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ATS vs. HRIS/HCM Systems: Differences, Benefits, and Features

October 28th, 2022 10 min read

Centralization has been an overarching trend in HR software for a while now. As disparate systems and processes like applicant tracking, HRIS, and employee engagement consolidate into broad Human Capital Management (HCM) suites, it begs the question: Are we now in the Endgame of HR software?

While the impulse to centralize all of your HR software may be persuasive, some industry leaders still make the case for separated and specialized solutions. There are important differences between applicant tracking systems, HRIS databases, and HCM suites, and these differences are worth considering before making your next software purchase. 

The Differences between ATS vs. HRIS

The core difference between an ATS and an HRIS is timing. Applicant tracking systems keep track of candidates in the pre-hiring phase, while HRIS systems keep track of employees after they’ve been hired. 

In an interview with TrustRadius, SmartRecruiters’ Director of Product Marketing Jack Wei framed this distinction around the different functions that each tool provides. ATS tools support recruiting, which faces external candidates and should, therefore, be treated as a “sales and marketing function” according to Wei. This framing leads vendors like SmartRecruiters to emphasize authenticity and candidate experience when engaging talent. In contrast, HRIS products support internal HR functions, which are more akin to “back office operational duties.” These functions, and the software that support it, focus more on operational efficiency and quantitative reporting. 

Features and supporting functions also differ between ATS vs. HRIS. ATS tools have built on their primary function (applicant data storage) to support other aspects of the recruiting process including the job posting, interviewing, and job offer management. In contrast, as the core database for employee data, HRIS systems almost always include demographic data, payroll, benefits, and other administrative tools.  

Since ATS products and HRIS products serve two separate functions, there’s not an either/or decision to be made here. You need both. HR software vendors recognized these converging needs and saw the value of consolidating both tools into a single platform. Thus began the rise of the HCM suite.

HCM Suites—The Infinity Gauntlet of HR software?

HCM suites essentially evolved out of HRIS systems. Over time, HRIS tools grew to incorporate a broader range of strategic HR functions and ATS capabilities. Today, this combination is nearly ubiquitous—you’re unlikely to run into an HRIS-only product unless you’re a startup or very small business. 

There are two main incentives for adopting a comprehensive HCM suite over an ATS:

#1 Bundling HR functions with recruiting into one platform could save your company a lot of money when applied at scale. This is particularly relevant if you need to use more strategic functions like workforce management and corporate learning management, which are more likely to be integrated into the larger HCM tools.

#2 Beyond the financial aspect, HCM suites’ biggest boon is their native integration across HR functions and the natural data flow that integration enables. This integration allows you to more easily automate processes and use data from multiple HR processes simultaneously. 

The value of integrating data flows between ATS and HRIS products are particularly evident in the liminal space. Personnel data is at its most volatile in the transition from “candidate” to “employee,” because these individuals could be changing their addresses, contact information, financial information, insurance and benefits information, etc. The more naturally that recruiting and applicant tracking are integrated with the rest of your HR systems, the lower the risk of errors, manual data entry, and a very frustrating onboarding process. 

According to Wei, there’s much to gain from securing functional data flows both out of and into an applicant tracking system. Aligning all these functions on a single platform creates not only the data flow itself, but makes the workflow between both functions more smooth. On the topic of integrating HR processes, Wei said:

“You want to make integrations ready out of the box, and you want to open up those connection points. From our standpoint, it’s in our best interest to make that connection as seamless and painless as possible.”

While point solutions like SmartRecruiters are always improving their integration capabilities, the native connections between functions with HCMs are still likely best-of-breed on the topic if that’s your top priority. However, like some purple supervillains, HCMs would be premature to claim that “they are inevitable.” Standalone ATS tools still have a strong case to make. 

If you want to learn more about HCM, check out the video below for a quick guide:

The Case For Standalone ATS Tools

While the trend may be towards HCM adoption, there are tradeoffs to big software suites and advantages to point solutions that you should be aware of. 

An HCM suite could be roughly described as a “Jack of all trades, Master of some.” From the perspective of standalone ATS advocates, recruiting is not one of the trades that HCM software has mastered. Your recruiting functions may fit better with the rest of your HR tech stack as part of a consolidated HCM. However, there’s a high risk of losing out on the range and quality of recruiting features at your disposal.

Candidate Relationship Management (CRM) features are an excellent example of the difference you can experience between standalone and suite options. According to Wei, “most HCM suites don’t have… a pre-integrated CRM, which is where you can look at best-of-breed recruiting software and see a lot of investment and innovation happening.” 

In the hiring process, managers may be more interested in some of the features and ATS can provide that tend to fall through the cracks in an HCM.

