What Is an ATS? And Is It the Right Fit for Payroll SMB Clients?

Alexis Miller
Sep 19
4 min read

Over decades of recruiting technology shifts, the applicant tracking system (ATS) has remained a staple, created to centralize postings and manage the flow of applications. In enterprise hiring, an ATS is the default. However, in hourly SMB hiring, they’re often a very expensive speed bump.

As a payroll company or a PEO, you may have ATS solutions of your own, but do your clients really need them? We are here to help you solve that question, breaking down what an ATS actually does and what lighter tools you can suggest that could potentially better help your clients hire.

What Is An ATS (Applicant Tracking System)?

An applicant tracking system (ATS) is software that digitizes and automates the end-to-end hiring lifecycle. They are designed to help with everything from posting jobs and parsing resumes to interview scheduling, evaluations, and compliance reporting. Most modern ATS platforms are delivered as SaaS and integrate with payroll tools.

Vendors commonly describe an ATS as a hub for admin tasks, including job distribution, communications, scheduling, scorecards, and reporting. It's a centralized place to run a structured hiring process.

Who Uses an ATS (Applicant Tracking System)?

At the enterprise level, ATS usage is near-universal, as 98% of Fortune 500 companies rely on one. Adoption falls off as companies get smaller; industry research pegs usage among SMBs far below large-company levels.

How Much Does an ATS Cost?

Pricing varies by seats, features, and add-ons, but reputable companies show plans at around $150 per month before extras (and integration/implementation time). For a five-location retailer or restaurant group, those “extras” (data migration, templates, training) often come at great expenses.

How Does an ATS Fit In With Hourly SMB Hiring?

Hourly hiring needs to be local, fast, and mobile-first. Candidates frequently disengage when applications require too many steps, reflecting common behavior with extended online forms.

Streamlined, shorter flows consistently improve completion rates.

Mobile now dominates the apply experience for retail, restaurant, and hospitality jobs, further raising the bar for fast, simple, phone-native workflows.

ATS platforms can be configured for simpler flows, but they are primarily designed for complex, multi-stakeholder hiring environments rather than front-line, hourly roles. In practice, small operators juggle complex features and custom pipelines, ending up with reports no one reads. Worse, poorly tuned filters and rigid workflows can inadvertently screen out good people or slow decisions. Sometimes, ATS technology missteps in screening can hurt recruiting outcomes.

What Hourly SMBs Actually Need (and What Your Payroll Team Can Advise)

Speed over ceremony. A short, mobile-first hiring process that takes basic information (name, contact, availability) beats a 30-minute gauntlet.
Text-first communication. Applicants answer SMS faster than email.
Local reach. Networks that tap into neighborhood job seeker discovery (walk-ins, QR codes on the door, apartment/community boards, and hyper-local job apps).
Zero learning curve. A lightweight hiring tool with little to no training involved is perfect for most SMB teams.

The Reality of an ATS For Hourly SMBs

While an ATS can be beneficial for some small businesses, most owners do not need such complex systems to run their hiring procedures.

Why Small Businesses Aren't the Right Fit for an ATS

Overhead and learning curve are high relative to hiring volume.
Rigid filters and long forms can depress apply and interview rates.
Feature bloat (scorecards, multi-step approvals) slows decisions for simple roles.
Total cost of ownership (configuration, training, add-ons) surprises small teams.

How to Help Your Clients That Don't Need an ATS

Here’s a pragmatic playbook you can offer as a payroll and PEO partner for all of the SMB clients that don't fit the typical ATS mold.

Start with a lightweight job tool made for hourly.

Tools like Juvo Jobs are built for local hiring. The map-based discovery and quick video intro features enable managers to gauge personality and availability in minutes, not weeks. Juvo helps candidates find roles along their commute and lets managers move straight to “Can you come in at 3?” instead of “Please complete Step 7 of 14.” Most importantly, the mobile-first approach encourages larger applicant flow.
Keep the application tiny.

Ask only what you need to schedule an interview: name, phone, shift availability, and (optionally) a short video intro. Your clients' completion rates will skyrocket.
Use text + self-schedule links.

Mobile dominates applies; meet applicants where they are. Tell managers to send SMS nudges with instant calendar links, or use Juvo's chat feature to schedule interviews directly in the app for fast communication.
Centralize just enough.

A simple pipeline (New → Texted → Interviewed → Hired/Not a fit) in a lightweight tool beats a full ATS for most small business clients. If a shared sheet plus a small hiring tool works for a two-location shop, that’s fine! Don’t 'over-engineer' it.
Measure signals that matter.

For hourly, the best hiring metrics to measure are interview and first day of work 'show rates', not the number of custom scorecards completed. In hourly hiring especially, employers can fall wary to 'ghosting' from potential new employees, so having them actually follow through to finish that first week of training is vital.

So… Should Your SMB Clients Buy an ATS?

If your client hires in 20+ states or needs deep compliance and audit capabilities across many brands, an ATS can make sense, especially if they truly use its reporting and approval chains. But for the typical hourly SMB, single or few locations, an ATS is often overkill. It adds complexity where simplicity wins.

Your value as a payroll and PEO provider is to help clients pick right-sized hiring infrastructure that includes:

Local and mobile-first technology to source and screen quickly.
Text or chat capabilities to accelerate interviews.
Tight onboarding integration into payroll once an offer is accepted.

By partnering with Juvo Jobs, you can offer your clients all three! Ready to help your SMB customers solve their biggest business challenge? Connect with the Juvo Jobs team to offer them a hiring system that truly works, no ATS required.

Join the Juvo Network or become a Juvo partner! Download the Juvo Jobs app to see local jobs in your neighborhood.