The ATS guide for small businesses that don't want to overbuy
An increasing number of startups, scale-ups and SMEs are turning to applicant tracking software (ATS) to fix their hiring process.
They start looking for it when their old hiring approach is falling apart: recruiting teams can't keep up with rising hiring volumes. Candidates get scattered across spreadsheets and inboxes. Hiring managers don't know what to do or when to give feedback. Reporting takes manual work. Candidate data becomes harder to manage.
Applicant tracking software can solve these issues. But only if companies buy a system based on their needs and fit rather than popularity.
In this guide, you'll discover what ATS recruitment software is, how it works, whether and when your company needs it, which features matter and how to choose a system that supports your hiring process without becoming an operational burden.
Who this guide is for: founders, HR teams, recruiters, hiring managers at growing companies
What is an applicant tracking system exactly?
Quick answer
Applicant tracking software, also known as an applicant tracking system or ATS, helps companies manage their hiring process. At its core, an ATS stores candidate data, job applications, interview feedback, hiring stages, and communication history. It enables recruiters, hiring managers, and leadership to work from the same system and process.
Hiring often starts informally at a growing company: a founder posts a role, candidates arrive via email, someone creates a spreadsheet and hiring managers share feedback in Slack or meetings. That works when hiring volume is low.
But once hiring volume increases, and more candidates and hiring managers get involved, informal hiring systems crumble under pressure. That's where the real value of applicant tracking software lies. It systemises the hiring process, automates repetitive tasks and provides visibility into hiring progress and bottlenecks.
An ATS tool supports tasks such as:
publishing job openings
collecting applications
storing candidate records
tracking candidates through hiring stages
assigning tasks to recruiters and hiring managers
collecting interview feedback
scheduling interviews
managing candidate communication
reporting on hiring performance
managing candidate-data permissions and retention
Not every feature is valuable for every company. The right features are the ones that solve your hiring bottlenecks.
How does applicant tracking software work?
Applicant tracking software helps recruiters and hiring managers manage applications, candidate profiles, interview feedback, tasks, communication, and hiring stages in a single shared system.
The hiring workflow starts with a recruiter creating a job post in the ATS. The recruiter opens a role and publishes it across various channels. Next, the candidates enter the ATS by applying for the job via an application form, agency submission, or are added manually by a recruiter.
As soon as a candidate enters the ATS, the system creates a profile that usually includes the CV, application responses, notes, communication history, interview feedback, and hiring status in the pipeline. Some ATS tools automatically analyse CVs and offer AI-assisted matching to help recruiters review applications.
Hiring managers and recruiters can then manage the candidates and move them through the hiring pipeline. The stages of the pipeline are usually configurable and may include applied, screened, first interview, final interview, offer, and hired or rejected. The pipeline ideally reflects the stages the candidate goes through.
All these steps generate work. To conduct a first interview, you need to schedule it, prepare questions or a script, create scorecards to evaluate responses, and provide feedback afterwards. The ATS helps manage the work around these tasks.
Applicant tracking software also enables hiring teams and leadership to have an overview of the entire hiring pipeline and hiring progress. Recruiters can see which candidates are awaiting action; hiring managers can leave notes and provide feedback at each stage; and leadership can track hiring progress, candidate flow, and hiring bottlenecks.
In short, applicant tracking software integrates job posting, candidate intake, resume parsing, screening, collaboration, communication, and reporting into a single hiring workflow.
Signs you need applicant tracking software
Nothing screams "I need an ATS" more than when you're struggling with Excel spreadsheets and inboxes trying to manually manage a hiring process. Or when you lose track of your candidates, when hiring managers are often late with feedback, or when reporting requires spreadsheet work and candidate data becomes harder to manage responsibly.
The consequences of these issues can hamper your company's growth: Candidates might fall through the cracks, making positions harder to fill, posting jobs might take too much manual work, and you could struggle with gathering data when leadership asks for reporting.
Applicant tracking software can help you bring structure to your hiring process. It centralises candidate data, improves pipeline visibility, standardises feedback and makes the hiring process easier to track and manage.
Signs you don't need applicant tracking software
But an ATS tool can also be overkill. If your hiring volume is low, you receive few applicants, your candidates are easy to track, your hiring process is straightforward and a one-person operation, you most likely don't need applicant tracking software.
