ATS vs Recruiting Software: What's the Difference? (And Which Do You Actually Need?)

Let me clear up some confusion that costs companies thousands of dollars every year.

A few months ago, a 50-person startup told me they "needed an ATS." After talking for 10 minutes, I realized what they actually needed was recruiting software. They would have bought the wrong thing and wasted $15,000.

Here's the honest breakdown of what these terms actually mean and—more importantly—what you should buy.

The Simple Truth

An ATS (Applicant Tracking System) organizes candidates who apply to your jobs. Think of it as a filing system for applications.

Recruiting software does that PLUS helps you find candidates who haven't applied yet. It's the filing system plus the outbound sales team.

That's it. That's the difference.

But let's go deeper because the devil is in the details.

What an ATS Actually Does

An ATS is designed for one thing: managing the hiring pipeline after someone applies.

Core features:

• Job posting to your careers page and job boards (Indeed, LinkedIn, etc.)
• Resume storage and parsing (turns PDFs into searchable data)
• Application workflow (applied → phone screen → interview → offer)
• Interview scheduling (calendar coordination with candidates)
• Email templates (rejection letters, interview reminders, etc.)
• Basic reporting (time-to-fill, sources of hire, pipeline metrics)

Who needs just an ATS:

• You hire fewer than 20 people per year
• Most candidates apply directly to your postings
• You don't need to proactively source talent
• Budget is under $500/month for recruiting tools

Best ATS-only options:

• BreezyHR ($143-$399/month)
• JazzHR ($300+/month)
• Workable ($189+/month)
• Lever Nurture (their basic tier)

These work great when you're not doing heavy recruiting. They keep you organized without breaking the bank.

What Recruiting Software Actually Does

Recruiting software includes ATS features PLUS tools for finding and engaging passive candidates (people not actively applying).

Additional features:

• Sourcing tools - Chrome extensions to save candidates from LinkedIn
• Recruiting CRM - Database to nurture relationships over months
• Email sequencing - Automated outreach campaigns to passive candidates
• Candidate pipeline building - Build pools before you have openings
• Advanced analytics - Funnel conversion, source effectiveness, recruiter performance
• Career site builder - Employer brand showcase pages
• Employee referral automation - Structured referral programs
• AI matching - Candidate-to-job fit scoring

Who needs full recruiting software:

• You hire 50+ people per year
• You have dedicated recruiters (1+ full-time)
• You compete for hard-to-find talent
• You want to build talent pipelines for future hiring
• Budget is $1,000+/month for recruiting

Best recruiting platforms:

• Greenhouse ($6,000-$25,000/year depending on size)
• Lever ($12,000-$40,000/year)
• SmartRecruiters (custom pricing)
• iCIMS (enterprise, expensive)
• Gem (recruiting CRM add-on, $800+/month)

My Honest Take on Who Needs What

"We're a 20-person company hiring 5 people this year"

You need: A simple ATS like BreezyHR or Workable

You don't need: Greenhouse or recruiting CRM. Seriously, don't let a salesperson convince you otherwise. You'll pay 10x more than necessary and use 20% of the features.

Why: Most of your candidates will apply directly. You don't need fancy sourcing tools when you're making 5 hires. Use the $10,000 you'd save on referral bonuses instead.

"We're a 75-person company hiring 15-20 people per year"

You need: A good ATS with some sourcing features

My pick: Lever Nurture or Greenhouse Essential tier. They have sourcing tools built in without going full recruiting platform.

Why: You're big enough that some roles will be hard to fill, but not big enough to justify a full recruiting team. This is the sweet spot for "ATS-plus" tools.

"We're a 200-person tech company hiring 50+ engineers this year"

You need: Full recruiting software + separate CRM

My pick: Greenhouse or Lever for ATS, plus Gem for recruiting CRM

Why: You're competing for talent. You need to build pipelines months in advance. Engineers aren't applying to job boards—you need to find them on LinkedIn, GitHub, and through referrals.

