Mountains of Excel spreadsheets used to be part of the recruitment experience as hirers juggled interview dates, assignment results, and job offer responses.

While some hirers still use these outdated methods, they can result in bad hires, wasted time, and endless headaches. Thankfully, an applicant tracking system (ATS) can address these issues—or at least it should.

The trouble is that not all ATS tools are equal. What works for one organization might not suit another. With this in mind, it’s time to explore the 11 best ATS options in 2025 and find the perfect fit for your organization:

11 best applicant tracking systems at-a-glance

• Workable: Best for automating low-volume recruitment
• Breezy HR: Best for small companies with tight budgets
• Toggl Hire: Best for assessing talent and proving a great candidate experience
• Greenhouse: Best for beautiful data visualizations
• Zoho Recruit: Best for controlling costs and harnessing automation
• JazzHR: Best for replacing spreadsheets quickly and affordably
• Lever: Best for leveraging your talent pool
• Manatal: Best for harnessing the power of AI searches
• monday.com: Best for integrating hiring with other HR processes
• GoHire: Best for simplifying SMB staffing
• SmartRecruiters: Best for larger enterprises

Best applicant tracking systems pricing overview

• Workable: $189, $313, or $628/mo
• Breezy HR: $157, $273, or $439/mo
• Toggl Hire: Free plan available, $199, or $349/mo
• Greenhouse: Pricing unavailable
• Zoho Recruit: $25, $50, or $75/mo
• JazzHR: $75, $269, or $420/mo
• Lever: Pricing unavailable
• Manatal: $15, $35, or $55 per user/mo
• monday.com: $10, $14, or $23 per user/mo
• GoHire: $99, $199, or $299/mo
• SmartRecruiters: Pricing unavailable

What to look for when comparing applicant tracking systems

Applicant tracking systems are pretty diverse, so what works for one company won’t satisfy others. Your needs are unique, so take some time before choosing an ATS. As you decide, use these key factors to guide the process.

Ease of use

An ATS is no good if you can’t get to grips with the interface. Systems requiring lengthy adoption periods waste valuable time. Good solutions are both powerful and simple—and not all ATS providers strike that balance.

The best ATS systems have intuitive interfaces and great support. Navigation systems let you create multiple campaigns and manage candidates smoothly. There’s no loose ends or confusion—just clearly laid-out tools.

Candidate tracking

It should be obvious, but ATS tools must track individual candidates from sourcing to hiring. The best solutions let you analyze each candidate, including tests, resume information, and interview feedback.

Talent pool management is a bonus, making it easier to reach passive candidates and convert their interest with the right role on offer.

Candidate skills assessments

A good ATS lets you discover what every candidate offers beyond their past work experience or academic qualifications. Look for extensive skills test libraries, home assignments, video interviews, and flexible data analytics to understand each metric.

Candidate relationship management

Your ATS should make each candidate feel valued and well-informed. Candidate relationship management (CRM) tools keep applicants informed about tests and interview scheduling. They also nurture strong connections outside the recruitment process, keeping your talent pool vibrant.

Automation tools

A high-quality ATS automates many traditional recruitment tasks, such as candidate scoring, resume checking, test feedback, and interview management. This is time efficient and limits human error, making recruitment more consistent.

11 of the best applicant tracking systems of 2025

We’d obviously love you to choose Toggl Hire, but it’s always worth assessing your options to make a smart decision.

The list below includes 2024’s best applicant tracking solutions. We’ve investigated every option, picking out leaders for ease of use, candidate experience, and automation—the stuff that matters.

Workable

Workable is a simple and adaptable full-cycle ATS designed to cut recruiting times for small businesses. For instance, one-click automation features let you generate job descriptions and structure interviews quickly.

Candidate tracking is a Workable specialty. Advanced search functionality makes it easier to sift talent pool members, while candidate information tags identify high-potential hires through the recruitment pipeline.

On the downside, Workable is limited unless you choose the expensive Premier package. You can buy extra features to beef up its capabilities, but it’s easier to source an ATS that’s already pre-equipped with the features you need.

🌟 Standout features

• Talent pool management via the People Search tool
• Simple CRM for smaller campaigns
• AI-powered automation features
• Integrations with HR workflows

⚖️ Pros & Cons

Pros	Cons
Automation tools save time for smaller companies	CRM can become confusing with larger applicant volumes
Talent pools are easily created from your existing resources	Automated job descriptions may dilute quality
Part of Workable HR solutions, allowing simple integration	Add-ons come with extra costs

💰 Pricing

• Starter: From $189/mo for two active roles. Enables all of Workable’s core applicant tracking system features. Add-ons like video interviews are available for a supplementary fee.

• Standard: From $313/mo or $3,756/year for unlimited active roles. Extra fees are applicable for add-ons.
• Premier: From $628/mo or $7,536/year, includes native language options and hiring plans. Video interviews and assessments are free of charge.

💬 Why users love Workable

“I like being able to manage multiple jobs and seeing them on one dashboard. I also like how easy it is to move candidates through the stages of the hiring pipeline, efficiently, and also customizing pipelines according to specific hiring needs. Email templates are also also a great tool, and I’m able to organize them according to departments.” —Charlotte D., a mid-market user

“Workable has a seamless design making it really easy to use and navigate. I like how it is consistently being updated too with tools such as AI generators—all of these, alongside the more traditional features, makes recruiting and improving candidate experience super forward-thinking. Blind hiring is also a great feature but you are not able to set it at certain stages which almost makes the feature a little redundant as shortlisting can be done at more than one stage.” —A mid-market user in marketing and advertising

Breezy HR

Breezy HR impresses with its “bootstrap” free plan, which delivers a fully functional ATS for zero charge. Users can manage candidates and create a landing page for single job openings.

Paid packages expand capacity, adding more appealing features. Tutorials introduce the drag-and-drop interface, helping novices get up to speed. Users can automate job descriptions and postings, instantly zapping adverts to job boards.

There’s also an intelligent Candidate Match feature. This grades job applications according to role requirements and credentials. Easy-to-read scorecards and reports provide at-a-glance information about candidate strengths.

On the other hand, Breezy HR lacks in-depth skills testing and full CRM functions. It’s a simplified ATS that bridges the gap between old-style spreadsheets and in-depth applicant tracking.

🌟 Standout features

• Powerful free package
• Candidate Match to parse resumes and filter applicants
• Automated job posting and descriptions

⚖️ Pros & Cons

Pros	Cons
Simple to learn, especially with help from tutorial wizards	Basic CRM functionality
Automation saves time	Limited skills testing features
Streamlined candidate assessment tools	Confusing at high volumes
Affordable (or free!) at low volumes	Prices rise steeply for larger companies

💰 Pricing

• Bootstrap: The free trial package includes basic ATS features, but users are limited to a single job.
• Startup: From $157/mo for unlimited user numbers and candidates. Basic automation features are available.
• Growth: From $273/mo for extra features like automated CV checking, customizable scorecards, and e-signatures.
• Business: From $439/mo for more ATS integrations and talent pool management functions. Enhanced user support is also included.
• Extras: Add SMS messaging for $41/mo and AI candidate matching for $137/mo. Anti-bias Incognito Apply tools also cost $137/mo.

💬 Why users love Breezy

“The set up was so simple and intuitive it made the transition to an ATS very very easy and digestible to co-workers who had never used it before. I was able to get the system almost in complete working order within a matter of days.” —Max S, Corporate Recruiter for a mid-market company

“I was looking for help with hiring an assistant, and BreezyHR was awesome! The platform is very intuitive, with lots of time-saving features that made the process smooth. Some features are only available with higher-tier subscription plans, which are beyond our company’s budget. It would be beneficial if there were options to access certain features for a smaller additional fee.” —Anja D, small business Managing Director

Toggl Hire

Toggl Hire is a full-cycle ATS that achieves two holy grails of modern recruiting: delivering exceptional experiences for every candidate and testing skills to choose the perfect hire.

To achieve this, users can customize tests using our library packed full of 19,000 expertly-curated questions across hundreds of skills. Templates radically speed this process up. To get to know your candidates inside out, video interviews and homework tasks add even more screening features.

Toggl Hire’s ATS also streamlines your recruitment pipeline. Instead of relying on standard resumes, you can assess candidates using single tests and then deliver personalized feedback, which adds value to the candidate experience. And if you want to save any high-potential candidates for a future role, Toggl Hire makes it easy to add pre-qualified candidates to your talent pool.

