As a small business owner, you’re probably looking for ways to cut costs and save time whenever possible. Applicant tracking systems (ATS) and human resources information systems (HRIS) can help with both. But how are they different, and which should you choose?
What is an ATS?
An applicant tracking system is a type of software that manages the end-to-end recruitment and hiring process. These programs can post job openings, analyze resumes, choose standout candidates, conduct interviews, and collect feedback, among other functions. Many businesses—including nearly all Fortune 500 companies—use some type of ATS.
What is an HRIS?
A human resources information system, or HRIS, is software that helps businesses track employee data throughout the employee’s time at your company, from their hire date through termination. Some HRIS programs include recruitment and onboarding features, but companies mainly use them to collect and store employee information, manage vacation requests, upload yearly evaluations, create reports, and process employee paychecks and benefits.
How are ATS and HRIS systems different?
You use ATS and HRIS programs at different stages of the employee lifecycle, so the key difference between the two is timing. Applicant tracking systems manage the recruiting and hiring phase, while human resource information systems track employee details over time. So once a candidate is hired, the ATS is no longer needed and the HRIS takes over.
Another difference is the people who use the programs. External candidates and internal personnel use ATS, while an HRIS is entirely managed in-house. This factor can influence which program you choose, the cost involved, and data security.
What are the benefits and drawbacks of using an HRIS or ATS?
Before signing up for an ATS or HRIS, it’s important to understand the pros and cons of each.
Applicant tracking systems:
Pros:
- Saves money on the hiring process: Subscriptions may range from about $60 to $400 or more per month, which is generally cheaper than hiring a dedicated recruiter or extra HR personnel to manage.
- Decreases time-to-hire: An ATS can map out an entire recruitment and hiring plan for your company and automate some of the manual tasks involved with hiring. This level of service can improve the experience on both ends and help you save time and money.
- Finds high-quality candidates: An ATS usually filters applications based on certain criteria such as keywords, skills, job titles, years of experience, and education, so you take an objective approach.
Cons:
- Cost-prohibitive for some companies. Small businesses that are just hiring one or two employees may not need a software program to manage the hiring process. You may save money by handling the details yourself.
- May overlook qualified candidates. Because ATS programs filter resumes automatically, well-qualified candidates could be left out just because of wrong keyword selection.
Human resource information systems:
Pros:
- Saves time and money: Common HRIS functions, like automation and analytics, help your team save time on HR-related tasks.
- Multi-functionality: Some HRIS programs offer all-in-one software that go beyond data management and include payroll, applicant tracking, benefits, and employee features.
- Customization: You can choose between cheaper “off-the-shelf” products that come with standard features and functions, or customized systems that address your company’s specific needs. You may be able to layer functions as you need them, too.
Cons:
- Upfront and ongoing costs: Though HRIS programs help your team save time and money, you’ll need to budget for the setup, monthly subscription, employee training, and periodic software updates.
- Data security: Security measures are baked into HRIS programs, but any company is at risk of a data breach.
ATS vs. HRIS: Which one should you choose?
ATS and HRIS programs serve different functions, so depending on your company’s needs, you may end up using one or both. A third option involves using an all-in-one HRIS that combines ATS features with comprehensive human resources management tools.
Here are a few scenarios that might help you figure out which type of program you need:
| Issue | Potential solution |
| You’re looking for a specialized service for recruiting, hiring, and onboarding. | Applicant tracking system |
| You want a simple record-keeping system to manage employee data. | Human resources information system that focuses on one or two major functions |
| You have plans to grow your business and want a streamlined program that allows you to add features over time. | All-in-one product that combines an ATS and HRIS with customizable features |
Looking for efficient ATS solutions to streamline hiring and payroll processes? Dive into our guide for expert recommendations and take your HR to the next level.
