Return on Investment

The Return on Investment (ROI) of an Applicant Tracking System is dependent on many factors within your
organization. This document can be used as a tool to identify the costs and savings associated with your decision to
purchase an applicant tracking system. Where possible, we have provided some benchmark data on costs and
savings to help with your analysis, but the accuracy of this analysis is directly related to your ability to gather
appropriate cost and savings data related to your specific organization. The last page of this document contains a
cost analysis worksheet that can be utilized to compute your return on investment.

One Time Costs

Software License Costs:
(a1) - Self-hosted Solution: The minimum requirement for most self-hosted solutions would include
operating system software licenses, database software licenses, third party software licenses and
application software licenses. The operating system costs will vary with the size and complexity of your
application software. These costs may be as little as $2,000, or as much as $30,000. Your IT staff may be
able to provide you with this information. If you are unsure of your software license costs, we would
recommend that you use the following formula as an estimate (this is a rough estimate that assumes that the
more employees you have, the more licenses you will need):
# of employees in your company x $2
Example: 1,500 employees x $2 = $3,000

(a2) - Outsourced Solution: The myStaffingPro Applicant is a hosted solution and does not require any
operating system software licenses, database software licenses or third party software licenses. The
application software license fees are included in the recurring costs section
Hardware Costs:
(b1) - Self-hosted Solution: A self-hosted solution will require some server hardware to centrally house the
application and the database of applicant information. Ideally, your in-house solution would also include
systems for redundancy, security and disaster recovery. Your IT staff may be able to provide you with an
estimate of these costs. Unless you are going to be able to house your Applicant Tracking System on an
existing hardware component, we would suggest that you use a minimum cost of $6,000 to include a basic
web server and database server.
(b2) - Outsourced Solution: The myStaffingPro Applicant is a hosted solution and does not require any
server hardware.
Programming, Configuration and Training Costs
(c1) - Self-hosted Solution: A self-hosted system would require one of the following:
1. Implementation charges associated with the installation of a third party Applicant Tracking
System.
-or 2. IT Development charges related to creating a proprietary system. A very basic system would
require at least 100 hours of software development to create. The average cost of a Software
Developer is $80/hour. We would suggest that the minimum cost for a basic system would be
at least $8,000.
(c2) - Outsourced Solution: Enter the Implementation, Customization and Training costs from your
myStaffingPro quote into this box.

myStaffingPro.com

Recurring Costs - Annual Costs

Software License Costs:
(d1) - Self-hosted Solution: If any of the software that is required for your self-hosted solution (operating
system software licenses, database software licenses, third party software licenses and application software
licenses) requires a recurring fee, enter this cost here.
(d2) - Outsourced Solution: Enter the License Fee cost from your myStaffingPro quote into this box.
Support:
(e1) - Self-hosted Solution: A self-hosted system would require one of the following:
1. Annual support charges from your third party Applicant Tracking System provider.
- or 2. In-house IT Support. On average, our customers require 5 hours of support for every 1,000
employees in their company. To calculate your annual in-house support cost using this
information, use the following formula:
# of employees in your company/1000 x 5 hrs x 12 months x $80/hr
Example: 1,500 employees/1000 x 5 x 12 x$80 = $7,200
(e2) - Outsourced Solution: Support Fees are included in your myStaffingPro License Fee.

Cost Savings - Annual

(S1) - Recruiter Productivity:
Studies have shown that an automated Applicant Tracking System increase recruiter productivity by an
average of 15%. Use the following formula to estimate your cost savings in increased productivity:
# of recruiters x Annual Cost of a recruiter x .15
Example: 2 Recruiters x Annual Cost of $60,000/each x .15 = $18,000
(S2) - Advertising Efficiencies:
Most Applicant Tracking Systems provide metrics on the effectiveness of recruitment advertising sources.
Our users have claimed that the savings that they have gained by using these metrics are as high as 35% of
their advertising budget. On average, our customers claim that the addition of the web-based application
increases their applicant flow by 30%, resulting in less need for recruitment advertising. Additionally, many
users of Applicant Tracking Systems can advertise less for their open positions because they are able to fill
jobs from the database of candidates that have applied to previous job openings. Use the following formula
to estimate your cost savings in your recruitment advertising:
Annual Advertising Budget x Expected % Savings
Example: $40,000 x 10% = $4,000
(S3) - Agency Fees:
It is not uncommon for companies who have a manual Applicant Tracking System to pay a recruiter a fee for
an applicant who applied to the company directly, but was not able to be located by the recruiter at the time
the job was posted. Most Applicant Tracking System users mine their databases for candidates every time
they have a job opening to prevent this situation. Additionally, increased applicant flow lowers the need to
use agency recruiters. Use the following formula to estimate your cost savings in your Agency Fees:
Annual Agency Fees x Expected % Savings
Example: $70,000 x 10% = $7,000
(S4) - Time to Fill:
An Applicant Tracking system can reduce the time to fill for your open positions. Our clients who track this
metric, have relayed that their time to fill has decreased by any average of 20% by using our system. To
calculate your savings in Time to Fill, use the following formula:
Current Time to Fill ( days) x Cost/Day of unfilled position x # positions filled/yr x % decrease
Example: 6 days x $200/day x 120 positions filled/year x 20% = $28,800
(S5) - Other Cost Savings:
An Automated Applicant Tracking System can provide many other savings components that are not easily
quantified. Some of these include:
Increased Quality of Hire - increased productivity of newly hired employees because the quality of hire
increases
Lower Legal Risk - A standard process of recruiting consistent approach
Improved Cooperation between Recruiters and Hiring Managers
Postage / Paper Savings

HR Services, Inc. 2009 www.myStaffingPro.com 800-939-2462

Cost Analysis Worksheet

One Time Costs
Software License Costs
Hardware Costs
Programming, Implementation and Training

Self-hosted Solution
(a1)
(b1)
(c1)

Outsourced Solution
(a2)
Not Applicable
(b2)
Not Applicable
(c2)

Total One Time Costs - (T1)

Recurring Costs - Annual Costs

Software License Costs
IT Support

(d1)
(e1)

(d2)
(e2)

Not Applicable

Total Annual Recurring Costs - (T2)

Cost Savings - Annual

Recruiter Productivity

(S1)

Advertising Efficiencies
Agency Fee
Time to Fill
Other Cost Savings

(S2)
(S3)
(S4)
(S5)

Total Cost Savings - Annual - (T3)

How long will it take to payback your investment in your Applicant Tracking System?
If your Annual Cost Savings are larger than the Annual Recurring Costs, your investment in an Applicant Tracking
system has a positive payback on your investment. Use the following formula to determine your payback period for
both options:

Formula
Total Cost Savings - Annual (T3)
Minus Total Recurring Costs - Annual Costs (T2)
Equals your Annual Net Savings
Total One Time Costs (T1)
Divided by Annual Net Savings
Equals Payback in Years

Example:
$26,000.00
- $14,000.00
$12,000.00
$15,000.00
$12,000.00
1.25 Years

HR Services, Inc. 2009 www.myStaffingPro.com 800-939-2462