The intuitive candidate pipeline makes it easy to access your candidate management workflows at any time. If you need to integrate with the rest of your tech stack, recruiters can add numerous integrations, including BambooHR, Slack, and others.

🌟 Standout features

• 180 skills test templates and 19,000 questions from experts
• Automated test feedback
• Interview scoring
• AI-based resume parsing
• Deep metrics to extract testing insights
• Integrations with HR platforms and collaboration tools
• Asynchronous video interviews
• Homework assignments
• Clear ATS dashboard

⚖️ Pros & Cons

Pros	Cons
Users report an 86% reduced time to hire, 10x more qualified candidates, and 93% predictive hiring confidence	We are still building features to support more robust candidate sourcing needs
The only ATS on the market that combines skills test and full-cycle hiring features	Expert-created homework assignments are only available on paid plans
Detailed feedback delights candidates and keeps them engaged	Limited integrations with onboarding/employee management software (because we’re building our own 🤫)
Simple interface that’s easy to learn and customize
Free account includes all core features

💰 Pricing

• Free: Our free plan offers basic ATS and assessment features ideal for small businesses; an unlimited # of users can have 1 active job opening at any time and use 1 skills test for that role; access candidate data for up to 30 days
• Starter: From $199/mo (billed annually) for 3 active job openings; skills testing capacities expand drastically, allowing you to test unlimited candidates with unlimited skills tests (plus access advanced assessments like async interviews and more!)
• Premium: From $349/mo (billed annually) for everything on the Starter plan plus unlimited job openings, homework assessments, integrations, and more

💬 Why users love Toggl Hire

“I simply love Toggl Hire! The interface is beautiful and the user experience is super! Its also very agile and I can make out its because Toggl is known for their remote monitoring expertise way before Covid! Because its a skills first talent acquisition platform, that takes off a lot of pressure from my recruiters.” —Anupama K., a mid-market user

“I like how easy it is to navigate and generate tests. Additioanally, the ability to easily shortlist candidates and provide instant feedback is amazing. Their pricing is simple and has no hidden fees. The best part is that you are not capped at how many candidates you can receive. No extra cost per cluster of candidates. My previous platform made it difficult to customize tests and I needed to pay for add-ons all the time. I’m happy that I switched over to Toggl Hire. It has everything that I was looking for in such a platform and has most of the skills that I need. For the skills that they don’t have, I was able to easily generate my own custom questions.” —A small business user in the management consulting field

Greenhouse

Greenhouse seeks to enable data-driven and bias-free hiring decisions. That’s a big claim, but the ATS delivers on data collection, analysis, and reporting.

Greenhouse users can harness over 40 reporting templates, including metrics on candidate quality, time to hire, and more. There are many visualization options, making it easy to understand and act upon hiring data,

Greenhouse also features over 500 integration options. You should be able to blend the ATS and other human resources tools alongside social media channels and departmental workflows. The ATS features plenty of CRM options, too, including automated email look-ups and personalized communications.

🌟 Standout features

• Reporting metrics and visualizations
• Talent pool management
• Over 500 integrations and customization options

⚖️ Pros & Cons

Pros	Cons
Integrates well with other HR systems	Greenhouse’s pricing is not transparent
Great for data analysis	The ATS may be challenging for new users
Good for analyzing hiring at low volumes

💰 Pricing

Greenhouse does not publish a fixed roster of prices. Instead, prices are “tailored” to different company sizes. You can choose between three tiers:

• Essential: Covers core Greenhouse ATS features for a single event
• Advanced: Covers 10 events. Adds more customization options including bulk candidate management and custom reports.
• Expert: Unlimited events. Includes candidate prospecting, take-home tests, and in-depth reports

💬 Why users love Greenhouse

“Greenhouse was a comprehensive ATS that had everything we needed from job postings and job boards, tracking applicants through the hiring process, scheduling interviews, gathering feedback and sending offers.” —Alina, a recruiting supervisor

“Greenhouse is an essential part of the recruiting process. From keeping our pipelines healthy, dispositioning candidates in a timely fashion, and all other important functions, Greenhouse helps us grow!” —Rebecca A, Event Marketer for a large software company

Zoho Recruit

Zoho Recruit is a great option for startups with big ambitions but limited budgets. The ATS works on a per-recruiter model, and customers add extra users as required. This makes it easy to optimize costs and needs as you scale. The Forever Free option means you can try Zoho thoroughly before committing.

The ATS itself is simple but effective. The AI assistant provides candidate recommendations, and you can automate rejections or add failed candidates to email lists. There’s also a career site builder and tools to customize job listings. Overall, Zoho’s features offer good value for companies with modest needs.

Beware though. Zoho Recruit is built to integrate with other Zoho products (like the CRM app). It works well as part of a Zoho implementation but is less useful as a standalone ATS.

🌟 Standout features

• Zero code career site builder
• Source Boosters AI-powered candidate search
• Social sourcing and one-click multiple job board posting
• Predictive data analytics
• 48-hour background checks

⚖️ Pros & Cons:

Pros	Cons
Affordable and flexible pricing	Requires other Zoho products to work effectively
Time-saving AI tools	Poor integrations with popular collaboration tools
ATS essentials included	No skills testing or in-depth assessments

💰 Pricing

• Free: The ATS free forever plan covers one active job and includes core Zoho features
• Standard: From $25/mo for up to 100 active roles. The package includes core features like interview feedback and candidate sourcing
• Professional: From $50/mo, including AI-assisted recruiting for 250 active roles. Features candidate portals and deeper analytics
• Enterprise: From $75/mo for up to 750 roles, including more customization functionality and integrations with Google Meet and Microsoft Teams

💬 Why users love Zoho Recruit

“Overall experience with Zoho Recruit is excellent. I would highly recommend it to anyone who is serious about building a team and tracking all the candidates passing through their system.” —Jaideep, Head of Product for a financical services company

“The tool is so easy to learn and use. It is cost-effective as compared to its return on investment. I have been able to integrate it with other tools hence making work easier.” —Cybele, Human Resources Manager for a medium-sized US company

JazzHR

Known for its easy-to-use interface, JazzHR is a sleek ATS that lets you post job ads, track candidates, and integrate recruiting with other HR tasks. It’s also affordable—but cheaper packages have far fewer features to work with.

The cheapest JazzHR tier lets you automate job posts to 18 popular boards but limits users to three active roles. It also lacks full-cycle ATS features like interview scheduling and screening assessments. There’s no skill testing either, making it tough to assess candidate abilities.

As you pay more, JazzHR becomes more powerful. Pro packages include detailed reporting functions, more automation features, and unlimited active roles. But the price rises sharply from Hero upwards, excluding many small businesses.

🌟 Standout features

• Easy-to-use interface
• Automated candidate tracking and job posting to 18 boards
• Knockout questions to screen applicants
• Multi-task management for bulk actions
• Data visualizations (Plus and Pro tier)

⚖️ Pros & Cons

Pros	Cons
Free and Hero packages provide a good foundation	Cheaper packages are not full-scale ATS tools
Easy to use and learn	Expensive as you add functionality
Good reputation for customer support	Some reviewers mention buggy integrations

💰 Pricing

• Free trial: A 14-day access to Pro tier ATS functions
• Hero: From $75/mo for basic job posting and management tools. Includes 3 active roles, then charges $9/job every month.
• Plus: From $269/mo for unlimited active roles, assessment features, and bulk management tools
• Pro: From $420/mo for bundles in e-signatures, visual reporting, enhanced support, and more integrations
• Extras: Users can add ATS features like Zoom Integration for $29/mo or SMS for $39/mo

💬 Why users love JazzHR

“I’ve been using Jazz HR for our hiring needs, and I couldn’t be more pleased with the results. The customizable workflow feature allows me to tailor the recruitment process to our specific needs, making it easy to add personalization at every stage.” —Natalie C, Senior Talent Acquisition Manager at a small business

“JazzHR is easy to use. I find the ability to sort applicants with star ratings or by their status in the hiring process really useful when trying to higlight appicants for review by other team members. Its ability to integrate with other tools is also very useful. I have had a couple instances when JazzHR has kicked my personal account out of the businesses wider team. This meant I have had issues logging in and accessing applications. I did go to the customer support who were helpful and rectified the issue but it did cause some lost time during the hiring process.” —Ethan W, Operations Manager at a mid-market US company

Lever

Branded as a “talent acquisition suite”, the Lever ATS is great at attracting hard-to-find passive qualified candidates, but you may prefer a different solution for general recruiting, candidate experience, and talent assessment.

