Applicant Tracking System (ATS) Guide: What HR Needs to Know

An Applicant Tracking System (ATS) is essential software for modern HR departments, designed to streamline the entire recruitment and hiring process. It serves as a central database for all candidate information, helping hiring teams efficiently manage applications from posting jobs to making offers. For any organization struggling to organize its talent pool and find the right candidates quickly, an ATS is the solution to replace manual, time-consuming tasks.

If you want to know more about the process of ATS recruitment and learn how to optimize the process, continue reading.

Contents

• HR ATS and recruitment
• What is an ATS?
• Core ATS Features and How They Help HR Managers
• Choosing the Best ATS for Your Business
• Try application tracking software for free ✅

HR ATS and Recruitment

Hiring the right employees that will support the future growth of your company is not an easy task. Whoever you wish to incorporate into your team must fit the needed profile. It’s essential they have the characteristics to perform the functions of their role and also the capacity to solve the problems for which they have been hired to solve.

Before beginning the selection process, the company must complete a principal planning phase. This involves analyzing the vacancy in detail, including:

• How many positions are there?
• Which characteristics do you require?
• What is the company looking for from the person in this role?
• What are the functions of the role?
• Which profile are you looking to hire?

Above all, one of the most important things a company must do before recruiting is to set a budget. A clear budget allows you to manage your applicant hiring in a way that ensures the company experiences no losses.

If you’re an HR admin, we know that finding time for recruitment is difficult. For this reason, ATS technology was born. If you’re a company that plans to hire employees and/or post a variety of roles, it’s worth looking into an ATS. Thanks to applicant tracking software, companies are able to manage the hiring process better and optimize and automate the process as much as possible.

What is an Applicant Tracking System (ATS)?

Simply put, ATS software is a tool used to help companies, big and small, facilitate the job of the hiring manager when it comes to recruitment and selection.

An applicant tracking system acts as a central database for job applicants, automating and managing workflows associated with the entire hiring journey. It collects and organizes candidate information, allowing recruiters to screen applicants, schedule interviews, and track progress in one place, leading to a more efficient process.

According to a 2024 report, 78.5% of recruiters using an ATS reported an improvement in the quality of candidates they hire. This data shows that companies using ATS software to optimize their hiring process are more likely to succeed in capturing top talent.

Core ATS Features and How They Help HR Managers

An ATS aids HR managers by automating manual processes and centralizing recruitment data. Key features transform the hiring cycle:

• Centralized Candidate Database: Prevents lost resumes and disorganization by keeping all applicant information, job postings, and talent pools in a single, searchable system.
• Automated Communication: Improves the candidate experience by sending automated updates, acknowledgments, and rejection notices, ensuring applicants are always informed.
• Collaborative Hiring Tools: Allows team members to share notes, leave feedback, and score candidates within the platform, making it easier to find the best cultural and technical fit.
• Job Board Integration: Optimizes employer branding by allowing you to post customized job listings to multiple job boards and your company careers page with a single click.

Key Business Benefits of an Applicant Tracking System

You may be asking, why do companies use ATS? Not all companies require an ATS system, but if you are finding yourself spending hours upon hours weeding through CVs, trying to filter out the candidate pool, then it’s worth considering investing in recruitment management software. On top of saving time in contracting employees, other benefits of an ATS system include:

Better candidate options – More qualified selection

When using specialized software to help with recruiting, you increase your chances of finding the right person for the job. The selection of the best candidates normally depends on the algorithm and the keywords an applicant includes in their CV. Although this feature may seem desirable, many HR managers are not in favor. They comment that their experience with this type of software add-on does more harm than good. They say that plenty of good candidates get disqualified because a machine can’t do a human’s job. Factorial has taken this into account when creating their ATS. As the recruiter, we let you still have the final say, rather than having a machine decide your candidate’s fate.

Reduces hiring costs – saves time & money

The cost of hiring is high. Therefore, a company should make sure they hire the right person initially so that later on, the role doesn’t need to be filled again. High turnover within a company can cause a decrease in productivity, a loss of customers, and a decrease in employee morale. For this reason, a strong focus on hiring should be at the forefront of the HR department. Hiring is one of the major roles of an HR manager.

Reducing the time required for the hiring process inevitably cuts costs, as you do not need to have more people working more hours to handle recruitment. Moreover, with this methodology, the company has more opportunities for hiring the right person as they are focused on this objective, rather than being pulled in other directions.

Compliance with data regulations – Protect candidate data

In the United States, managing candidate data requires adherence to various state and federal privacy and data security laws. An ATS helps ensure compliance by centralizing sensitive data, controlling access, and automating data retention policies. For instance, platforms like Factorial are designed with data security in mind, integrating the necessary permissions and protocols to help businesses protect applicant information according to US regulations.

Career page customization – Attract top talent

Finding the right team greatly depends on the job board you advertise on as well as writing the perfect job description. What you put out is what you attract. Essentially, if you fail to communicate clearly through your job posting, letting candidates know what type of person you are wanting to recruit, your applicant pool will reflect this same lack of clarity and confusion. Talent acquisition software is the key to finding the best team. Not many of the applicant tracking software available allow you to customize your hiring page easily and effortlessly. Factorial HR understands your desire to present your best foot forward to potential candidates, which is why we have implemented the customized career page.

