Is a Free Applicant Tracking System Right for Your Business?March 20, 2014 by Erin Osterhaus
Almost all companies face the same challenge: how to find and hire the best people for their business. An applicant tracking system (ATS), which is software that allows recruiters and hiring managers to track, organize and communicate with candidates, can help companies better address this challenge.
However, small businesses might not require all the bells and whistles offered by many paid systems. The good news is the ATS market has exploded in recent years, which means companies today have a wide range of options available—including free ATS software.
For many companies recruiting on a budget, free ATS tools are obviously an attractive option. But can a free system effectively meet your organization’s needs?
I spoke with representatives of four popular free ATS software companies to find out how these free systems work, what types of businesses they’re best suited for and the most important considerations to keep in mind when evaluating free versus paid systems.
How Do Free Software Vendors Make Their Money?
Vendors of free ATS software typically generate revenue in two ways:
- Charging customers for third party services, such as job posting, candidate assessment or video interviews, and;
- Offering an introductory product at no cost to the end user, then charging for upgrades to additional features.
Generally, vendors will allow users to post as many job postings as they like to free job boards. But if you want to advertise your job openings on paid sites like Monster or LinkedIn, you’ll have to pay for the service.
While there are many free ATS options available, four of the most popular ones include:
All offer both free and paid options, except for Qandidate.com, which only offers a free version. These vendors all have revenue sharing agreements with various third party service providers—meaning users can often get a discount on job board prices as a result—and take a cut of what the end user pays to use their services.
Additionally, some ATS vendors offer “online stores,” where you can shop around for certain job boards. Many vendors will even recommend which job boards will provide recruiters with the most candidates based on data they’ve compiled over time.
SmartRecruiters’ online store
The second way these vendors make money is to offer a paid version of their software, hoping that many companies will find this version more attractive as their organization grows and requires more functionality. In essence, the free version is a way to get smaller companies in the door. As they expand, firms can easily upgrade to the paid version without having to transfer their data to a different ATS.
While capabilities in free versus paid versions will vary slightly, Dan Arkind at JobScore puts it simply: “What it really boils down to is if you need more advanced functionality, you’re going to need to pay.”
What Features Do These Systems Offer?
Most free ATS systems feature the essential components companies usually look for when seeking an applicant tracking system: application management, a resume database and job posting capabilities. (And don’t worry about the user interface—the free versus paid versions of these systems are all virtually the same.)
Essentially, these free systems serve as relationship management systems. Once a candidate applies, the system creates a profile that serves as a repository for all information regarding that applicant. This includes storing resumes, correspondence with the candidate, their status in the hiring process and comments recruiters and/or hiring managers may make on how well suited they are for a position.
Screenshot of a candidate profile in iKrut
However, when it comes to advertising open positions, analyzing recruiting metrics and other bells and whistles, chances are you’ll have to pay. Below is a list of features each of these vendors offers for free.
|Email Tracking / Templates|
|Careers Website Integration|
|API and Integrations|
How Many Positions Are You Hiring For?
Every free ATS vendor representative I spoke with prides themselves on the ease of use and quick setup of their product, which makes their systems attractive for smaller companies.
Qandidate.com, for example, has found that its product performs especially well among companies that don’t have an official recruiting department. According to Ralph Brasker, Qandidate.com’s Director of Marketing and Product Innovation, many of the company’s clients are “small and medium sized businesses that don’t have a dedicated professional recruiter.”
These are the types of companies free ATS software is intended to serve—small businesses that are only hiring for a few positions at once. In these instances, the office manager can generally handle the added workload with the capabilities provided by a free ATS solution.
However, once you begin to hire for more positions at the same time, most organizations will employ the services of a designated recruiter. As Arkind points out, “In the event that you’re perpetually hiring five or more people at a time, it’s usually somebody’s job.” When that’s the case, it’s likely that your business has reached the point where you’ll require a paid solution.
On that note, while none of these free ATS solutions limit the number of users who can log in to the software, Smooke remarks that the more users you have, the more likely you’ll need a paid version. “As opposed to how big your business is, the decision usually comes down to the number of users,” he says.
Do You Need Sophisticated Recruiting Reports?