Lever offers user-friendly candidate sourcing and tracking. Users can integrate the ATS with Google Chrome via a well-designed talent dashboard, and users find it easy to learn the system without much outside help. Automation tools save time, and users report good experiences hiring at volume.

On the negative side, critical users mention a lack of reporting functions. Also, Lever’s software solutions do not include a high-quality mobile app, and many users mention performance issues.

🌟 Standout features

• Integrated tracking and CRM
• Smooth interview scheduling
• Over 300 app integrations
• DEI and compliance dashboards
• E-signatures for secure onboarding

⚖️ Pros & Cons

Pros	Cons
Good customer support	Not transparent about pricing
Works well when hiring at volume	Some users report slow performance
Strong reputation for scheduling and collaboration	Setup can be complex

💰 Pricing

Lever does not provide transparent prices on its website. You’ll need to contact the company for a quote. Users can pick from two packages:

• Lever: Core features, including DEI solutions, analytics, single sign-on, and some API integrations.
• Lever for Enterprise: Enhanced ATS functions include offer management and requisition management. Features integrations with Slack and more automation options.

💬 Why users love Lever

“Lever allows for a great amount of customization, which is why we chose it over other out of the box solutions. We are over a year into our contract, and it gets better with each new release. You do need to have a good idea of what you want to accomplish with it in order to use it to it’s maximum potential.” —Geoff P, Talent Acquisition Director for a medium-sized company

“I like that there are more report insights than our previous ATS where reports were very manual and often times not detailed. I also like that we were able to create automation workflows for our process to save us a step in the process. It seems to be organized well and user friendly.” —Kelsey M, Senior Recruiter for a mid-sized company

Manatal

Manatal’s per-user pricing is transparent and cost-effective for smaller organizations. With AI assistance, time-poor HR teams can create job descriptions, while automated candidate matching saves time.

Another standout area is managing your candidate database. Manatal enables AI-enhanced Boolean searches to pinpoint potential hires. Customizing searches for open positions is easy and intuitive.

Despite these strengths, there are some things Manatal cannot do. For instance, assessment systems are a little simplistic. You can’t use Manatal to deep-dive into Python skills, but you can use it for basic hiring on a budget. That could suit many smaller businesses.

🌟 Standout features

• In-depth candidate searches
• Candidate matching
• User-based pricing model
• Automated job description tools

⚖️ Pros & Cons

Pros	Cons
Transparent and affordable prices	Poor candidate assessment tools
Uses AI well to save time and find candidates	Basic CRM features
Smart candidate profiling gets more from your talent pool

💰 Pricing

• Professional: From $15/user/mo. Limited to 15 users and up to 10,000 applicants.
• Enterprise: From $35/user/mo. There are no job limits. Adds workflow automation.
• Enterprise Plus: From $55/user/mo. Includes user groups, report building, SSO, and priority support.
• Custom Plan: Provides a dedicated account manager and additional ATS customization options.

*Customers can access a free trial for professional, enterprise, or enterprise plus packages.

💬 Why users love Manatal

“At the end of each month, it used to take us hours to find out things like the best time to hire or how well each channel did. We can now make those reports with just a few clicks. Overall, the platform is easy to use, and the team picked it up very quickly.” —Osbert N, Recruitment Consultant at a mid-market firm

“Setup is easy, and you can start using it right away. Excellent support is offered both through live chat and through an unlimited number of training sessions. Some of our suggestions, such as introducing a certain job board, have been implemented, showing that they are listening to our suggestions.” —Yanik S, Head of HR for a small business

monday.com

monday.com is a flexible work management platform you can customize to function as an ATS. For example, you can use the monday.com boards to house your candidate data, automate emails and notifications, or communicate with your in-house hiring teams.

If you prefer not to set up your own ATS from scratch, you can also use JobFlows, a dedicated recruiting software built on top of the monday.com Work OS.

Note that JobFlows doesn’t work as a standalone product which could complicate matters for some buyers, as you’ll need to sign up for both monday.com and JobFlows plans. Of course, if you already use monday.com in your tech stack, this won’t be an issue.

JobFlows integrates with talent pool resources like LinkedIn and includes a “no code” career site builder to capture attention. Automation tools include resume parsing from emails, which reduces screening time. Customizable dashboards profile every candidate, staying on top of the recruitment process.

The main downside to using JobFlows or monday.com is the lack of skills testing—you’ll need to integrate with another third-party software to assess top talent before progressing them through your hiring funnel.

🌟 Standout features

• No code career site-building
• Seamless integration with other key tools like Zoom and Google
• Automated screening
• Hundreds of email and job description templates
• Customizable dashboards

⚖️ Pros & Cons

Pros	Cons
JobFlows slots into existing monday.com implementations	Limited skills assessments
Either JobFlows or the monday.com Work OS store candidate info	Neither offers a full-cycle applicant tracking system unless you’re willing to build it yourself
Both tools offer tons of customization options	Integrating with third-party tools to gain the functionality you need may be too complex

💰 Pricing

• A free monday.com plan covers up to two users and three boards, while premium plans start from $9 per seat/mo
• An Unlimited JobFlows plan costs $125/mo paid annually

💬 Why users love JobFlows on monday.com

“My favorite use for monday.com has been to create our applicant-tracking system during a hiring process.” —Stephen J, Director of Growth at a US small business

“Jobflows helps me to manage a very fast communication flow, avoiding bounces between mailing lists and much more, allowing me to speed up my recruiting work.” —Bruno, CEO in Italy

GoHire

GoHire is a less well-known ATS but well worth a look. Its mission is to save SMBs time (and money) by simplifying complex hiring processes. The ATS software combines job sourcing, job descriptions, branded landing pages, applicant tracking, and job offers. Users can master the full recruitment cycle from end to end.

Every GoHire package includes a streamlined careers page to list openings. Starter users can search candidate data. Automated emails also enable personalized candidate communication. Scheduling interviews is also a breeze.

So what’s the catch? Simplicity has its problems. GoHire isn’t great for understanding candidate personalities and skills. Reporting is fairly basic, and HR teams rely on CVs or questionnaires to filter applications.

🌟 Standout features

• Careers page for every user
• Applicant tracking from start to finish
• AI-assisted sourcing and assessment
• Searchable candidate databases

⚖️ Pros & Cons

Pros	Cons
Simplicity ensures a strong user experience	GoHire has speed issues
Affordable ATS for unlimited roles	Simplistic candidate assessments
	Users report customer service issues

💰 Pricing

• Starter: From $99/mo for all standard ATS features but limited to three active roles
• Growth: From $199/mo covering 10 active roles, with screening questions, activity feeds, pipeline customization, and enhanced collaboration.
• Pro: From $299/mo for unlimited roles. Adds video questionnaires, scorecards, reporting functionality, and advanced automation.

💬 Why users love GoHire

“This job board is easy to manage & the features are so simple to learn. It took me less than a day to get all our features set up & jobs posted. I really appreciated that they offered a free trial period.” —Denise, Company Director from New Zealand

“Great! We used a much bigger (more expensive) platform previously and down scaled for a number of reasons—this provider has delivered exactly what we needed.” —Victoria, Head of People for a UK company

SmartRecruiters

So far, most of the applicant tracking software listed has been pitched at smaller or medium-sized companies. That’s not the case with SmartRecruiters, which appeals to larger enterprises and more experienced HR teams.

Why? SmartRecruiters has plenty of functionality but a steep learning curve. It’s not for businesses that are shifting spreadsheets to talent pipelines or have lower-volume hiring needs.

The main platform includes core ATS functions like reporting, job board integration, candidate assessment, managing job offers, and scheduling interviews. You can instantly post to social media channels or even create internal recruitment pipelines for targeted staffing and employee referrals.

SmartRecruiters excels in talent pool management. Branded career pages and tailored ad campaigns help you reach potential candidates (and wider applicant pools). The system is dynamic, too, adapting to customer suggestions—always good vendor practice.

On the negative side, expect costs to be high, even though they’re not transparent on the vendor website.