HCM suites tend to lack advanced candidate sourcing, filtering, and strategic functions like interview support and skills assessments. If these features are crucial for you, a standalone ATS solution might be a smarter choice. 

These types of features are very useful for a variety of situations. For less experienced hiring managers, they can streamline workflows and optimize results. Another very realistic situation where these may be useful is in the case of specialized hires. In many industries, the best hiring manager in the world may not have all the working knowledge needed to ask the right questions of their prospective new employees. In highly specialized roles, software organizations, medical fields, and a plethora of others, job seekers may know more about what the company would need in their role than their interviewer.

A good ATS allows workarounds to these problems. Talent acquisition can be supported, with HR professionals able to make use of the specialized advanced features available to them.

For others, money can become the major factor. Especially for smaller organizations with less complex HR needs, pairing point solutions like an ATS with an HRIS may be more financially viable than investing in a full HCM suite. Buying a big HCM software just for the core HRIS and ATS functions could be more expensive than paying for an HRIS or small-scale HCM upfront and then adding point solutions as necessary. This is especially true for organizations with HR needs that, like their applicant tracking ones, fall outside standard metrics.

Unfortunately, most HCM products don’t advertise pricing upfront, so it may take some exploration to find out what that math looks like for your business. 

Examples of ATS and HRIS/HCM Software

While a broad discussion of benefits and drawbacks are useful, these are extremely diverse software categories. HCM software can range from massive suites targeted at enterprises to smaller, niche settings. ATS range from data-management focus to simple tools to help a long HR professional. Here are some examples of names you will find in these spaces, and what to expect from each.

Rippling HR – As Comprehensive as it Gets

On the scale we have discussed of suite to individual tool, Rippling smashes to the former. Rippling goes beyond even just HR, offering IT and finance functionality all in one platform. The tool is designed for automation, rapid integrations, and smooth sailing across departments.

The software boasts of your ability to set up a new employee, providing all their benefits, work computers, and even software like Slack and Office with ease. The tool is one of the Top-Rated HR Management Software on Trustradius. At a scale like this, some users critique some of the issues you might expect from our discussion above, namely the complexity of UI and some learning curve. This is to be expected, however, and if you need all these things and can afford it, this would be a fantastic option for many organizations.

Greenhouse – ATS for the 2020’s

Many discussions of ATS make them sound outdated and past their prime: Greenhouse shows that with some modernization, ATS have a strong role to play still. One of the best features of this tool is the direct collaboration with big companies like Doordash and Dropbox. The tool is extremely marketable and designed to be more open and honest about its role than many older ATS. Traditionally, ATS were almost a dirty secret: used to as if HR was skimping their jobs by using them. No more.

This is a tool used by a lot of startups, and is probably better suited to smaller and mid-sized companies, with the latter being where it really thrives. If you have a quickly growing organization with ATS needs, who wants to wait for and HCM or has their HR needs figured out elsewhere, this may be a great choice.

SmartRecruiters – Candidate Experience as a Focus

There is a constant swing as to who has more power: employers or job seekers. At the moment, Job seekers are well aware of their demand, especially in specific sectors. As a result, many ATS are looking to help companies make their prospective employees have as strong an initial experience as possible. Interview scheduling is made easy, with hiring pipelines and referealls managed skillfully. The tool often makes resumes carry over, avoiding that dreaded moment in an ATS where you have to manually plug information from one document to the next. This also works for applicants, allowing top talent to move through a job opening with less pain.

Hiring managers who want to use the product, applicants who find it useful, and recruiters whos jobs have been made easier: win, win, win.

The company says larger organizations are using this as a way to get a slight competitive edge. This is a tool that is used by more enterprise-level companies than Greenhouse. On that aforementioned scale of the suite to slight size, this is more in the middle.

Finding Your Ideal HR Software Solution

HCM vendors are ever-expanding the breadth and depth of their offerings to unify all your HR functions. Still, there will be businesses that benefit more from point solutions. To make your life easier during the decision-making process, keep a close eye on software integrations and feature discrepancies for all of the products on your shortlist. And keep in mind that many key differentiating factors can’t be reduced to a list of features. There may be benefits or challenges that you have to experience first hand—or learn from the experience of other users. 

For example, one UltiPro user found that customer support was a key differentiator when their company struggled to implement and access the software. According to Ted

“When we attempted to use the Recruiting and Onboarding modules, we faced a number of issues that would have stopped us from using the products. They assembled a team to address our most important issues and had them resolved before the go-live date.”

To learn more about how specific HR software vendors support their users and discover more key experiences with ATS vs HRIS vs HCM suites, we recommend consulting trusted reviews from users like you. In the fight between HCMs and point solutions, your dollars are the Endgame—have trust in how you use them! 

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