That's when a simple Excel sheet or lightweight project management tool may be enough for now. But closely monitor your hiring situation. Hiring volumes can increase without warning and become more collaborative or compliance-sensitive, making manual systems inefficient. The right time to get an ATS tool is usually when hiring management becomes a recurring operational issue. Discover whether you need an ATS in the article "Does your growing company actually need an ATS?"
How does applicant tracking software benefit recruiters?
Recruiters usually start looking for applicant tracking software when the manual way of doing things becomes too difficult. There's rarely a single reason. It might start with candidate records being scattered, hiring managers being late with feedback, no one knowing which candidates are still active, and many other bottlenecks.
Applicant tracking software can solve these issues by making the hiring process more visible, organised and repeatable.
Benefit 1: Applicant tracking software centralises candidate data
Centralisation is the most basic benefit of applicant tracking software. It stores candidate data in one place, making it easier for you to see who applied for which role, where candidates are in the process and what has already happened.
This is a welcome improvement from information getting scattered across inboxes, spreadsheets and message threads. Especially when hiring volumes are high or when several people need access to the same info.
Benefit 2: Pipeline visibility
ATS makes it easier for you to see the status of open roles and candidates. It allows you to see which candidates need to be screened, which need feedback, which interviews are scheduled, and where the hiring process is slowing down. This is necessary when multiple people handle the hiring process. If your process is still easy enough to manage in one shared document, this might be overkill.
Benefit 3: Feedback becomes consistent
Feedback is often given late, through multiple channels and without consistent criteria. Applicant tracking software can solve this. It does so by offering scorecards, structured notes, task assignments and reminders. This doesn't make hiring better per se, but makes feedback consistent when multiple hiring managers and interviewers are involved.
Benefit 4: Less manual work, more time for recruiting
The higher the hiring volume, the harder it becomes for recruiting teams to coordinate. Applicant tracking software automates repetitive manual tasks such as chasing feedback, scheduling interviews, reminding managers, and updating spreadsheets. This frees up time for you to improve your hiring process rather than maintaining it.
Benefit 5: Better reporting
A scattered hiring process usually leads to poor data and reporting. If candidate information is dispersed across spreadsheets and inboxes, recruiting teams will struggle to understand what's really happening in the process.
This is where the value of an ATS lies. It can reliably produce reports on open roles, candidates by stage, source performance, time-to-hire, and other KPIs, if data is consistently updated and clean.
Benefit 6: Improved candidate-data control
Between CVs, contact details, interview notes and assessment results, recruitment teams have a lot of data to handle responsibly. Applicant tracking software can help by managing permissions, retention settings, consent, deletion or anonymisation workflows and audit trails. These features are especially important for companies operating in Europe.
Recommended next read: "Does Your Growing Company Really Need Applicant Tracking Software?"
Features to look for in a modern applicant tracking software
Many applicant tracking software providers provide a similar set of features. What sets them apart is how advanced, usable, and configurable their features are. For growing companies, the goal isn't to choose the ATS with the most features. It's to get the ATS with features that solve its bottlenecks.
Candidate data storage
The core features of ATS recruiting software is candidate data storage. All ATS tools store data such as CVs, contact details, application answers, and hiring status in one place. While useful when candidates are scattered across inboxes and spreadsheets, it can be overkill if you only manage a handful of candidates.
Resume checking and candidate screening
Many applicant tracking systems can scan CVs and extract data, helping recruiters review applications more efficiently. Some of them can even perform candidate matching, automatically rank CVs, or review them using AI-assisted features.
But despite the added value of these screening features, recruiters need to remain cautious. AI-assisted screening saves time, but shouldn't replace the recruiter's judgment. Teams need to understand how the ATS evaluates CVs, whether it can explain its recommendations and how it helps reduce unfair and biased filtering.
Pipeline management
Applicant tracking software provides recruiters with an overview of the entire pipeline and helps teams move candidates through the hiring stages.
While simple ATS tools may offer a basic pipeline, more advanced systems may support custom stages, role-specific workflows, stage-specific tasks, and automation.
This is especially useful when multiple people need visibility into where candidates are in the process and what needs to happen next.
It may be overkill to prioritise advanced workflow customisation if most roles follow the same simple process.
Job posting and careers page
One of the core features of many ATS is job posting to a careers page and job boards. This is useful when you post roles frequently or want a steady flow of applications.