🌟 Standout features

• Full-cycle ATS features
• Post to 200 job boards
• Social media integration
• Branded career pages
• Intuitive dashboard

⚖️ Pros & Cons

Pros	Cons
Streamlined ATS guides recruitment from start to finish	Expensive solution
Instant job posting and targeted ads	Not simple to configure
Good customer support	Relatively small skills test library

💰 Pricing

Companies must contact SmartRecruiters for a quote, and the company does not advertise fixed prices. The pricing model features a Core package. Users can add extras according to their needs.

• Core: Functionality includes the ATS, reporting dashboards, and integration with over 200 job boards.
• Extras: Users pay for each add-on separately. Modules include CRM functions, conversational AI bots, SmartJobs to advertise roles, and SmartAssistant’s AI-powered candidate scoring.

💬 Why users love SmartRecruiters

“Very robust and inclusive software. It has a wide coverage and deeper functionalities, which makes it unique.” —Georgina, Talent Acquisition Leader in Australia

“As a new manager, I find SmartRecruiters an easy system to use to research and contact applicants. I like that applicants can post multiple resources to their profile and I can easily access them (there’s no need for me to save their resume on my computer).” —Sarah, Director of Lower School Literacy, Grades 3-4 in the US.

Our methodology for selecting the best recruitment software

Transparency about features and pricing is important when sourcing an ATS. In the spirit of full disclosure, we thought we’d finish with a quick explainer about how we rate applicant tracking software.

Our rankings are based on extensive research and testing. Here’s what we consider when selecting the best ATS systems in the market:

• Core recruiting features for SMBs—Elite tracking systems must include core features small businesses need. Job posting to many platforms, CRM databases, interview scheduling, candidate scoring, and career site development are essentials.
• Simplifying the recruiting process—A great ATS makes life easier by removing clutter and streamlining hiring. We look for workflow automation, plenty of integrations, and mobile apps.
• Ease of use—If we can’t understand how to use an ATS, we relegate it to the also-rans. Interfaces must be easy to use and fully functional. Users need a clear dashboard and talent pipeline customizations. We’d expect intuitive access controls as well.
• Customer support—We know that users may need access to reliable support during setup and beyond. Good vendors offer phone, email, and even in-person help. They provide clear tutorials on critical subjects and respond quickly to every query.
• Price—We consider quality more important than value, but price matters. We assess free trials, differences between subscription tiers, and transparency. There should also be ways to scale implementations without any nasty financial surprises.
• Customer reviews—Active users are best placed to grade ATS performance. We look for consistently high ratings on reputable sites, along with trending complaints or strong points.

Try Toggl Hire as your ATS

Phew! We’ve covered a lot of ground and hopefully highlighted a few additions to your ATS shortlist.

Every business has different needs, but we’d love Toggl Hire to be part of the mix. Our free account offers a fully featured taste of our full-cycle recruiting platform, and users love what they find.

Take it from Riotly Social, which skyrocketed candidate numbers 10x once it switched to Toggl Hire. The social media agency identified 37 highly qualified potential hires in just three weeks.

Ready to achieve similar results? Create a free Toggl Hire account and give our ATS a try today.

Over 50 years old (and perhaps more relevant than ever), the job characteristics model (or JCM for short) promises to motivate employees, boost their satisfaction at work, and improve performance, all in one simple and easy-to-implement framework.

Why is it more relevant than ever? We’re in a crisis of workplace engagement, and millennials, who make up the majority of the current workforce, are leading it. A mere 29% of workers in this demographic report being emotionally or behaviourally invested in their jobs.

When employee engagement tanks, so do retention and morale. How can the JCM help? We’re about to show you.

TL;DR — Key Takeaways

• The JCM is a classic framework for evaluating a job’s potential to keep employees motivated and fulfilled over long periods of time. It can be a great way to build a specific job description.

• It focuses on five traits — skill variety, task significance and identity, autonomy, and feedback — which are said to give rise to certain psychological states that lead to performance outcomes.

• Various methods, such as the job diagnostic survey or the motivating potential score, can help you gather quantitative and qualitative data on an employee’s engagement in a role.

• Keeping JCM in mind when designing jobs or identifying skills gaps can be incredibly useful for motivating and re-engaging employees.

What is the job characteristics model?

The more experience you have in a job, the more skilled and efficient you become, right?

In the 1970s, organizational psychologists J. Richard Hackman and Greg R. Oldham assumed this, too. However, while studying factory workers, they discovered that rather than becoming more productive over time, experienced employees actually lost interest and got bored. As a result, their performance dropped.

Were all employees doomed to cycles of spikes and lulls as their perception of work goes from novelty to monotony?

To answer this question, Hackman and Oldham scrambled to find a way to keep employees engaged with their work over the long term. Finding their answer in the job characteristics model.

The core premise of Hackman and Oldham’s framework states that the nature of one’s job significantly impacts one’s motivation, satisfaction, and overall quality of life.

They argued that by balancing five key traits, you could keep employees happy and productive over longer stretches of time. The five traits of meaningful, satisfying work are skill variety, task identity, task significance, autonomy, and feedback. Each trait is something for employers to add to the mix as a solution to dwindling effort.

Benefits of using Hackman and Oldham’s job characteristics

One of the main reasons HR leaders use the JCM is because it provides management teams with a template for designing rewarding jobs for all industries, skills, and seniority levels. More than a trusted framework, it’s a blueprint for creating more engaging and fulfilling work environments.

1. Creating job design strategies

The JCM provides a systematic approach to job design, encouraging the incorporation of diverse skills, clear responsibilities, and impact into roles. This leads to well-defined roles that are also enriching for employees, fostering a deeper sense of purpose and belonging within the organization.

2. Improved job satisfaction and engagement

In theory, matching job characteristics with employee preferences will boost job satisfaction. When employees are more aligned with their roles on a personal level, this leads to better integration and internal motivation.

Ever since Hackman and Oldman’s original study, there have been multiple subsequent studies showing a strong correlation between job characteristics and satisfaction. Focusing on autonomy and feedback also empowers employees, helping them feel more valued and resulting in higher engagement levels.

3. Better task delegation and autonomy

Autonomy not only liberates employees to put effort into new ideas—it may be intrinsic to our brain’s motivation system.

In 1985, psychologists Richard Ryan and Edward Deci developed their self-determination theory, asserting that one’s autonomous motivation for personal and psychological growth is the bedrock of personal success and satisfaction. If employees get more autonomy, the theory goes, they’ll feel more satisfied and connected to their work, as any positive results will likely be seen as the result of their own inherent abilities.

The JCM emphasizes a clearer understanding of activities and expected results, which enables management to delegate more effectively. With autonomy as a core characteristic, employees are entrusted with responsibilities, leading to a culture of trust and accountability.

4. Enhanced performance and productivity

Like an algorithm, people get better with feedback. Communicating areas of strength and areas of improvement helps your workforce perform better and become more productive over time, like a fine-tuned algorithm that gets better with every iteration.

The JCM puts a strong focus on feedback, which contributes to higher performance levels. Employees who see the impact of their work also become more motivated to maintain high standards. Planning regular feedback sessions keeps individual goals and growth aligned with employer goals, enhancing overall productivity.

5. Reduced turnover and absenteeism

The JCM model also predicts reduced turnover and absenteeism. When employees find their work meaningful and are satisfied with their roles, they are less likely to seek employment elsewhere. They’re also more likely to give their job their all and show up as their best selves every day. This stability is crucial for maintaining a skilled and experienced workforce.

5 core job characteristics

The five job characteristics themselves are listed in no particular order — all carrying equal importance. They lean on each other to create the framework, complete with psychological states and overall results, which can be alluded to in job descriptions.

1. Skill variety

The degree to which a job requires a variety of skills to complete the necessary activities associated with the position. For example, a business development manager may require less skill variety (they create outreach lists and speak with prospects all day) than, say, a revenue officer. This role will require a much higher variety of skills, juggling growth projections, reviewing sales projects, approving budgets, and overseeing the activity of different departments and teams.

2. Task identity

Do the tasks have a clear beginning and end? Is there a point where you can tell you’ve moved from one task to another, or do they all bleed together? Roles with multiple moving parts, a clear start and end, and a visible outcome are considered to have high levels of task identity. Some roles that come to mind are project manager, architect, and marketing manager.

3. Task significance

This trait has to do with the degree to which a job has a meaningful impact on the lives or work of others. The broader the reach of your actions and decisions, the higher the significance of the task. For example, a restaurant owner’s task significance is much higher than that of a line cook because their decisions affect everything from the inventory, menu, and pricing to the clientele, decor, and marketing of the establishment.

