What Is an ATS, and When Does Your Company Need One?
An ATS is the software that keeps jobs, applicants and hiring stages in one place. What it does, when you outgrow the spreadsheet, and how pricing compares.
An ATS (applicant tracking system) is software that runs your hiring in one place: it publishes job openings, collects applications, moves each candidate through the stages of your selection process and keeps a record of everyone who applied. Your company needs one when spreadsheets and email start losing good candidates.
The acronym sounds like something only large corporations use, and they do: Jobscan's 2026 report found an ATS at 97.4% of Fortune 500 companies. Yet most hiring happens in small businesses. In Brazil, where HireTree was born, micro and small companies created more than 1.3 million formal jobs between January and November 2025, seven out of every ten in the country, according to Sebrae, based on official Caged employment data. Those are exactly the companies still hiring through spreadsheets, chat groups and shared inboxes.
This guide covers what an ATS does, how to tell whether you need one, and how to compare pricing models without walking into a trap. For the step-by-step hiring process itself, see the recruitment and selection guide for small businesses.
What is an ATS, in one sentence?
An ATS is a system that tracks every candidate from application to hire (or rejection), showing which stage they are in, who reviewed them, what was decided and when. Think of it as a CRM for people who want to work for you, instead of customers who want to buy from you.
The name describes the original job: tracking applicants. Modern systems go further and cover the whole process, from advertising the role to the accepted offer.
What does an ATS actually do?
Features vary by vendor, but five functions show up in almost every serious ATS:
- Careers page and job distribution. You get a careers page listing open roles with an application form. Good systems also publish openings in a format Google recognizes as job postings, which brings in applicants without ad spend.
- Hiring pipeline. Each job has stages such as screening, interview, assessment and offer, and candidates move between them, usually on a kanban board. You can see at a glance how many people sit in each stage and where the process is stuck.
- Resume screening. Requirement filters, knockout questions on the application form and, in some systems, an AI fit score that helps you decide whom to read first. The hiring decision stays with a person.
- History and talent pool. Every candidate is stored with their resume, evaluations, team comments and the reason behind each decision. The runner-up for one role can be invited to the next one without posting a new ad.
- Privacy compliance. A resume is personal data. Laws such as the GDPR in Europe and the LGPD in Brazil require a defined purpose, a retention period and a way to honor access and deletion requests. An ATS records consent at the application and can apply the retention rule on its own, which a folder of email attachments never will.
Most systems also handle candidate communication (status emails, interview scheduling), structured interview evaluations with defined criteria (scorecards) and reports on metrics such as time to hire and stage conversion. You can see how these pieces fit together on HireTree's features page.
How is an ATS different from a hiring spreadsheet?
A spreadsheet works well for one opening at a time with one person running the process. Trouble starts when volume grows, more people get involved and history starts to matter:
| Situation | Spreadsheet + email | ATS |
|---|---|---|
| Receiving applications | Resumes arrive by email, chat apps and social media | One form per job, everything in one place |
| Knowing each candidate's stage | Depends on someone updating the row | Visible on the pipeline, updated with every move |
| Several people reviewing | Conflicting file versions, lost comments | Evaluations and comments stored on each candidate |
| Replying to rejected candidates | Manual, and usually forgotten | Ready-made messages, sent in bulk or automatically |
| Reusing past candidates | Inbox search, if someone remembers | Searchable talent pool |
| Privacy (retention, deletion) | No control, copies scattered everywhere | Recorded consent and configurable retention |
| Measuring the process | Hand-built formulas | Metrics calculated from the pipeline itself |
| Direct cost | Zero | Free plans exist; paid plans depend on the pricing model |
The spreadsheet's zero cost is real, but it is not the whole cost. Every strong candidate who drops out mid-process means a role stays open longer, and hiring is expensive: SHRM's 2025 benchmarking reports put the average cost per hire for nonexecutive roles in the United States at US$5,475.
When does your company need an ATS?
There is no minimum company size, only signs that a manual process has hit its limit. If three or more of these describe your routine, an ATS is worth trying:
- You regularly have more than one opening at the same time.
- More than one person takes part in hiring (owner, store manager, team lead).
- You have lost a good candidate because you replied too late or forgot to call back.
- Resumes arrive through different channels and nobody knows where a given one is.
- You cannot say how many days it takes, on average, to fill a role.
- Candidates complain, or give up, because they never hear back.
- You hire for more than one location, store or branch.
