Cost of ATS? Is It Worth It? [Calculated ROI of ATS in 2023]

ats roi

You have managed to get over the cost of ATS and bring it on board. But is it worth it?

Things have become much easier and faster but by how much?

Is the cost of ATS paying off?

For that, recruiters need to calculate hiring costs before and after ATS implementation. Have a look at some of the metrics which will help you calculate the ROI of an ATS for a small business.

To help you calculate the ROI of an Applicant Tracking System, we will talk about:

  1. What is the right cost of ATS?
  2. Determining your hiring costs.
  3. Time savings by using ATS.
  4. Cost of a bad hire.
  5. Value of a good hire.
  6. Tracking labor hours.
  7. Assessing recruitment agency costs.
  8. Market research.
  9. Estimating direct savings.
  10. Evaluating indirect or intangible benefits.
  11. Costs of marketing and advertising.

What is The Right Cost of ATS – Or “How Much Should You Pay for ATS?”

There isn’t the ideal number to pinpoint as a cost of ATS. However, there are certain factors you should take into account when determining whether or not you should pay as much as the software provider is asking for.

Those factors are:

  1. Basic Features – Does the ATS has all the basic and need features such as applicant tracking, sourcing, and bulk emailing?
  2. Advanced Features – Does the ATS have features such as blind hiring, AI, resume parsing, candidate screening, resume formating?
  3. Integrations – Can it integrate with other software you use internally?
  4. Customer and Technical Support – Is there 24/7 customer support? How responsive they are?
  5. Software Updates – How often do they update the ATS? When was the last update? You don’t want to be stuck with bugs forever.

All of these factors, plus many more, play a huge role in determining the cost of ATS.

The ecosystem is another important factor too – For example, does the company provide you only with the ATS, or can they offer HR management software, resume reformatting software, employee onboarding and much more like Recruiteze does?

It is always a good idea to have one company cover all of your recruitment needs.

With that being said, how much should you pay?

What is the reasonable cost of ATS for my use case?

Based on the type and size of your company, here is the reasonable cost of ATS:

  1. StartUp – Around $30-$60 monthly cost.
  2. SMB – $60-$120 monthly cost.
  3. Enterprise – Starting at $100 monthly cost.

Keep in mind that it is of incredible importance that the software provider offers a custom cost of ATS. That means that the cost can be calculated based on the current needs of your business or hiring department, hence it isn’t fixed.

To explain more in detail, with the custom cost of ATS, you aren’t paying for an Enterprise plan for example, because that way you might be paying for some features you never use. Instead, the software provider crafts a custom solution for you that has all the features you need and use.

Now that we have cleared up how the cost of ATS is determined, and how much you should be paying for one, let’s get into determining the ROI of ATS.

Determine Your Hiring Costs

Determine Your Hiring Costs

The first step for calculating hiring costs is to know the number of actual hires. This is done by taking a product of your number of employees currently working with you and your turnover rate.

This figure is essential in case the hiring managers are anticipating adding some new roles. To calculate the current hiring cost, you need to calculate the average cost per hire. Now, multiply these two figures to get the exact hiring cost.

Time Savings by Using ATS

Time Savings by Using ATS

The small companies that are hiring in-house have their own ATS comprising of messy spreadsheets and long email chains. As a result, a considerable time and energy of HR managers and recruiters get wasted.

Let’s calculate ROI with an example. Say, one technical manager, two HR members, and one CEO are involved in every hire. HR Team spends approximately 30 hours in recruiting per week.

Suppose the market rate is $20/hour. Per week rate pre-ATS is:

30 hours * $20 per hour= $600 per week

With ATS, we can say the cost per week is $37 but the time spent reduces to 20 hours. That equals

20 hours * $ 20 per hour +$37 (ATS)= $437 per week

The company can easily reduce at least 30% of the total amount and time to hire.

Enjoy a 15 days free trial of the Applicant Tracking System to get an exact picture.

Cost of a Bad Hire

Cost of a Bad Hire

An ATS undoubtedly helps recruiters to customize job descriptions and enhance employer branding. Moreover, it helps them get acquainted with passive and active recruiting strategies that help bring in the top talent. But, even if we consider the worst-case scenario, the company still saves a lot of money by making better hires than following the archaic system.

The cost of a bad hire depends upon his seniority level, rank, and cost of the ATS, which a compan