4. Autonomy

To what extent does the employee have the freedom to decide how and when to do their work? Are they being micromanaged or empowered to take their ideas seriously? Injecting autonomy into your organization’s values provides the company with a culture of ownership and responsibility. The more independence and discretion in decision-making, the more productive and successful employees are in their roles.

5. Feedback

Feedback is a measure of validation, effectiveness, and impact. This can either be internal, like a hotel maid seeing the impact of her turndown service after completing it, or external, like an IT security team who can only understand their recent build is rock-solid after penetration testing. Either way, employees need direct and clear information about their effectiveness in their positions to feel satisfied.

A real example of a job characteristics model

Now, let’s put these (admittedly) abstract concepts into practice. Think of a backend developer.

Skill variety: High

Backend developers work with many different programming languages, databases, and frameworks. They also use a range of tools for designing, developing, and maintaining the backend of web applications. Sometimes, they may need to collaborate with other stakeholders, such as frontend developers or designers.

Task identity: Varies based on the project

This one can vary for backend developers depending on the project and team structure. In some cases, backend developers may work on specific components of a larger system, which means they get to see the impact of their work on the overall outcome. If they change management, they might be working on smaller, isolated tasks without a clear view of how their work contributes to the final product.

Task significance: High

Backend developers play a key role in making sure technologies and web applications are fully functional, performing well, and staying secure from cyber threats. Their engineering work may not always be visible to end-users, but it directly impacts their experience.

Autonomy: High

Backend developers usually enjoy high autonomy in their roles. They can choose what they deem to be the most suitable technologies, tools, and approaches for solving problems. That autonomy bleeds into their work schedules, especially in agile or flexible work environments, where they can usually arrange their week as they wish, within reason.

Feedback: Medium

Backend developers get direct (but sometimes unclear) feedback from the code they work with. Something might malfunction, indicating a problem, but the source of the problem is not always obvious. They may also receive feedback from code reviews and user reports. However, the quality and frequency of feedback can depend on company culture and the nature of the product they’re building.

How to measure job characteristics

Understanding how the model works is half the game. Now comes learning how to measure it. There are a few different ways to do this, each with its own benefits and limitations. The best measurement technique will depend on your organizational needs, team size, and type of roles.

Objective vs. perceptual measurement techniques

Let’s begin with the basics. Objective and perceptual measurements are the two primary approaches to measuring job characteristics.

• Objective measurements involve quantifiable data, such as the number of different tasks performed or the frequency of feedback provided.

• Perceptual measurements, on the other hand, rely on employees’ perceptions and evaluations of their job characteristics.

Both are valuable as they show two sides of the same coin. Objective measurements provide quantitative data, while perceptual measures paint a qualitative picture of an employee’s inner world and how they’re currently experiencing their work life.

Job diagnostic survey

Hackman and Oldham developed a job diagnostic survey to complement their JCM. It was purpose-built to measure the core dimensions of the JCM.

Following the same idea as the perceptual measurement technique, this survey assesses employees’ perceptions of their jobs. It depends on them self-reporting their experience, which makes it valuable to an organization by helping identify ways to improve employees’ motivation and satisfaction.

Job characteristics inventory

The job characteristics inventory (JCI) is a framework developed soon after the JCM that also aims to measure employee’s perceptions of their jobs. The JCI comprises 30 items grouped into six subscales corresponding to the JCM’s core characteristics. This inventory allows for a detailed analysis of a job’s variety, autonomy, feedback, interaction with others, and more.

This tool can help organizations identify specific areas for job design improvement by providing granularity on which specific characteristics are underrepresented in an employee’s experience.

Critical psychological states

Job characteristics are abstract proxies for the real thing we’re after—employees’ psychological states. The JCM outlines five key job characteristics and says they feed into creating three critical psychological states: experienced meaningfulness of the work, experienced responsibility for outcomes, and knowledge of the actual results of the work activities.

• Experienced Meaningfulness of the Work is the presence of skill variety, task identity, and task significance in a job. When employees perceive their work as varied, whole, and significant, they are more likely to find it meaningful.

• Experienced Responsibility for Outcomes emerges from the autonomy characteristic. When employees have control over their work and its results, they feel a greater sense of responsibility for the results.

• Knowledge of the Actual Results of the Work Activities is facilitated by feedback. Direct and clear feedback allows employees to understand the effectiveness of their efforts, closing the loop between action and awareness of results.

Mapping characteristics to employee’s psychological and emotional states is invaluable for organizations. It allows you to “translate” what an employee reports into actionable steps for your human resources team.

It’s unlikely an employee will tell you, “I need higher skill variety,” but they might well say they feel bored and think their work lacks meaning. A clear signal that an increase in skill variety might be in order.

Motivating Potential Score (MPS)

The Motivating Potential Score (MPS) is a numerical value assigned to a job based on how it scores across the five JCM traits.

It can be calculated like so:

MPS = [(Skill Variety + Task Identity + Task Significance) / 3] x Autonomy x Feedback

The higher the MPs, the more likely a job is to foster intrinsic motivation among employees, leading to higher job success and satisfaction.

It is interesting to note that while all elements of the JCM play a role in shaping employee motivation, Autonomy and Feedback are assigned a multiplicative effect on a role’s overall motivating potential.

How to apply the job characteristics model

So we know what the JCM is and how to measure it—now it’s time to apply it. Below, we’ve gathered some top tips for successful implementation and future improvement.

Understand your team’s current job design

The first port of call is to analyze your current team’s job roles and responsibilities to see how much they align with the five core job characteristics. The ultimate goal here is to ensure you know the current state of job design within your organization. This will provide a solid foundation for applying the model effectively in later steps.

Identify opportunities for improvement

Based on this initial analysis, pinpoint areas where job roles can better align with the JCM. For example:

• Increase skill variety by introducing different tasks.

• Enhance task significance by clarifying the impact of employees’ work on others.

• Boost autonomy by empowering employees to delegate decision-making.

Involve employees in the redesign process

Be transparent about what you’re doing and engage employees from the jump. Their insights and suggestions could prove invaluable and offer perspective on something you might’ve missed.

Involvement in job design not only empowers workers but also ensures that changes will be positively received and more closely aligned with their needs and preferences.

Implement incremental changes

Redesign jobs the same way you would eat an elephant…one bite at a time (although please don’t actually go eatin’ any elephants!).

Focus on no more than a handful of aspects at a time. This will allow you to monitor the impact of these new changes on employee motivation, satisfaction, and performance and make adjustments as necessary.

Incremental changes also help in managing the transition more smoothly, minimizing disruption to daily operations and helping you avoid overwhelm in what can be a long and intense process!

Enhance job design with Toggl Hire

Effectively implementing the JCM model requires having the right tools, and Toggl Hire is one of ’em.

Using our recruitment software, you can accurately assess candidates’ skills and fit for specific job characteristics from the outset. By incorporating skill tests tailored to the core job dimensions, you can hire with confidence, knowing that new hires are well-suited to positions designed for maximum motivation and satisfaction.

Furthermore, Toggl Hire’s data-driven insights and other full-cycle hiring features can aid in the ongoing evaluation and redesign of roles within your organization. By understanding your team’s skill sets and preferences, you can make informed decisions about how to enhance job characteristics, leading to improved employee engagement and success.

By leveraging the power of Toggl Hire alongside the JCM, organizations can create a dynamic and satisfying work environment that not only attracts but also retains top talent. Create a free account to see for yourself, or book a demo to learn more about how Toggl Hire can best be used to help you hire top talent!

Any money spent on your hiring process is an investment rather than a cost. But with so many tools promising to make better hires, it can be overwhelming to make the right choice.

TestGorilla is a popular pre-employment testing platform that simplifies the recruitment process through skills assessments. It has generally favorable reviews, but many users complain about their pricing plans.

So, today, we settle the question: how much does TestGorilla cost (and is it worth your money)?

TestGorilla pricing

TestGorilla has a free plan and two paid plans, depending on the features you need from this assessment platform.

The free plan

You can use TestGorilla completely free with five free tests and five custom questions. This level also opens access to qualifying questions for unlimited candidates. Additionally, you can post remote jobs on the TestGorilla job board.

This is just enough to test the waters. While it doesn’t allow you to test candidates’ skills extensively, it does give you a chance to check out the basic features of this assessment software.