- Someone asked how long the company keeps resumes, and nobody knew.
The last item tends to be the biggest surprise. A shared folder with hundreds of old resumes is not a talent pool. It is a liability, because the company has to justify why it still holds that data.
What types of ATS are there?
Some ATS products target large enterprises, with long implementations and payroll integrations. Others are built for small and mid-sized companies that sign up online and start the same day. For the buyer, though, the split that matters most is the pricing model:
| Pricing model | How it works | Tends to suit | Where it hurts |
|---|---|---|---|
| Per user (recruiter) | You pay for each person with access | Small, centralized HR teams | Every manager who needs to review candidates becomes another license |
| Per open job | You pay for jobs active at the same time; closing one frees it | Companies with variable volume and many reviewers | Companies that keep dozens of jobs open all year |
| Per location or branch | You pay for each store, branch or entity registered | Networks with few locations and heavy hiring | Opening a new location raises the bill before it earns anything |
| Per employee | Price follows total headcount | Companies also buying a full HR suite | Grows with headcount, even in months with almost no hiring |
No model wins every time. The useful question is: what grows fastest in your company, the number of people involved in hiring, the number of locations, or the number of open jobs? Pick a system that does not charge for the thing you grow most, and run the numbers for a year from now, not just today.
HireTree is a Brazilian ATS that charges per open job, with unlimited locations and unlimited users on every plan. Inviting each store manager to review candidates does not raise the bill, and closing a job frees room for the next one. Prices are public on the pricing page.
How do you start using an ATS without overcomplicating it?
Moving off the spreadsheet does not have to become a project. A path that works for most small companies:
- Start with a real opening. Pick your next hire and run the whole process inside the ATS, from posting to offer.
- Set the stages before you advertise. Three to five are enough: applied, screening, interview, offer, hired. More than that turns into bureaucracy.
- Write down the evaluation criteria. Two or three skills per role, rated the same way by every interviewer. Decisions become fairer and easier to explain.
- Invite the people involved. Manager, team lead, co-founder. On a per-user plan, this is the step where the bill grows, so check first.
- Set up candidate replies. One confirmation message and one closing message already fix the top complaint applicants have.
- Decide your data retention period. Choose how long to keep resumes of people you did not hire, and let the system enforce it.
- Review the metrics after a month. How many days the job stayed open, which stage lost the most candidates, which channel brought the best people.
On HireTree, the Free plan lets you keep 1 job open at no cost and with no end date, and the 14-day Pro trial does not ask for a credit card. AI resume screening, WhatsApp messaging and the connector for AI assistants are part of the Pro plan and above. Each capability is summarized on the features page.
Does an ATS replace the recruiter?
No. An ATS takes the repetitive work off the recruiter (copying resumes, updating spreadsheets, remembering to reply) and frees time for what needs human judgment: talking to candidates, evaluating interviews and deciding. Even with AI in screening, the score is there to order your reading, not to reject anyone on its own. Keeping a human in the loop is also good practice under privacy laws, several of which give people the right to have automated decisions reviewed.
Sources and references:
- Jobscan, ATS Usage Report 2026: ATS adoption in the Fortune 500
- Agência Sebrae, small businesses created seven in ten formal jobs through November 2025 (Jan 2026, in Portuguese)
- SHRM, 2025 Benchmarking Reports
- Brazil's General Data Protection Law (LGPD), Law 13,709/2018 (in Portuguese)
Frequently asked questions
What does ATS stand for?
ATS stands for applicant tracking system. It is the software that keeps job openings, applications and hiring stages in one place.
Does a small business need an ATS?
It does once several of these signs describe your routine: more than one opening at a time, more than one person reviewing candidates, good applicants lost to slow replies. If you hire once a year, a well-kept spreadsheet may still be enough.
Is there a free ATS?
Yes. Several systems offer a free plan with limits on jobs or features. On HireTree, the Free plan lets you keep 1 job open with a hiring pipeline and a careers page, with no end date.
What is the difference between an ATS and HR software?
An ATS handles recruiting, from posting a job to making the hire. HR software (an HRIS) handles people who already work for you: payroll, time tracking, leave and documents. Some vendors sell both, but they solve different problems.
Does an ATS help with data privacy compliance in hiring?
Yes, because it records candidate consent, keeps the data in one place and can apply a retention period to resumes automatically. The company is still responsible for defining the purpose and retention period and for answering requests from candidates about their data.