ATS vs Manual Hiring: Which Recruitment Method Works Best?

Hiring the right person for your business is not easy, especially in today’s competitive job market.

For employers, the process can feel overwhelming, whether you are going through many resumes by hand or using recruitment software.

But what works best: an Applicant Tracking System (ATS) or the traditional way of hiring manually?

In this article, we’ll explain both methods, compare their advantages and disadvantages, and help you decide which one is best for your business. Let’s get started!

What is an Applicant Tracking System (ATS)?

ATS (Applicant Tracking System) is a tool that helps companies make hiring easier.

It automates things like collecting resumes, checking candidates, and tracking their progress during the hiring process.

You can think of it like a digital helper that makes hiring faster and more efficient.

Many big companies use ATS. In 2024, 98.4% of Fortune 500 companies used one. That’s 492 out of 500 companies!

The other eight companies might still be using a system of their own, but it’s not easily detected.

Key functionalities of an ATS

Resume Parsing: automatically scans and organizes resumes based on skills, experience, and keywords.
Candidate Filtering: filters applicants to match job requirements, saving you time on shortlisting.
Communication Tools: send emails or updates to candidates, keeping them in the loop without manual follow-ups.
Interview Scheduling: simplifies scheduling interviews with both candidates and hiring managers.
Data analytics: provides insights into your hiring process, like time-to-hire and candidate sources.

What is the Manual Hiring Process?

The manual hiring process is the traditional way of hiring employees without using special software.

It depends on people doing all the work, such as collecting resumes, checking candidates, setting up interviews, and making job offers.

Even though this method has been used for many years, it can take a lot of time and is more likely to have mistakes, especially when there are many applications to handle.

Many small businesses and companies in Malaysia still use manual methods because of budget limits or the belief that it helps make better hiring decisions.

Steps in a Typical Manual Hiring Workflow

Advertising the Job: posting job openings on platforms like newspapers, social media, or online job boards.
Collecting Resumes: receiving applications via email or physical submissions, then manually organizing them.
Screening Candidates: reviewing resumes one by one to identify suitable candidates.
Shortlisting: manually comparing applicants’ qualifications to the job requirements.
Communicating with Candidates: sending emails or making calls to update applicants about their status.
Scheduling Interview: coordinating with candidates and interviewers through phone calls or emails.
Making an Offer: finalizing details and sending offer letters manually.

Key Differences Between ATS and Manual Hiring

Let’s break down the key differences between using an ATS and the traditional manual hiring process, so you can decide which one suits your business needs.

ATS vs Manual Hiring

Aspect	ATS	Manual Hiring
Efficiency	Automated processes streamline hiring, saving time.	Paperwork and communication can be slow and tedious.
Candidate Management	Centralized database ensures easy tracking and updates.	Decentralized records increase the risk of errors and mismanagement.
Scalability	Handles large application volumes seamlessly.	Difficult to manage when recruiting in bulk.
Cost	Requires Initial investment but offers long-term savings.	Lower upfront costs but higher operational expenses over time.
Customization	Offers predefined filters and templates for quick setup.	Allows a personal touch but lacks consistency and structure.

Advantages of Using an ATS vs Hiring Manual

Choosing between an ATS and manual hiring depends on your business needs.

While an ATS offers speed and scalability, manual hiring provides a personalized touch. Here’s a closer look at what each method brings to the table.

ATS Advantages

An ATS is designed to make recruitment faster, smarter and more efficient.

By automating tedious tasks and offering advanced tools, it allows you to focus on finding the right talent without getting bogged down by administrative work.

Automated resume screening

In fact, 86% of ATS users say it reduced their time-to-hire. With an ATS, resumes are scanned and organized in seconds, saving your team hours of manual work.

This efficiency of a key reason why so many companies adopt hiring technology to speed up the process.

Improves shortlisting accuracy

ATS algorithms help identify top candidates based on skills and experience, ensuring you don’t overlook qualified applicants.

This precision contributes to reducing time-to-hire, as fewer unqualified candidates move forward.

Streamlines team collaboration

ATS platforms allow hiring teams to work together seamlessly, sharing feedback and updates in real-time.

This reduces delays caused by miscommunication and helps you move through the hiring process faster

Offers data-driven insights

By analyzing data like time-to-hire and application sources, an ATS helps you identify bottlenecks and improve your recruitment strategies.

Businesses that prioritize speed and efficiency often find this feature invaluable.

Ensure compliance

An ATS simplifies compliance by automatically managing candidate data in line with labor laws and data protection regulation.

This reduces administrative headaches and keeps your hiring process legally sound.

Manual Hiring Advantages

Manual hiring is all about the human touch, offering flexibility and a tailored approach to recruitment.

While it may be time-intensive, it’s perfect for businesses that prioritize personal connections over automation.

Adds a personal touch

Unlike automated systems, manual hiring allows recruiters to evaluate candidates beyond resumes.

You can assess their personality, cultural fit, and other intangible qualities that technology might miss.

Fits small-scale recruitment

For business hiring a handful of specialized roles, manual hiring can be more practical. It gives you full control over every step of the process without needing complex systems.

