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April 13, 2023
5 min read

ROI Calculator


Making a case for new HR software is a project of its own — it’s no small investment, and human resources’ return on investment (ROI) can be hard to quantify in the first place. But in order to secure buy-in from executives and budget from finance for a new software system, you need to show real ROI.

Here are some of the ways you can calculate the ROI of an applicant tracking system (ATS).

Make the case for a new #ApplicantTrackingSystem by calculating the ROI of an ATS:

What is an Applicant Tracking System?

To make a compelling case for buying an Applicant Tracking System, first answer this important question for leadership: what is an ATS? At a basic level, an ATS is an automated system that digitally stores applications and candidate information to help recruiting teams stay organized.

Today, the purpose of an ATS is much more than a candidate database — they’re essential for executing effective and efficient recruitment strategies. The best ATS solutions offer a variety of tools and functionalities to enable recruiters to simplify daily tasks, create a great candidate experience, and make smart hiring decisions:

  • Job board and job description management from one platform
  • Text and mobile applications to reach a wider talent pool
  • Easy interview scheduling with calendar integrations and virtual interview links Interview scorecards and notes stored in candidate profiles
  • Digital offer letters, document signing, and background checks
  • Automated interview reminders, reference checks, and new hire pulse surveys
  • Candidate texting from recruiters’ desktop or mobile device, stored in the ATS
  • Reporting and analytics to evaluate metrics like time-to-hire, quality-of-hire, and new hire performance 

Now, let’s take a look at several ways you can find the ROI of an ATS. Then, try ClearCompany’s ATS ROI calculator to find out the benefit for your business.


The Cost of Agency vs. Efficient In-house Hiring

When you outsource hiring, roles may be filled — but at a high cost to both HR budget and company culture. Depending on the role, staffing or recruiting agencies’ fees are anywhere from 15-100% of the hired employee’s salary or wage. It can also result in new hires feeling disconnected from company culture since they’re recruited, interviewed, and hired by the agency, and only then do they meet their new manager and coworkers. That can lead to lower engagement and expensive turnover.

In-house hiring supported by recruiting software helps strengthen your employer brand by keeping every part of the hiring process within your control. Improve employee retention with In-house hiring can also keep annual hiring costs down since ATS subscription costs are typically far less and charge per user vs. per hire.

Time Savings with ATS Automation

If your HR team is like most, you’ve been taking on more and more responsibility, especially in the past few years. At the same time, you’ve been adapting to rapid digitization, new expectations from job seekers, and an unpredictable labor market. There aren’t enough hours in the day to stay on top of everyday tasks and develop and refine your recruiting strategy.

ATS software can automate tons of tasks that are costing your HR team hours every week and driving up administrative costs. 69% of HR professionals using hiring automation say it saved them a significant amount of time. Tasks that can quickly be automated include:

  • Updating job descriptions across job board postings
  • Sending interview reminder emails and text messages
  • Completing new hire paperwork and employment verification steps
  • Sharing new opportunities with qualified candidates in your existing talent pool

The Cost of a Bad Hire

The cost of a bad hire is estimated to be at least 30% of their annual salary, though most would argue it’s more. That means if you needed to replace an employee making $60,000 per year, the cost to the business is about $18,000 — not to mention the other costs of time lost onboarding the employee, the impact on team morale, and loss of productivity.

Did you know bad hires can cost your business at least 30% of their annual salary? Invest in an ATS to avoid this HR expense:

With the recruiting tools and analytics available in an ATS, your team can reduce the annual costs associated with making bad hires. You’ll be able to easily identify candidates who are likely to be a good fit, make a good impression with streamlined hiring processes, and analyze your company’s real candidate and new hire data to inform better decisions and strategies.

The Value of High-quality Hires

While showing the high cost of bad hires can be effective, you can also demonstrate the ROI of an ATS by detailing the benefits of making high-quality hires. Good hiring decisions lead to:

High-quality hires generate significantly more revenue for your company than even average employees. According to CFO, organizations whose performance is in the bottom 25% generate $171,131 in annual revenue per employee. Top-performing companies, however, generate $561,152 or more annually per employee, an incredible increase of 228% — nearly $400,000 — per year.

An ATS also makes it easier to repeat the process of making good hiring decisions. Recruiters can look back at the skills, experience, and interview scorecards of successful employees to identify traits that signify potential candidates are a good fit. They can also use these insights to adjust their recruiting strategy accordingly to attract the right candidates to every role.

It’s never been more important for HR departments to execute a high-level talent management strategy and focus on lowering turnover rates, reducing bad-fit candidates, and saving recruiters' time. Find out the ROI of an ATS for your organization so you can get your new software up and running and reap the benefits of cost and time savings and a workforce of engaged employees.

ClearCompany is the future of applicant tracking software — the only ATS that is part of a full-platform talent management system for every stage of the employee lifecycle. With a modern hiring platform like ClearCompany, you can implement a consistent talent strategy, recruit top talent, and help employees do their best work.

Try our ROI calculator for an instant estimate to see how ClearCompany can help while saving on turnover costs.

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