The Starter plan starts at $83 per month

If you’re seriously considering the skills assessment platform, it’s really important to understand TestGorilla’s approach to pricing.

Instead of charging you per job opening, TestGorilla charges you based on company size. In other words, if one company has 10 employees and another has 100, the bigger one has to pay more for TestGorilla despite having the same number of job openings.

Second, committing to an annual TestGorilla plan saves you considerable money (and it’s the same with Toggl Hire.) So, the cheapest TestGorilla plan is $83 per month when paid annually and $111 per month when paid monthly. This is if your company has 15 employees. TestGorilla’s price increases based on larger headcounts.

For example, if you have 101+ employees, you’ll pay a minimum of $770 per month, even if you’re hiring for just one job role. In this plan, you get access to every core functionality, such as:

• 400+ tests in their test library
• Unlimited active assessments
• Unlimited candidate invitations
• Creating custom questions: multiple-choice, essay, and file-upload questions

In short, the more people in your company, the more you pay. Ironically, if TestGorilla works for you and you hire more team members, the tool becomes more expensive.

The Pro plan starts at $127 per month

Companies with up to 15 employees will pay $127 per month for TestGorilla’s Pro plan when paying annually. The monthly price is $169.

Let’s say you have 101-200 employees. This means TestGorilla now costs $1,100 per month annually, or $1,380 per month, paid monthly.

This plan provides extra features such as:

• API access and integrations with applicant tracking systems
• Custom tests and coding challenges from templates
• Custom branded assessments
• Video questions

In short, you get all the best features in the Pro plan, which can be cost-prohibitive, especially for startups and small businesses.

What do users think of TestGorilla pricing?

At the time of this writing, TestGorilla has 1,300+ reviews on G2. While some users mention problems with customer support, test difficulty, and other challenges, many comments focus on TestGorilla’s pricing.

One operations manager complains TestGorilla’s pricing is not suitable for small businesses:

“TestGorilla’s predefined test library may not cover niche skills, and creating custom tests can be challenging. The pricing could be high for small businesses, and integration with certain ATS platforms could be improved for a smoother experience.”

Another user makes a valid complaint that TestGorilla is overly expensive if your business only needs to hire occasionally:

“The price is quite expensive for companies wanting to use this on a very irregular basis.”

One founder said, “The cost per month is high for non-HR companies,” which essentially means TestGorilla caters to companies with strong internal HR teams and recruitment agencies.

In fact, another user said that for just a bit more money, they could have replaced TestGorilla with an actual HR company: “The pricing of the software was more on the higher side with what features we really needed to assist our work at a much faster rate, which cost us a bit higher than outsourcing the service from an HR firm.”

How does TestGorilla pricing compare to competitors?

Tool	Plan Names	Prices (USD)	Details
TestGorilla	• Free • Starter • Pro	• $0/month • $83/month (billed annually) • $127/month (billed annually)	• 5 free tests and 5 custom questions; invite unlimited candidates • Access to all 400+ tests; unlimited active assessments; invite unlimited candidates • Includes all Starter features plus ATS integration, custom tests, and more
Toggl Hire	• Free • Starter • Premium	• $0/month • $199/month (billed annually) $349/month (billed annually)	• 1 active job opening; 1 active skills test (access to most tests and templates); access candidate data for 30 days • 3 active job openings; unlimited skills tests; unlimited candidates • Unlimited job openings, unlimited skills tests, unlimited candidates
Testlify	• Starter • Basic • Business	• $49/month (billed annually) • $149/month (billed annually) • $299/month (billed annually)	• 300 candidate credits per year; 3 users; unlimited assessments • 1,000 candidate credits per year; 5 users; unlimited assessments • 2,500 candidate credits per year; 10 users; unlimited assessments
Xobin	Contact for pricing	N/A	Pricing details are not publicly available
Equip	Pay-as-you-go	$1/candidate	No minimums; pay only for the candidates you assess; no recurring subscriptions
iMocha	• Basic • Enterprise	• $400/month (billed annually) • Contact for pricing	• 600 candidate assessments per year; assess various skills; basic proctoring; standard ATS integration • Unlimited candidate assessments, advanced features, custom integrations
Vervoe	• Free Trial • Pay & Go • Growth	• $0/month • $19/month (billed annually) $250/month (billed annually)	• 1 assessment credit; 5 candidate credits; unlimited team seats • 1 assessment credit; 100 candidate credits; additional credits available for purchase • 10 assessment credits; 1,000 candidate credits; advanced features

TestGorilla may appear cheaper or more expensive than your favorite tool, depending on the number of job openings you have, the size of your team, your desired integrations, and more.

We strongly suggest determining your needs first, trying out each tool’s free plan (if applicable), and comparing the paid plans against your requirements.

How does Toggl Hire compare to TestGorilla?

Let’s pit TestGorilla and Toggl Hire head to head with some fast facts.

TestGorilla charges based on company size, Toggl Hire charges for openings

Take a look at our pricing page, and you’ll see that Toggl charges per open job role. So, if you’re hiring for two roles at a time, you’ll pay $199 monthly for Toggl Hire.

On the other hand, if you have two openings and want to streamline hiring with TestGorilla, it will cost you $132 per month if you have 16-30 employees. If you have 201-300 employees, you’ll pay $1,238 monthly.

Toggl Hire anti-cheating measures are less invasive

When you invite candidates for a skills test, some might consider cheating, but Toggl Hire prevents that in real-time.

We provide randomized tests that give different candidates different question sets to test their essential skills. We also detect copy-and-paste, so you know the answers are the product of the candidate’s mind.

TestGorilla is much more invasive. This platform uses IP-based location tracking, randomized screenshots, full-screen tracking, and mouse-in-window detection. These may help you spot cheaters but significantly damage your candidate experience.

Toggl Hire is a full-cycle hiring tool, while TestGorilla is assessment-based

With TestGorilla, you can find the best candidates by testing for specific skills. After that, you need to connect the test results to the rest of your hiring workflow by integrating with an ATS or a similar tool. By doing so, you’ll pay extra, as ATS integrations are only available in the Pro plan.

With Toggl Hire, you can build fully customizable candidate pipelines with different stages and filters. Drag and drop candidates across the funnel, from sourcing to testing, making an offer, and onboarding in one platform.

Toggl Hire offers AI question evaluation

Ease of use is the name of the game here. For example, if you’re building a custom test on product management and don’t know anything about it, you can use our AI assistant.

With artificial intelligence, you’ll get an evaluation of the question to find out how relevant it is for the job role. This feature is not present in TestGorilla.

Toggl Hire tests are fully customizable

In TestGorilla, you can get five custom questions per assessment in the Free and Starter plan. With Toggl Hire, you can change the test from start to finish and add as many custom questions as needed to find the best person for the job.

Asynchronous video interviews come in our Starter plan

While neither tool offers video interviews for free, you can get them in the Starter plan with Toggl Hire ($199/month), while you must purchase the Pro plan in TestGorilla to get this feature.

Toggl Hire integrates with Toggl Track

Toggl Hire lets you click back and forth to connect with Toggl Track from one single dashboard. This makes your hiring time tracking more efficient, and you can easily track recruiter time.

Toggl Hire offers instant scores and candidate feedback

Improve the candidate experience by sending them their test results immediately after completion. When a candidate completes a test in Toggl Hire, they get a breakdown of their score in their email inbox, fostering transparency and making the candidate experience stellar.

Try Toggl Hire for free

To compare Toggl Hire with TestGorilla, you have to consider your hiring needs and the size of your company. For organizations with a constant stream of job openings, TestGorilla may be the better, more affordable choice. For everyone else, Toggl Hire offers better value for money.

But you don’t even have to look at the pricing details first. Simply try our free plan to see why our customers and candidates love Toggl Hire (or book a demo to get a personalized walkthrough of our software to learn how it can adapt to your hiring needs).

Skills-based hiring is at an all-time high, with 81% of executives looking towards skills-based hiring practices to fill critical roles. While that’s great news for candidates and recruiters, only 17% of organizations know where to start. 

Pre-employment assessment tools are the missing link. However, a good tool should offer a variety of tests to really help you get the most out of skills-first recruitment — like soft skills, personality tests, and technical assessments.

The best option is a one-stop solution for your entire hiring process (which is what Toggl Hire offers). But if you’re curious about other options, this guide explores 11 free pre-employment assessment tools in detail.

