Comparing Paid vs. Free ATS: Which is Right for Your Business?

Understand Your Business Needs to Choose an ATS

Should I use a free or paid ATS? Arriving at the answer to this requires answering a few more questions. By the end of this post, you will have all the questions you need to ask and of course all the answers to them!

Applicant Tracking System costs can range anywhere from $0 to $125,000 a year. Yet with ATS pricing, the higher the cost does not necessarily equal the right choice for your business. An ATS is a special component of your tech stack because it must strike a balance between technological efficiency and maintaining a strong human-centric focus. Which doesn’t make choosing an ATS easy.

Whether you invest in an ATS or not, invest time in making sure you know what you’re looking for. Ask yourself these questions to better understand what your needs are today and how they may change:

  • On average, how many hires do you make in a year?
  • What is the cost per hire?
  • What is the time to hire?
  • Is your candidate data accessible for later hires and is it compliant?
  • What has the quality of your hires been?
  • What do you want your future HR department to look like and what HR technology may you need to achieve that as you grow?

From the questions above, the key factors to understand about your business are:

1) what your biggest blockers to hiring are

2) how do you want to empower and scale your business’s hiring function

3) what is the quality of your hires

These three key factors influence what your hiring ROI is.

And if you have the data, using a ROI calculator to further understand it, is always a good idea.

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We have made it simple with a framework. Answer a few questions and let our automated score make the decision of choosing an ATS for you!

What to Expect From a Free ATS

A free ATS will give you all the key features you need to address those 5 key things. At its core, an ATS should streamline your process while still increasing efficiency, accuracy, standardization and candidate experience.

Advantages to expect in a free Applicant Tracking System

  • Resume parsing: Analyzes your candidate resumes as you receive them providing you with clean, organized and standardized information.

    For more details: Compare resume parsing techniques
  • Improved screening: Through standardized information collection and presentation, customizable screening questions, tags and automated screening workflows, your screening process can be much faster, less biased and more accurate.
  • Job posting: Automatically post all your vacancies onto free and paid job boards, as well as a customizable careers page
  • Communication: In-platform communication allows you to template, schedule, automate, personalize and brand all of your candidate communication. Improved communication helps your candidate experience, employer brand and overall effectiveness.
  • Compliance: Rarely a feature people get excited about but key. Especially for the start-up and SMB market, handling and understanding compliance can be a very big task. Having an ATS automate it, is a big - but often forgotten - advantage that’s very needed as a business scales.
  • Centralized data: All your hiring data will be in one place. Having (controlled) access to all your information for everyone in your team who needs it (e.g. someone doing an interview) streamlines hiring processes. You’ll also have access to candidate information to build up talent pools to call on for your next hire.
  • Candidate experience: Clear communication, regular feedback, an efficient hiring process, organized and well-managed interviews, a simple application process and information about your employer brand are all essentials to a great candidate experience and are all enabled by an ATS.
  • Reporting: Raw candidate, job, job post, hiring process, interview and much more data are all accessible to analyze on your own and presented in an easy-to-read reporting dashboard. Understanding your hiring process allows you to know what’s working and what needs work.
  • Job workflows: Standard hiring process stages for each role ensuring that your hiring team are all on the same page, outcomes and deliverables are clear and that every candidate has a fair, standardized experience.
  • Cost-effective: It's free. Need we say more?

Limitations of Free Applicant Tracking System

A free ATS offering will usually be used as an introductory product to a more advanced version of that ATS or used as an add-on offering to a broader HR technology product. It’s rare for a free ATS to be created with the intention of it being the primary or exclusive offering of a company. Potentially controversial to say but essentially limitations in free ATSs are inevitable and intentional.

  • Limited usage, such as:
    • Active jobs
    • Hires
    • Users
    • Candidates
  • Integrations
  • Basic automation
  • Basic job workflows
  • No approval workflows (automatically assign offers and role requests to be approved by the right person)
  • Preset access levels (a limited amount of preset levels of access to candidate, job and all other information on your ATS)
  • Uncustomizable data fields
  • Standard reporting and access to basic data analytics dashboards
  • Access to customer support

What to Expect From a Paid Applicant Tracking Software

Advantages of a Paid Applicant Tracking Software

As we touched on above, a paid ATS will often be a more advanced version of the company’s free version. This is an advantage for free and paid ATSs. Rather than needing to implement an entirely new system when you outgrow your ATS, you can simply add more features. The scalability of a system can be one of your most important advantages.

A paid ATS allows you more:

  • Scalability
  • Data field customization
  • User access control
  • Automation
  • Increased customer support
  • Approval workflows
  • Custom job workflows
  • Integrations
  • Advanced Reporting

Advantages to expect only in a paid Applicant Tracking Software

  • Access to other in-system HR features like digital assessments, onboarding, performance management, training, employee management, payroll, time-tracking, etc.
  • Advanced offer and contract management
  • Custom API integrations
  • Various AI features such as resume summaries and chatbot pre-screens
  • Implementation support
  • Interview self-scheduling
  • Easy access to candidates interested in your business but aren’t suitable right now through CRM-like talent pools.
  • Talent engagement campaigns
  • Customizable and branded careers page

Limitations of paid Applicant Tracking Software

Just because an ATS is a paid ATS doesn’t mean it’s without limitations. As each ATS has different versions, at different costs, a paid ATS can have any of the limitations above and can exclude any of the advantages listed above. It just depends on the specific version of the specific product. This list is therefore not at all exhaustive and most systems will have more than this.

Limitations to expect in a paid ATS

  • Amount of native integrations
  • Implementation support
  • Balancing human-centrism and automation
  • Limited time-zone coverage customer support
  • Can be costly with per-seat pricing and annual contracts

The Bottomline of ATS Costs and What’s Right for You

Understanding more about your business hiring needs and knowing how free and paid ATSs compare, leaves you much more equipped to explore why the range of ATS costs is so broad. The bottom line really is and balancing that with the culture you want to promote. With the wide range of costs and the sheer amount of options out there, these guidelines are a good place to guide your search:

Type
Employees
Annual Cost of ATS
Small Business
<100
$250 - $3,000
Medium-sized Business
100-500
$3,000 - $15,000
Large Business
500-5000
$15,000 - $50,000
Enterprise
5000+
$125,000+

Source: Select Software Review Pricing Guide (2024)

But your business is unique and only you truly understand it. For example, if you’re in hyper-growth or expecting to be soon, focus your search on choosing an ATS that can scale with your business. And if you’re a medium-sized business that has a steady headcount and you’re not planning to increase your hiring, a free ATS could be perfectly suited. An ATS can be a powerful tool whether it’s free or paid. One thing that is for sure, is that wherever your business is and wherever it's going, there’s one that’ll be right for your business needs.

Continue Reading: 17 Things to Know Before You Choose an ATS