Improved coordination – Increase team productivity

Using software such as Factorial’s HR system not only provides you with an optimized applicant tracking system but also lets you integrate other functionalities such as document management, absence management, and digital signature among others. By centralizing your HR tasks, you can more easily coordinate with other departments so that, for example, there are no overlaps of tasks or organizational errors.

How much does recruitment software cost?

Different recruitment software will use different pricing plans. Some talent acquisition platforms will charge by the number of open positions. Meanwhile, others will charge by the month or by the number of recruiting managers registered on the platform.

Pricing for all-in-one HRIS platforms with ATS features is typically based on the number of employees. In 2026, costs can range from approximately $5 to over $20 per employee per month, depending on the vendor and the breadth of features included. More comprehensive enterprise-level systems may have custom pricing.

How to Choose the Right Recruitment Tracking Software

Selecting the right software requires a structured approach. Follow these steps to find a solution that fits your needs:

1. Define Your Requirements: Collaborate with your hiring team to list essential features. Key areas to consider include job posting management, candidate collaboration tools, recruiting analytics, integration with existing HR software, customer support, and mobile app accessibility.
2. Evaluate and Trial Potential Systems: Once you have a shortlist, take advantage of free trials. During the trial, have multiple team members test the software against your requirements list. Ensure it integrates smoothly with your current tools and that the features are intuitive, not clunky. Factorial offers a free 14-day trial to test its full suite of HR services, including the ATS.
3. Assess Pricing and Scalability: Before committing, analyze the pricing model. Look for hidden costs, such as fees per job posting or per hire. Choose a system with transparent pricing that can scale with your company’s growth.

ROI: save with an HR ATS

Investing in a talent acquisition platform can seem like a big step, but the savings in time and money probably make it worth your while. Here are some examples of how software will help you at every turn, from sourcing to interviewing to onboarding.

1. During Recruitment and Selection

• Reduced Time-to-Hire: An ATS can decrease the average hiring cycle by up to 60%, minimizing productivity losses from vacant roles.
• Reduced Administrative Time: Automation of tasks like screening and communication frees up hiring managers to focus on high-value activities like interviewing and candidate engagement.
• Improved Candidate Quality: Centralized data and collaborative tools help teams make better, more informed decisions, with 79% of recruiters reporting higher new-hire quality after implementing an ATS.

2. During Onboarding

• Streamlined Administration: An integrated system centralizes new hire data, while features like electronic signature capabilities get contracts signed faster.
• Efficient Training: A document manager allows for the digital distribution of handbooks and training materials, getting new employees up to speed quickly.

3. For Long-Term Engagement

• Reduced Turnover: A better hiring and onboarding process leads to better-fit candidates who are more likely to stay, reducing costs associated with high turnover.
• Improved Productivity: An employee portal empowers team members to manage their own HR tasks, reducing administrative distractions.

Calculating the ROI of recruitment software

By now, it is probably clear that talent acquisition software will save your business money. But you may be wondering exactly how much money. Here’s how to tally up your savings in three easy steps.

Decide on recruitment metrics.

When streamlining your company’s hiring process, how will you measure success? Many organizations might focus on reducing time-to-fill, the time it takes to fill a position. Others might consider the cost-of-hire, or how many manhours it takes to recruit, onboard, and train a new hire. Still, others may determine success through reduced attrition.

Think about your business’s pain points. Where do you stand to see the greatest improvements in your hiring process?

How will you measure success?

Next, consider the costs associated with the old way of doing things. Perhaps positions at your business typically remain unfilled for four weeks. That is four weeks of lost productivity. One fast formula to determine how much money you lose every day that you have an unfilled position is as follows:

(Annual Profits / # of Employees) / 220 Work Days per Year

This formula does not account for lost expertise, hours lost by other staff when they compensate for being short-staffed, or the hours spent by HR in the hiring process.

According to the U.S. Department of Labor, a bad hire can cost a company up to 30% of that employee’s first-year salary, not including the lost productivity from the unfilled role.

Choosing the Best ATS for Your Business

Selecting the best talent management software for your company begins with first clearly defining your needs. Once you have done this, you can prepare your budget, and finally, allocate the budget towards software that will benefit you the most.

Let ATS software work for you. Before testing your needs against its functionalities, lay out a set of selection criteria and get clear on what problem you are hoping the software will solve. Some recruitment CRM software offers companies a free trial period to test out their features.

Conclusion: Streamline Hiring with an ATS

An Applicant Tracking System is a critical tool for any modern business looking to improve hiring efficiency and quality. By automating administrative tasks, centralizing candidate data, and providing collaborative tools, an ATS allows HR teams to focus on what matters most: finding and hiring the best talent. An integrated solution like Factorial’s not only optimizes recruitment but also seamlessly connects the hiring process to onboarding and overall HR management, creating a unified employee lifecycle.

Try Factorial’s ATS Software

FAQ

How do I get my resume to pass ATS?

To pass an ATS, tailor your resume with keywords from the job description. Use a clean, simple format with standard headings and avoid complex graphics or tables, as these can be difficult for the software to read and may cause your application to be overlooked.

What is the applicant tracking system?

An applicant tracking system (ATS) is software that helps companies manage their recruitment process. It collects and organizes candidate information, allowing hiring managers to efficiently filter and track applicants from the job posting stage through to hiring, creating a more streamlined process.

How much does an ATS usually cost?

ATS pricing varies based on features and the pricing model, which can be per user, per job posting, or per employee. All-in-one HR platforms that include an ATS often charge per employee per month, with costs typically ranging from $4 to $8 or more.