TL;DR — Key Takeaways

• Pre-employment assessments, like skills assessments or personality tests, provide hiring managers with invaluable insight into potential candidates.

• The market is flooded with options, from targeted testing of technical skills to more general tests, making it difficult for hiring teams to know which pre-employment tool is right for them.

• Pre-employment assessment tools can be divided into different categories, from skills-based and technical assessments to psychometric and personality tests to testing that relies heavily on specific technologies like video and AI.

• For technical assessments, check out Coderbyte, Lytmus, and Toggl Hire, which are unique platforms for finding candidates with the best software programming skills tests.

• Criteria, HighMatch, and Wisnio are great tools for understanding qualified candidates’ personality traits and cognitive abilities with psychometric tests.

• For an all-in-one platform that combines full-cycle recruiting with skills assessments, consider Toggl Hire. With automated assessments and all the other typical ATS features you need, you can focus on finding the best person for every role, every time.

What is a pre-employment assessment tool?

A pre-employment assessment tool is software that helps companies screen and assess potential candidates by testing their skills and cultural fit for the job.

These tools are increasingly more popular than traditional hiring software or methods, allowing you to quickly narrow down the best candidates, get a comprehensive view of each one’s ability to add value to the role, and evaluate measurable results.

There are several types of pre-employment assessments, too, meaning you can slot them into pretty much any hiring process for any role. They usually cover areas such as:

• Personality and situational judgment tests: To see how individuals’ personal traits enable them to handle challenging situations in the workplace
• Job knowledge tests: To make sure a candidate has the competencies required for the role to forecast their potential job performance
• Integrity tests: To identify any counterproductive behavior
• Cognitive ability tests: To measure a candidate’s intellectual capabilities
• Skills tests: To assess soft skills like communication and interpersonal skills or more practical skills — like coding, problem-solving, performance marketing, or customer service

Thoughtfully selected pre-employment assessment tools are invaluable resources for hiring departments and HR, allowing them to evaluate candidate skillsets, behaviors, and abilities efficiently.

Types of pre-employment testing tools

Types of pre-employment tests	What they are	Scientific validity	Pre-employment testing software
Skills-based hiring platform	Focuses on a candidate’s job-related skills rather than their academic credentials or resume	High! Most skills-based hiring platforms use a combination of real-world scenarios and validated tests to give you a holistic view of a person (learn more about the science behind Toggl Hire skills tests here).	Toggl Hire
Technical assessments	Focuses on a candidate’s technical skills related to job-specific tasks	High! Great if you’re using real-world technical challenges.	CoderByte, Codility, DevSkiller, TestDome, Adaface, Toggl Hire
Psychometric tests	Assesses personality traits and cognitive abilities and is designed to measure a candidate’s behavior, cognition, skills, and motivations	Medium-high. They are best paired with other tests, but shouldn’t be the only factor when making hiring decisions.	Alva Labs, Psycruit, Criteria, HighMatch, TalentSorter, TestInvite, Wisnio
Personality tests	Helps employers assess how well a candidate’s personal ethic, work style, values, and attitudes match the job and company culture.	Medium. They can be pretty biased, and don’t always predict job performance, so use them in combination with other testing methods.	Prevue HR, Hogan Assessments
Testing for soft skills	Measures skills like adaptability, problem-solving, critical thinking, communication, teamwork, and leadership.	Medium. These are often subjective but can be good indicators of fit if you’re hiring for a role that requires a lot of interpersonal skills.	Softfactors, Owiwi, Pymetrics, eSkill
Video assessment tools	Allows employers to better understand a candidate’s personality, communication skills, and overall fit for a role.	Medium-high. They can give you a good idea of a candidate’s demeanor but also may intimidate candidates not used to this form of screening.	HireVue, Toggl Hire, Harver

Check out these 11 pre-employment assessment tools

As great as pre-employment assessment tools are, only two software options give you a 100% free experience: Toggl Hire and TestGorilla. Between the two, Toggl Hire delivers more value for money, as it’s a full-cycle hiring software and skills testing software all rolled into one.

Let’s take a closer look at the two of them and some other options if you have a bit of a budget to spend.

1. Toggl Hire

Toggl Hire goes beyond resumes and uses short skills challenges as the initial filter. You can build your fully custom candidate pipeline to put a skills test at the start (or wherever else you want, although we recommend it at the start).

Choose from 200+ pre-made skills assessments, designed by experts in the field (e.g., if you use an SEO specialist test, it was built by and reviewed by an SEO specialist with experience in the role and knowledge of the most important skills to test for).

Customize it to your liking however you want, set a time limit and other parameters, and then let candidates take the test. The system then automatically ranks candidates according to their answers, providing a short list of the best performers based on their actual job-related skills and knowledge, not their resume keywords. 

This skills-based screening approach helps companies attract more candidates, evaluate everyone automatically, and find high-quality candidates faster (about 86% faster on average).

Toggl Hire supports multiple types of assessments, including technical, soft skills, language proficiency, fundamental math, and 100% custom tests!

Standout features

• Option to automate initial candidate screening with a pass threshold
• Kanban-style candidate pipeline with easy drag-and-drop setup
• Test questions are created by real-world experts and validated via an extensive peer-review process
• Multiple test types, including skills tests, pre-recorded video tests, and take-home assignments

Pricing

• Free: One active job opening and one skills test
• Starter: $199/month for three active job openings and unlimited skills tests and candidates
• Premium: $349/month for unlimited job openings, skills tests, and candidates

Here’s how one management consultant describes Toggl Hire:

“I like how easy it is to navigate and generate tests. Additionally, the ability to easily shortlist candidates and provide instant feedback is amazing. Their pricing is simple and has no hidden fees. The best part is that you are not capped at how many candidates you can receive. No extra cost per cluster of candidates. My previous platform made it difficult to customize tests and I needed to pay for add-ons all the time. I’m happy that I switched over to Toggl Hire.”

2. TestGorilla

With over 400 different tests, TestGorilla is one of the only free pre-employment assessment tools. It offers various types of tests, from multiple-choice questions to essays and file uploads.

Standout features

• Provides AI-recommended tests based on job role or job description
• Has a massive test library covering everything from cognitive ability to software skills to personality and culture
• Handles thousands of applicants and gives you a ranked shortlist in minutes

Drawbacks

• Some users report poor customer service
• There is no candidate pipeline, so you can only test candidates but not manage the entire hiring process without purchasing another software and integrating it with TestGorilla’s platform
• Free plan only provides access to limited tests and custom questions

Pricing

• Free forever: Includes five free tests and five custom questions
• Starter: $83/month for access to all 400+ tests, unlimited active assessments, and the ability to invite unlimited candidates
• Pro: $127/month for all features of the Starter plan plus an ATS integration

3. Harver

If you need volume hiring, Harver is a good assessment platform to consider. Its suite of automated solutions combines data-driven matching, automation, candidate experience, and business intelligence.

Standout features

• Has 900+ pre-built job profiles, so you can evaluate candidates for all open roles, not just the one they applied for
• Guarantees that assessments are scientifically validated and bias-free
• Has a variety of talent assessments, like traditional behavioral, gamified behavioral, cognitive, and more

Drawbacks

• Interface can be confusing and outdated
• Limited integrations

Pricing

• Pricing is only available on request, with third-party sources stating it starts at $5,000/year

4. iMocha

iMocha will help you build a skills-based organization, align workforce skills with business needs, and make data-driven talent decisions. With AI-powered insights and an extensive library, you can easily find top talent.

Standout features

• Boasts the world’s largest skill library with assessment tests ranging from coding skills to language skills to next-gen skills
• Has skills matching and benchmarking to align your candidate skills with job requirements and industry standards
• Utilizes a skills inventory to support better talent decisions

Drawbacks

• Customer service may be slow
• Costly compared to other options

Pricing

• Basic: $400/month for five recruiters and 600 candidate assessments/interviews per year
• Enterprise: Unlimited recruiters and candidate assessment/interviews for custom pricing

5. Coderbyte

With Coderbyte, you can customize assessment templates for jobs in engineering, data science, or financial analysis. The platform’s variety of assessment formats helps you evaluate candidates quickly, affordably, and accurately.

