by Hemanth Soni
Published on 4 April 2016
Applicant tracking systems (ATS) are a must-have for any business looking to grow and bring in talented new employees. But with more 400 current ATS vendors and counting it is difficult to make a decision on which software to select, not to mention which pricing model is the most economical. Different ATS pricing models are suited to different companies and different use-cases. So which ATS pricing model is best for you? Here we look at some of the most popular pricing models to help you decide.
_ Pricing models explained: _
One-time fee / self hosted: Pay a one-time fee for unlimited access. With the rise of cloud computing this is an increasingly rare (and almost extinct) option. The major benefits are the on-site data storage, and the one-time-payment which in the long term can be less expensive than a subscription. However, these solutions rarely include updates (although some ATS applications such as IceHRM provide guaranteed updates for a certain period of time) or even product support, resulting in security vulnerabilities, outdated features, and eventual upgrade costs.
Subscription: Alternatively, subscription models generally offer continuous updates and customer support, resulting in a more stable and reliable ATS. This does require a consistent and permanent outflow of cash over time, and the expenses can add up in the long term. However, subscription-based ATS plans tend to be the right decision for most firms, since one-time-fee systems require technical expertise to set up, troubleshoot, and manage in the long term. This dedicated expertise is often more expensive than a SaaS ATS which benefits from economies of scale.
Freemium: There is a handful of applicant tracking systems that are free, with the option of buying certain premium features and services. For example, using the ATS features in Fitzii is completely free, with unlimited postings, users, and applicants. You can paid add-ons from within the software, including professionally-written job ads, assessment and screening services, and premium job board postings. This model is not only cheaper, it can be particularly valuable for companies that don't have the time or HR expertise to effectively manage recruiting, allowing them to get affordable help for some or all of the process.
Per-recruiter (for example Taleo): Pay for every recruiter on the HR team. This is the most common approach for software serving larger, traditional organizations, where only the HR department is involved in the hiring decision. For growing businesses with evolving needs, this model results in unpredictable expenses as recruiters are added and removed from the ATS over short time frames. Many companies today prefer to involve non-HR individuals in an increasingly collaborative hiring process, so the popularity of this model is decreasing.
Per-employee (for example Greenhouse): Pay for every employee in the company, regardless of their function. This is the model adopted by many "startup-friendly" ATS, since the initial costs for early stage companies are low, and the vendor will make more money as the company grows. This also works well for companies who want unlimited users, so any hiring manager or colleague can use the tool and collaborate through the hiring process.
Per-job-posting (for example Recruiterbox): Pay for every job posting or for a limited number of open jobs at a time. This is a good option for companies with consistent hiring needs, and an issue for those who can't predict hiring needs, since there will be times when you are over or under-utilizing the spend. For larger companies with a greater number of listings, this model is costly despite the volume discounts offered by some ATS services operating with per-job-posting pricing.
Free or flat-fee / per-feature (for example Fitzii): Pay a flat monthly fee, or receive the ATS for free, with limitations on certain features or services. This is an small business-friendly pricing model that makes budgeting a breeze. It enables firms to pay only for the specific features or services they need, which can result in lower total costs, and help them hire better. With this model, small companies can access the same advantages of a large business (for example recruiting experts and assessments), without over-investing.
Generally, most ATS provide the option of paying per use/job, monthly or annually. While annual payments provide a minor discount, this is only advantageous for larger firms with the cash flow available to make large up-front purchases and the ability to forecast need.
For smaller businesses, a monthly subscription or per-use price can be a better option, as it allows for increased flexibility in upgrading/downgrading plans as needs change, and flexibility in switching to another ATS service if a more suitable option springs up.
Beyond just the pricing options, one must also consider the specific needs of their company, and how different ATS cater to those needs through various features and services. As a rule it's a good idea to look at the customer lists and marketing materials of the vendor to determine whether they specialize or focus on a company of your type and size. If they do, odds are the feature set will also work for you.
How you plan on finding your candidates can also influence the decision. Do you hire heavily based on referrals ( Jobvite) or do you need help with hard-to-fill technical roles ( Greenhouse)? Do you have the time and expertise to manage recruiting yourself ( ICIMS), or could you use some help through a selection of add-ons and services ( Fitzii)?
Choosing the right ATS is no easy task, and pricing is only one factor to consider when making the decision. Check out GetApp's list of ATS software with user and expert reviews to help learn more about the various options available to you, their pricing, and specific feature sets.