Flexible hiring criteria

Manual hiring lets you adapt your criteria as you go.

For example, if you find a candidate with unique skills that weren’t part of the original plan, you can adjust quickly without system restrictions.

Drawbacks of ATS vs Manual Hiring

While both ATS and manual hiring have clear benefits, each method also comes with its own set of challenges.

Here’s a closer look at the drawbacks that come with both approaches.

ATS Drawbacks

An ATS brings efficiency and accuracy to recruitment, but it also has limitations that can affect the quality of hiring decisions.

Keyword filtering bias

ATS systems use specific keywords to filter resumes. This means qualified candidates might be missed if their resumes don't have the exact terms the system is looking for.

This can cause bias, especially for candidates who use different words or have unique skills.

High setup cost

Implementing an ATS involves significant upfront cost, including purchasing the software, setting it up, and training your team to use it effectively.

While the long-term benefits often outweigh these costs, it can be a big investment for small businesses.

Limited for creative/ niche roles

For creative or highly specialized jobs, ATS might not work as well.

These systems are good at checking technical skills but may have trouble judging qualities like creativity, cultural fit, or unique experiences.

These qualities are harder to measure and more subjective.

Manual Hiring Drawbacks

Manual hiring, while offering a personal touch, can introduce its own set of challenges, particularly when it comes to scale and efficiency.

Prone to errors and biases

Human judgment is subjective, meaning it's based on personal feelings or opinions.

Without an ATS to organize the hiring process, manual hiring can be affected by personal biases.

This may lead to unfair decisions and missing out on the best candidates.

Time-consuming for large-scale hiring

For companies hiring in bulk or regularly posting new roles, manual hiring is often slow and labor-intensive.

Sorting through resumes, scheduling interviews, and following up with candidates takes up significant time and resources, making it challenging to scale effectively.

Lacks process analytics

Without the insights and analytics that an ATS provides, manual hiring lacks the ability to measure and optimize the recruitment process.

Tracking key metrics like time-to-hire, candidate quality or source effectiveness is difficult, which means there’s less opportunity for continuous improvement.

When to Choose ATS vs Manual Hiring

Deciding between an ATS and manual hiring depends on your company’s needs, the type of roles you’re hiring for, and the scale of recruitment.

It’s best when your company’s needs align with the following:

ATS

High-volume hiring. When you’re hiring multiple positions or receiving a large number of applications, ATS helps streamline the process.
Repetitive roles. For roles with standardized requirements or job descriptions, an ATS efficiently handles large batches of similar resumes.
Established hiring workflows. If your company already has a clear, structured hiring process, an ATS will help you maintain consistency and speed.
Efficient candidate screening. When you need to quickly filter and shortlist candidates based on specific criteria, an ATS automates this for faster results.

Manual

Low-volume hiring. For hiring a smaller number of roles, especially those requiring a more personal touch in the evaluation process.
Creative or specialized roles. When hiring positions that require unique, often subjective, qualities (e.g., creativity, cultural fit) that ATS may not be able to fully assess.
Flexible criteria. When the job requirements are constantly changing or need to be adjusted on the fly, manual hiring allows for more adaptability.
Personalized candidate evaluation. If you want to build strong, personalized connections with candidates and assess soft skills through interviews and informal interactions.

Why Businesses Are Making the Switch to ATS

As companies grow and hiring demands increase, many are turning to ATS to improve their recruitment processes. Here are the key reasons:

Improved Efficiency

ATS automates time-consuming tasks like resume screening, reducing the manual workload and speeding up the hiring process.

Faster Time-to-Hire

By streamlining candidate management and communication, ATS helps companies fill positions faster, which is crucial in today’s competitive job market.

Better Candidate Experience

ATS platforms often offer seamless communication tools and self-service features, improving the overall candidate experience.

Scalability

As companies grow, the volume of applications increases. ATS systems handle large numbers of applications effectively, making it easier to scale hiring efforts without sacrificing quality.

Reduced Human Error

By automating tasks, an ATS minimizes the risk of errors that can occur in manual processes, ensuring greater accuracy in candidate shortlisting.

Cost Savings in the Long Run

While the initial setup cost of an ATS can be high, it ultimately saves businesses money by reducing time-to-hire and streamlining recruitment, leading to more efficient operations.

Frequently Asked Questions (FAQs)

Can small businesses afford an ATS?

Yes, there are affordable ATS options designed specifically for small businesses. Many offer scalable plans that fit different budgets, allowing small businesses to improve efficiency without a huge investment.

Is it possible to combine ATS and manual hiring methods?

Absolutely! Some businesses use an ATS for initial candidate screening and then switch to manual hiring for final interviews or specialized roles. It’s all about balancing efficiency and personal touch.

What are the best ATS options available in Malaysia?

Popular ATS options in Malaysia include Workable, BambooHR, and local platforms like Maukerja and AJobThing. These platforms offer localized features, customer support, and are well-suited for businesses in Malaysia looking to streamline their hiring process.

How to transition from manual hiring to ATS seamlessly?

Start by choosing a simple ATS that fits your company’s needs, and integrate it gradually. Train your hiring team, update your workflows, and ensure smooth data transfer from manual records to the ATS.

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