"We're enterprise (1000+ employees)"

You need: Enterprise recruiting suite

My pick: Honestly? This is above my pay grade. You need an RFP process and probably iCIMS, SmartRecruiters, or Oracle Taleo.

Why: At this scale, you need compliance tools, OFCCP reporting, and integration with enterprise HRIS. These aren't features—they're requirements.

The Pricing Reality Nobody Talks About

Let me give you real numbers because vendors won't:

ATS Pricing (for 50-person company)

• BreezyHR: ~$2,400-$4,800/year
• JazzHR: ~$3,600-$6,000/year
• Workable: ~$4,000-$7,000/year

Recruiting Software Pricing (same company)

• Greenhouse Essential: ~$12,000-$18,000/year
• Lever: ~$15,000-$25,000/year
• SmartRecruiters: ~$15,000-$30,000/year

That's 4-6x more expensive. And the kicker? If you're only making 15 hires per year, that's $800-$2,000 per hire just in software costs.

Do the math:

• If an ATS costs $5,000/year and recruiting software costs $20,000/year
• You're paying $15,000 extra
• You'd need to save 75 hours of recruiter time (at $200/hr) to break even
• Or make one less bad hire (which costs way more than $15,000)

For high-volume hiring, that ROI makes sense. For 10-15 hires? Probably not.

The Hybrid Approach (What I Actually Recommend)

Here's what smart companies do:

Start with a good ATS like Lever or Greenhouse at the basic tier (~$12,000/year). This gives you:

• Solid applicant tracking
• Some sourcing tools built in
• Room to grow
• Decent employer brand

Add specialized tools as needed:

• LinkedIn Recruiter ($8,400/year) - for sourcing passive candidates
• SeekOut ($10,000+/year) - diversity sourcing and Boolean search
• GoodTime ($6,000+/year) - interview scheduling automation
• Gem ($9,600+/year) - recruiting CRM for pipeline building

This "best-of-breed" approach lets you pay only for what you need. Most companies under 100 employees don't need all of these—pick 1-2 based on your biggest pain points.

Red Flags That You're Buying the Wrong Thing

You don't need recruiting software if:

• You have no dedicated recruiters
• Time-to-fill isn't a problem
• You get plenty of applicants organically
• Hiring is mostly entry-level or straightforward roles

I see too many companies buy Greenhouse because they read it's the "best" ATS. It is great—if you need its full power. But it's like buying a Porsche when a Honda would get you there just as well.

You DO need recruiting software if:

• You're spending 10+ hours/week sourcing on LinkedIn
• Your recruiters are managing candidates in spreadsheets
• Time-to-fill is 60+ days for key roles
• You're losing candidates to competitors
• You need to build pipelines before openings exist

The Comparison Table You Actually Need

My Honest Recommendation Process

Step 1: Count how many people you hired last year and expect to hire next year.

Step 2: Calculate your time-to-fill average.

Step 3: Answer this question honestly: "Do candidates come to us, or do we need to go find them?"

If candidates come to you → ATS is enough

If you're hunting for candidates → You need recruiting software

Step 4: Check your budget reality.

• Under $500/month → Simple ATS
• $500-$1,500/month → ATS-plus
• $1,500+/month → Full recruiting platform

Step 5: Remember you can always upgrade. Better to start simple and add later than overpay from day one.

The Bottom Line

Most companies—especially under 100 employees—are perfectly fine with a good ATS. The recruiting software industry wants you to believe you need all the bells and whistles. You probably don't.

Buy recruiting software when:

1. You have full-time recruiters who will actually use it
2. Your time-to-fill is a real business problem
3. You're losing great candidates to competitors
4. You're hiring enough to justify the cost ($20K+ per year)

Otherwise, save the money and invest in referral bonuses, better job descriptions, or improving your interview process. Those will have bigger impact than fancy software.

Not sure which you need? Take our assessment and we'll give you honest recommendations based on your company size and hiring volume.