Interview scheduling
With features such as calendar integration, self-scheduling, interviewer notifications and interview reminders, applicant tracking software helps coordinate interviews between candidates, recruiters and hiring managers. This is helpful when recruiters spend a lot of time manually scheduling interviews.
Feedback and scorecards
ATS tools with feedback features help recruiting teams gather structured and standardised input after interviews. They help ensure that hiring managers provide timely feedback and that both recruiters and hiring teams use the same criteria to assess candidates.
Workflow automation
When recruiters spend too much time performing repetitive recruiting admin, automation is a welcome feature. Many applicant tracking systems automate tasks such as task reminders, candidate status updates, rejection emails, and scheduling notifications.
Despite the clear benefits, recruiters need to remain careful. An ATS doesn't fix a broken workflow. It automates it, with all its strengths and flaws. Make sure to simplify and fix the bottlenecks in your hiring process before automating it.
Reporting and analytics
Most applicant tracking systems offer reporting features. Common reports include open roles, candidates by stage, source performance, time-to-hire, time-in-stage, drop-off, and offer acceptance. Advanced analytics give leadership the necessary visibility into hiring performance, but only when recruiting teams maintain clean pipeline data.
Integrations
Applicant tracking software only adds value if it integrates with other tools in your hiring stack. Integrations such as email, calendar, job boards, HRIS, onboarding tools and communication tools are common and often necessary. The integrations you need depend on your hiring process, but weak integrations create manual work, unnecessary admin or duplicate data entry.
Compliance and data controls
As candidate volume grows and several people can access candidate data, compliance features play an increasingly larger role. Features such as permissions, role-based access, data retention settings, consent management help companies manage candidate data responsibly.
Recommended read: find out more about ATS features in the article "Applicant tracking software features: which ones do you actually need"
How to choose the best applicant tracking software for your growing business
Teams looking for applicant tracking software often dive into the features list head first. Unfortunately, this often leads to teams overbuying enterprise-sized software.
Instead, teams should list the bottlenecks in their existing hiring process. Are candidates getting lost across inboxes and spreadsheets? Are hiring managers late with feedback? Is reporting unreliable?
The next step is to translate these bottlenecks into ATS requirements. Slow feedback may require reminders, task assignments and structured scorecards. Poor reporting may require cleaner pipeline stages, source tracking and dashboards. Scattered candidate data may require centralised profiles, permissions and retention settings.
These steps help you evaluate applicant tracking software based on fit, not feature depth. Without these steps, every ATS vendor could make every feature seem important.
Read more about it in our article "How to choose the best applicant tracking software for your startup, scale-up or SME"
Step 1: Find and list your bottlenecks
This step is often overlooked by recruiting teams. However, listing your bottlenecks leads to a better-fitting ATS for your business.
Step 2: Turn your bottlenecks into requirements
After listing your bottlenecks you can turn them into concrete requirements for your ATS. We've compiled a list of common bottlenecks and their corresponding requirements in our article on "how to choose the best applicant tracking software for your startup, scale-up or SME"
Step 3: Right-weight fit: ensure the ATS isn't too light or too heavy
When buying software, many teams either overshoot and end up buying tools that are hard to implement and use, or go for lightweight applicant tracking software that doesn't address their needs and stops working when hiring volumes rise. We've developed the right-weight framework to help you avoid both mistakes.
Discover the right-weight framework in the article about choosing the best applicant tracking software for your company.
Step 4: Use your company stage as a shortlist filter, not as the final decision
Your company's stage can be a useful criterion when shopping for ATS. But it shouldn't determine the final decision. The company stage alone isn't enough. A startup with high hiring volume might need more advanced workflows than an SME hiring occasionally.
Step 5: Evaluate ATS vendors with scenarios and scorecards
Most teams ask vendors whether they offer a certain set of features. But that could lead to vendors running a demo during which they show their product at its best. To avoid that, ask each vendor how their ATS tool handles realistic hiring scenarios. You can find the full list of scenarios in the selection guide on "how to choose the best applicant tracking software".
Step 6: Score each vendor after the demo
Use the same criteria to score every ATS. You'll find a scorecard here. It will help you score the ATS based on whether it can support your real hiring process at the right weight.
Best applicant tracking software by company stage
While many companies look for "ATS for startups" or "applicant tracking software for small business", your company's stage shouldn't be the main criterion for choosing an ATS.
