions To Ask During ATS Demos
Ask practical, specific questions that reveal real strengths and weaknesses:
Implementation questions:
- What is your typical go-live timeline for a 50 to 200 person company?
- How do you handle migration from spreadsheets or another ATS?
- What training is included in the base price?
Integration questions:
- Which HRIS, payroll, and background check tools integrate natively as of 2025?
- Do you have a documented API for custom connections?
- How do integrations with Payrun or similar payroll platforms work?
Automation questions:
- Which workflows can be configured without code?
- Can non-technical HR staff update automation rules?
- What happens when automation fails or errors occur?
Analytics questions:
- What standard reports exist out of the box?
- Can we build custom reports without technical help?
- How easily can we export data to business intelligence tools?
Roadmap questions:
- What major features are planned for the next 12 to 24 months?
- How are requests from small and mid-sized customers prioritized?
- How often do you release updates?
How ATS and Payrun Work Together in Growing Companies
While an ATS focuses on recruiting, Payrun focuses on payroll management, expense tracking, leave management, and employee administration. Together, they cover both hiring and managing employees effectively throughout their tenure.
Consider a realistic scenario: A SaaS startup uses an ATS to hire support agents, manage their candidate pipelines, and schedule interviews. Once candidates accept offers, new hire data transfers to Payrun for payroll setup, leave management configuration, and employee profile creation.
Structured hiring data from your ATS becomes valuable in Payrun. Skills, languages, seniority level, and role details help configure appropriate payroll settings, leave policies, and administrative groupings. This data-driven approach reduces manual data entry during onboarding.
Many Payrun customers integrate their ATS with HR and payroll systems to create a smooth journey. A candidate becomes a productive team member without friction between systems or repeated data collection.
Consider your whole employee lifecycle when selecting tools. The ATS handles talent acquisition. Payrun manages payroll, expenses, timesheets, and ongoing HR workflows. HRIS tracks core employee records. When these systems work together, you manage people, processes, and growth with confidence and clarity.
FAQs
Do small businesses with fewer than 30 employees really need an ATS?
Very small teams hiring only a few roles per year can start with structured spreadsheets and email templates. However, once you manage multiple concurrent roles or recurring hiring for positions like support agents or sales reps, an ATS usually pays off within a year. Lightweight ATS tools launched after 2020 are specifically designed for startups with moderate hiring needs, often offering free trials and simple setup.
How long does it take to implement an ATS?
For small to mid-sized organizations with 20 to 300 employees, a modern cloud-based ATS can usually be configured and live in 1 to 4 weeks. This includes basic training for recruiters and hiring managers. Complex migrations from legacy systems, custom workflows, or multi-country setups may extend this to 6 to 12 weeks. Most vendors provide implementation support as part of onboarding.
Can an ATS integrate with my existing HR and support tools?
Most modern ATS platforms offer integrations with popular HRIS, payroll, background check, and communication tools. Many expose APIs for custom connections when native integrations are unavailable. Companies using Payrun can design workflows where new hires created in the ATS automatically flow to payroll setup and employee management without duplicate applicant information entry.
How do I prevent my ATS from unfairly filtering out good candidates?
Over-reliance on keyword filters or rigid rules can hide strong candidates from non-traditional backgrounds. Keep filters moderate and always review a sample of lower-ranked applications manually. Combine automation with structured human review. Regularly audit which candidates are rejected early and update criteria to align with real-world success profiles from your hire data.
Is an ATS secure enough for storing candidate data?
Reputable ATS vendors implement encryption, role-based access control, audit logs, and data residency options to comply with regulations like GDPR and CCPA. Before signing with any vendor, ask for security documentation, compliance certifications such as SOC 2, and clear data retention and deletion policies. Ensure you understand how candidate data is protected and who has access within your organization.
