What Is an ATS? A Plain-English Guide for Small Business Owners
Reading time: 6 minutes | Topic: Recruitment Technology
You've probably heard the acronym. "We use an ATS." "Make sure your CV is ATS-friendly." "Apply through our ATS portal." But what does it actually mean — and more importantly, does your small business need one?
This guide cuts through the jargon and gives you a clear picture of what an ATS does, where it came from, and whether it's the right tool for a team your size.
ATS in Plain English
ATS stands for Applicant Tracking System. At its core, it's a database for managing job applications. When a candidate applies for a role, the ATS stores their CV, tracks where they are in the process (applied, phone screen, interview, offer, hired), and lets the hiring team add notes and make decisions — all in one place.
Most modern ATS platforms also include a CV parsing component — software that reads submitted resumes and extracts structured data from them. To understand what a CV parser does in detail, it helps to know that the parsing step is just one piece of what a full ATS handles.
What an ATS Actually Does
A full-featured ATS typically handles:
- Job posting management — publish roles to job boards from one dashboard
- Application collection — a branded careers page that funnels applications into one inbox
- Resume parsing — extract and store candidate data in structured fields
- Candidate pipeline tracking — move candidates through stages with visual kanban boards
- Collaboration tools — share candidate profiles, leave notes, and score together
- Communication templates — automated acknowledgement and rejection emails
- Reporting — time-to-hire, source of candidates, conversion rates
- Compliance and documentation — audit trails for legal and regulatory requirements
The History of ATS: Built for Big Companies
Applicant tracking systems emerged in the 1990s and early 2000s, built for one specific customer: large enterprises processing thousands of applications per month. Think retail chains, financial institutions, tech companies with global hiring programmes.
The design reflects that origin. These systems are complex, feature-heavy, and built around the assumption that you have an HR team to configure and maintain them. A typical enterprise ATS implementation takes weeks of setup and requires training for everyone who uses it.
The price reflects it too. Enterprise ATS platforms commonly cost £300–£2,000 per month or more, often billed annually with a minimum seat count. For a business hiring two or three people per year, that's a poor return on investment.
The ATS Problem for Small Businesses
Small businesses that try to use enterprise ATS tools run into the same problems repeatedly:
- Too many features — compliance workflows, HRIS integrations, EEO tracking — that you'll never use
- Too much setup — configuring pipelines, stages, and email templates before you can even post a job
- Keyword-only screening — most ATS use basic keyword matching that rejects qualified candidates who phrase things differently
- Annual contracts — you're locked into 12 months of cost even if you only hire once
- Candidate experience damage — clunky application portals lose candidates before you even see their CVs
The mismatch between what enterprise ATS provides and what small businesses actually need is significant. If you want a broader comparison, see our guide on ATS versus manual screening.
What Small Businesses Actually Need Instead
For most small businesses — those hiring fewer than 20 people per year — the full ATS is overkill. What you actually need is much simpler:
- A way to collect CVs in one place (an email folder works fine)
- A way to screen CVs efficiently without reading every word (this is where a CV parser shines)
- A way to track candidate stages (a Google Sheet is sufficient for most teams)
- A way to collaborate with colleagues on shortlisting (shared spreadsheet or document)
A lightweight semantic CV parser covers the hardest part of this — the screening — while leaving the rest to tools you already use. For a curated look at the options, see our breakdown of lightweight ATS alternatives for small teams.
When Does a Small Business Actually Need an ATS?
There are scenarios where a proper ATS becomes justified even for a smaller organisation:
- You're hiring more than 10–15 people per month consistently
- You have multiple open roles simultaneously that different team members manage
- You face compliance requirements — government contracting, regulated industries — that require documented audit trails
- You have a dedicated HR person who will own the system
If none of those apply, you're likely better served by a lightweight approach. For a practical hiring process that doesn't require any specialised software, see our guide on how to hire for a small business.
The Lightweight Alternative to ATS
Cv Bam Bam gives you the screening power of an enterprise ATS — semantic CV parsing, ranked candidates, CSV export — without the setup, cost, or complexity. No account needed.
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