You can, however, use it to weed out enterprise-sized ATS tools and those that are too light from your longlist and build a shortlist. To choose an applicant tracking system, use your hiring volume, hiring process complexity, hiring manager adoption, reporting needs and implementation capacity as criteria. In short, your company's stage should help the search, and the fit helps you decide.
The best applicant tracking software for startups
An early-stage startup that hires occasionally and builds its first hiring process is best off with lightweight applicant tracking software that offers basic features like candidate centralisation, pipeline visibility and task management, among others. Here are some ATS tools you might want to consider for a startup:
Breezy HR
JazzHR
Recruitee
Teamtailor
Homerun
Workable, but only if hiring volume is already high
Discover which tools aren't suitable for startups in the article about finding "The best applicant tracking software for your growing company".
The best applicant tracking software for scale-ups
Scale-ups with complex hiring processes, and high hiring volume involving multiple managers across teams need an ATS tool that is light and nimble enough to implement easily and strong enough to support hiring growth. Here are some ATS tools you might want to consider:
Ashby
Recruitee
Teamtailor
Workable
Applicant tracking software for SMEs
Most hiring teams at SMEs are small. And they need applicant tracking software that reduces admin, organises candidate data, and is user-friendly. The ATS should be practical, easy to maintain and strong enough to support basic reporting, integrations and candidate-data controls. Here are some examples of tools you might want to consider:
Workable
Recruitee
Teamtailor
Pinpoint ATS
How to evaluate applicant tracking software vendors
Most teams looking for ATS allow vendors to give pretty generic demos. They ask for features which the vendor then uses to showcase their tool the best way possible. Instead, present realistic scenarios and ask how the tool would handle those situations. Here are some situations you can present:
- a candidate enters the pipeline
- a hiring manager is late with feedback
- interviews need to be scheduled
- leadership wants to see where hiring is stuck
- a candidate asks for their data to be deleted
- your hiring process changes after six months
For the full scenario list and demo questions, read the selection guide.
How to compare an applicant tracking software
Use the same criteria to score every ATS. You'll find a scorecard here. It will help you score the ATS based on whether it can support your real hiring process at the right weight.
For a comparison of the most common applicant tracking software, read our guide on the best ATS for small businesses.
How much does applicant tracking software cost?
Prices vary widely. Lightweight ATS tools like Manatal list plans that start at around $15 per user/month up to $55 per user/month on annual billing, while Breezy HR offers plans from $157/month to $439/month on annual billing, or $189/month to $529/month on monthly billing. Workable's prices are higher with plans ranging from $299/month to $719/month for companies with up to 20 employees. Zoho Recruit even offers a free plan. Vendors like Recruitee, Lever, Greenhouse and Teamtailor don't publish fixed prices. Their pricing is available on request.
On top of the sometimes hefty subscription fees, you might have to pay for add-ons such as texting, video interviews, assessments, onboarding, AI credits, extra users, premium support, implementation or data migration.
Workable charges from $89/month for texting, while Breezy HR sells SMS credits from $41/month. Roughly speaking, a small business should expect to pay anywhere from $50 to $300 per month for a lightweight ATS, $300 to $700 per month for a more complete recruiting platform and $700+ per month for more advanced systems. The actual budget depends on hiring volume, number of users, active jobs, integrations, reporting needs and implementation support.
Applicant tracking software implementation: what to expect
Once you choose applicant tracking software, it's time to actually implement and use it. Even if your system is lightweight, someone has to turn it into a working hiring tool by executing a set of common implementation tasks:
configuring hiring stages
creating job templates
setting permissions
migrating candidate data
connecting email and calendar
integrating job boards or HR systems
creating feedback forms or scorecards
setting up reporting
training recruiters and hiring managers
defining ownership after launch
How much effort this will take depends on the complexity of the software and the maturity of your hiring process.
Got more questions about ATS? Discover the answers in the FAQs.
What is applicant tracking software?
Applicant tracking software is software that helps companies manage job applications, candidate records, hiring stages, feedback, communication and reporting. It is also known as an applicant tracking system or ATS.
What does applicant tracking software do?
Applicant tracking software helps companies collect applications, store candidate records, manage hiring stages, coordinate feedback, schedule interviews, communicate with candidates and report on hiring performance.
Why do companies use applicant tracking software?