The type of reporting capabilities your company needs will depend largely on its size. The larger you are, the more complicated your reporting needs become. As Arkind notes, “When you’re small, simple reports are fine.” Because most users of free ATS software are small organizations and most free ATS software includes basic reporting capabilities, this isn’t usually an issue.
JobScore’s free software, for example, offers four simple reports:
- Job posting activity: Where you’ve posted jobs, and how many applications you’ve received from those posts.
- Job sharing activity: How often the URL for your specific job posting has been shared or posted across social sites.
- Referral activity: How many referrals you’ve received for each of your open positions.
- Compliance reports: Whether your company is compliant with federal hiring regulations.
JobScore’s breakdown of candidates by source
The other free ATS vendors offer similar reporting capabilities to those of JobScore, with some offering slightly more or less advanced reports. For instance, iKrut allows users to track the source of candidates on a job-by-job basis, which users can compile over a 12 month period to see which job boards are working best. iKrut can also identify the number of applications you receive each month and your cost-per-hire for each job.
The types of reports offered in free systems are ideal if you’re only hiring for one or two jobs at once, but once your company grows to the point where multiple people are using your ATS to recruit for many positions at once, the need for detailed analytics grows.
“The premium reports are more for the enterprises—filtering across different jobs, different locations and evaluation for the performance of various sourcing channels,” Smooke says. It’s geared for the Head of Talent Acquisition or VP of HR, designed as a clean dashboard for when you are hiring for a ton of positions at once.”
If you need more advanced reports, Arkind says, you’ll need to pay. With JobScore’s software, for example, if you want to know specific metrics such as how quickly hiring managers are responding when you send them a resume or how long your candidates remain in each stage of the recruiting process, an upgrade will be necessary.
Do You Need (or Want) Designated Support?
One of the most costly functions for any software vendor is support and training. As Nick Leigh-Morgan, the founder of iKrut says, “If we’re giving our system away free of charge, we can’t be in a situation where we’re going to get hundreds of phone calls and emails a week, so it’s essential for us that users can be up and running without the need for any help from us. But we still offer them support if they need it.”
While training is not included with any of these free systems, some do offer certain types of limited support.
|Designated Support Agent|
Additionally, many of these free systems are usually so straightforward that end users can figure them out in a matter of hours. In fact, the vendors I spoke with all made a point of mentioning that they strive to create easy-to-use software, as it reduces the amount of time staff must devote to helping users.
According to Brasker, Qandidate.com has “customers who receive their credentials in the morning, and in the afternoon they’re an advanced user, have created five requisitions and have the first candidates applying.”
Additional Information and Considerations
Transitioning Between Software Tools: If your company needs an ATS in a crunch, but can’t decide on a paid system, a free ATS can be a great way to bridge the gap. All the solutions listed here ensure that you own your own data, so when—or if—you decide to change systems you can easily export your information to a CSV file and upload to your new ATS. However, it should be mentioned that most of these vendors charge a nominal fee for providing that data.
Social Recruiting: More and more recruiters are now embracing the value of social media when sourcing candidates. As a result, many ATS vendors have released solutions that allow users to integrate their software with social sites like Facebook and Twitter. Three of the four vendors highlighted here offer social recruiting—i.e. the ability to post job openings and track job applications from social networks.
Mobile Capabilities: If your company is looking for extensive mobile capabilities, a free system might not be best for you. Only SmartRecruiters offers an iPhone app (the other vendors featured here did note their systems could be accessed via a mobile browser). However, advanced mobile capabilities—such as the ability to text applicants updates with their progress—are generally only included in paid ATS systems.
HRIS Integration: None of the free ATS vendors I spoke with currently offer automatic integration with a company’s human resources information system (HRIS). Three of the four said they were working on developing application programming interfaces (APIs) in the near future (SmartRecruiters already has an API on offer), but if you want to integrate your HRIS right now, in most cases, you’ll have to work directly with the vendor to transfer your data.
If your company is currently seeking an ATS for its hiring needs, there are many free options available for you to choose from. Keep in mind, however, that free solutions are usually best-suited for small companies. The bigger you grow, the more demands you’ll make of your ATS. Free options are often a great place to start, but for greater breadth and depth of functionality, chances are you’ll eventually need to pay.
Screenshots provided by SmartRecruiters, iKrut and JobScore.