Companies use applicant tracking software to make hiring more organised, visible and repeatable. The software can reduce manual coordination, centralise candidate records, improve collaboration with hiring managers and provide better hiring data.
Is applicant tracking software only for large companies?
No. Large companies often use more advanced systems, but startups, scale-ups and SMEs can also benefit from applicant tracking software when hiring becomes difficult to manage manually. The important question is not company size. It's hiring complexity.
When should a small business get applicant tracking software?
A small business should consider applicant tracking software when hiring becomes hard to manage through spreadsheets, email or manual follow-up. Common signs include lost candidates, slow feedback, inconsistent communication, manual reporting and candidate-data issues.
Can a small business use applicant tracking software?
Yes. A small business can use applicant tracking software if hiring involves multiple candidates, hiring managers, roles or compliance requirements.
However, a small business should avoid software that is too heavy for its process. Lightweight applicant tracking software may be enough if hiring volume is low.
What are the main benefits of applicant tracking software?
The main benefits of applicant tracking software include centralised candidate records, better pipeline visibility, more consistent feedback, less manual coordination, improved reporting and stronger candidate-data control.
What features should applicant tracking software have?
Applicant tracking software should usually support candidate records, pipeline management, feedback collection, candidate communication, reporting, integrations and data controls. The exact features you need depend on your hiring bottlenecks and process complexity.
Can applicant tracking software improve candidate experience?
Yes, applicant tracking software can improve candidate experience if it helps your team communicate clearly, schedule efficiently, avoid delays and keep candidates informed. But poor automation or inconsistent use can make the experience feel robotic or impersonal.
Does applicant tracking software include AI resume screening?
Some applicant tracking software includes resume parsing, screening questions, candidate matching or AI-assisted resume review. These features can help recruiters process high application volumes faster.
However, AI resume screening should be used carefully. It should support recruiters, not replace human judgement. Before using automated screening, companies should understand how candidates are evaluated, whether recommendations are explainable and how the process avoids unfair filtering.
What is the difference between applicant tracking software and an HRIS?
Applicant tracking software focuses on recruiting and hiring. It helps manage candidates, applications, interviews, feedback and hiring workflows.
An HRIS focuses on employee data and HR administration after someone joins the company. Some platforms include both applicant tracking and HRIS functionality, but the depth of recruiting features can vary.
What is the difference between applicant tracking software and a recruitment CRM?
Applicant tracking software manages active hiring processes. A recruitment CRM helps manage candidate relationships, talent pools and longer-term nurturing.
Some modern recruiting platforms combine applicant tracking software and CRM functionality.
How much does applicant tracking software cost?
Applicant tracking software pricing varies depending on the vendor, company size, number of users, number of jobs, feature depth, integrations, support and implementation needs.
When comparing cost, do not only look at the subscription fee. Also consider implementation, training, integrations, internal admin time and maintenance.
How long does applicant tracking software implementation take?
Implementation time depends on system complexity, data migration, integrations, workflow configuration and training needs.
Lightweight applicant tracking software can often be implemented faster than a highly configurable system. But even a simple system requires clear ownership and setup.
Can applicant tracking software help with GDPR?
Applicant tracking software can help support GDPR-related processes if it includes permissions, consent management, retention settings, deletion or anonymisation workflows and audit trails.
But software alone does not make your company compliant. You still need clear policies, responsible data handling and consistent use of the system.
How do I choose between applicant tracking software vendors?
Start with your hiring bottlenecks, translate them into requirements and test vendors with real hiring scenarios. Do not choose based on feature lists alone. Choose the vendor that fits your hiring volume, process complexity, adoption needs, reporting requirements and implementation capacity.
What is the best applicant tracking software for growing companies?
The best applicant tracking software for a growing company is the one that fits its hiring process.
A startup may need a lightweight system. A scale-up may need stronger workflows and reporting. An SME may need usability, governance and practical implementation. The best choice depends on hiring volume, process complexity, adoption needs, reporting requirements and implementation capacity.
Want to know more about ATS?
Read these articles.
Written by Axel Kapinga
Axel Kapinga is the founder of HiringOpsGuide. He helps growing companies make clearer HR tech decisions by breaking down applicant tracking software, recruiting tools and hiring workflows into practical, vendor-neutral guides. His work focuses on right-weight software selection: choosing systems that are strong enough to solve real hiring bottlenecks, but light enough for teams to implement, use and maintain.