Standout features

• Offers take-home projects to gain valuable insights into candidates as the final step of your interview process
• Has personality tests like DISC, Big 5, and 16 Types
• Automatically grades challenges and questions

Drawbacks

• Users report not being able to withdraw or cancel invites
• Doesn’t have fantastic customization options

Pricing

• $199/month for unlimited candidates, assessments, and admins
• Offers add-ons for additional price

6. Codility

Codility enables companies to evaluate developers’ specific skills through coding tests and other hard skills assessments. With evidence-based online assessments, recruiters can make informed hiring decisions and accurately predict a candidate’s performance in real-life scenarios.

Standout features

• Allows you to conduct consistent and structured technical interviews to ensure fairness
• Hosts campus recruitment events so you can identify early-career candidates
• Offers asynchronous role-specific skills assessments

Drawbacks

• Lacks more advanced machine learning assessments
• Some users report dissatisfaction with some of the types of tests for programmers

Pricing

• Starter: $1,200/year for 120 invites and one platform user
• Scale: $500/month for 25 invites and three platform users
• Custom: Tailored pricing is available from the vendor on request

7. Adaface

Adaface is candidate-friendly skills assessment software companies use to automate the first round of candidate interviews. It offers various online testing options, including aptitude tests and personality assessments.

Standout features

• Has 500+ ready-to-use tests
• Seamlessly integrates with your current ATS workflow
• Offers screening tools for programming, cognitive, business, typing, personality, and language tests
• Offers a free trial

Drawbacks

• Extremely costly compared to other options
• Web proctoring can make candidates uncomfortable

Pricing

• Individual: $180/year, 12 credits
• Starter: $500/year, 50 credits
• Pro: $900/year, 100 credits
• Scale: $3000/year, 500 credits
• Growth: $5500/year, 1000 credits
• Enterprise: $20,000/year, 5000 credits
• Unlimited: $50,000/year

8. TestDome

TestDome helps you avoid bad technical hires by allowing you to assess a candidate’s ability based on a real-life situation they might come up against. TestDome’s customizable assessments, real-time coding environments, and anti-cheating measures guarantee accurate results.

Standout features

• Offers 130 skills and 1,300+ premium questions
• Allows custom questions so you can tailor assessments and questionnaires to specific job requirements
• Provides detailed reporting and skill breakdowns for in-depth analysis

Drawbacks

• Doesn’t cater to all niche or specialized roles
• The cost-per-candidate pricing model may be a barrier for smaller companies

Pricing

• Starter: $20 per candidate for five candidates
• Small: $16 per candidate for 25 candidates
• Medium: $10 per candidate for 100 candidates
• Large: $8 per candidate for 300 candidates
• Extra Large: $7 per candidate for 600 candidates

9. Psycruit

By combining psychology, data science, and machine learning, Psycruit helps organizations objectively identify top performers. A team of business psychologists crafts all of their reports. 

Standout features

• Has a flexible assortment of online assessments like personality questionnaires and ability tests
• Uses gamified elements to make tests more modern and enjoyable
• Allows for candidate matching with tailored scoring algorithms

Drawbacks

• Gamified elements aren’t always suited for all job skills or roles
• Lacks a free trial

Pricing

• Pricing is available from the vendor on request

10. Prevue

Prevue is an ATS designed for small to medium-sized companies, offering integrated employee profiling and job board connectivity. Its pre-employment assessments and custom reports help recruiters make objective hiring decisions, reduce turnover, and create better team fits.

Standout features

• Has custom benchmarks tailored for each role
• Provides a job suitability score so you have a quantifiable measure of a candidate’s fit
• Offers motivation assessments to figure out if candidates’ interests align with the job role

Drawbacks

• The setup isn’t very user-friendly for some users
• Pre-employment assessments only include testing for aptitude, motivation, and personality, making them less role-specific and technical than other options like Toggl Hire or TestGorilla
• Lacks a free trial

Pricing

• Pricing is available from the vendor on request

11. eSkill

eSkill comes with a comprehensive suite of pre-employment assessments and simulations. The platform is a good fit for medium to large-sized companies, as it integrates with applicant tracking systems and ensures compliance with regulations during employment testing.

Standout features

• Has over 800 job and subject-based tests
• Comes with behavioral assessments so you can evaluate soft skills and cultural fit
• Offers very advanced simulations 

Drawbacks

• Some users say it’s possible for applicants to “cheat”
• The interface isn’t very intuitive

Pricing

• Pricing is available from the vendor on request

Other good pre-employment assessment tools

If the tools above don’t fit your requirements (or maybe your budget), a few other options can support your talent acquisition efforts:

• DevSkiller: A great platform for companies looking to perform technical assessments to hire developers. Pricing starts at $3,600.
• Traitify: A mobile-first and visual-based platform for assessments. Pricing is available from the vendor on request.
• Owiwi: Has psychometric tests that measure skills through an immersive game. Pricing starts at $18 per assessment.
• HireMojo: An AI-powered tool that automates administrative work so hiring managers can focus on interviews and extending offers. Pricing is available from the vendor on request.
• Mercer Mettl: An all-in-one assessment platform with a library of 200+ talent assessments and questions. Pricing is available from the vendor on request.

How to choose the right pre-employment testing tool

As a hiring manager or recruiter, choosing the right pre-employment assessment tool pre-hire can be a daunting task. With so many tools available for different roles and industries, it’s important to consider various factors to ensure you pick the right one:

• Range of testing options: Look for a tool that offers a wide range of tests — like skills tests, homework assignments, and asynchronous video interviews — so you can evaluate hard and soft skills.
• Skill or role-specific tests: Make sure the tool provides tests tailored to specific roles, such as developer-specific assessments, to accurately measure candidate fit.
• Helpful add-on features: Pick a tool with full-cycle hiring features (psst…like Toggl Hire), which offers assessment tools and candidate tracking, interview scheduling, and collaboration tools — the whole shebang.
• Relevant pricing model: Pick a pricing model that suits different budgets and needs, such as pay-per-candidate for low hiring frequency or monthly subscriptions for regular recruitment. Paying per user rarely makes sense for most hiring teams.
• Timing: Decide whether to screen candidates before or after the initial interviews and pick your tool accordingly.

Test candidates confidently with Toggl Hire

If you’re looking for an affordable, comprehensive skills testing tool, check out Toggl Hire. Not only is it the best free option, but it’s also a full ATS. While the average monthly price of ATS and skills testing software is $460, Toggl Hire is significantly more affordable. Our cheapest monthly plan starts at $199 (and, as we said, we even offer a free plan).

Our skills tests are also rooted in real-world expertise and a strong scientific framework. Say goodbye to hiring bias and choose from science-backed tests created by industry experts. Try Toggl Hire for free today and gain immediate access to 200+ assessments!

Diverse teams bring different perspectives to the table and perform better overall. That’s not just our opinion; it’s a fact.

Companies in the top quartile of ethnic representation have a 39% increased likelihood of outperformance versus the bottom quartile. McKinsey research also reveals that leadership diversity leads to better community, workforce, and environmental scores.

So, if the numbers don’t lie, why aren’t more companies investing in diversity, equity, and inclusion (DEI)?

Part of the reason is a glaring lack of the right tools and strategies to plan and execute a truly fair hiring process. But we’re here to help you out, with these 13 diversity recruiting tool recommendations. 

Overview of the best diversity recruiting tools

• Manatal: Best for AI-powered, bias-free hiring
• DiversityJobs: Best for access to large databases or networks
• Mogul: Best for objective resume ranking
• SeekOut: Best for finding and engaging diverse candidates
• Toggl Hire: Best for skills-based hiring
• Vervoe: Best for collaborative hiring
• Canditech: Best for real-world evaluations
• HireVue: Best for offering video interviews and technical evaluations
• Interviewing.io: Best for conducting anonymous, technical interviews
• Textio: Best for refining job ads to eliminate biased language
• Eightfold: Best for using AI to match candidates to roles based on skills
• Kanarys: Best for providing diversity analytics and insights

DE&I tools go far beyond simple hiring software

Before we get started, we just wanted to clarify one thing: to build an inclusive team, you need hiring tools that go beyond traditional applicant tracking systems and simple hiring software. A great DE&I tool should be a specialized solution for a specific phase (or phases) of the hiring process.

Innovations in technology, like AI, are helping the industry advance even further in fair hiring. They’re helpful at mitigating bias in job postings or identifying areas of a company where they might be falling short in their DEI efforts.  

However, we don’t recommend relying on AI alone in any hiring process (especially not one designed to be entirely bias-free). Instead, the most effective approach combines AI-powered insights with thoughtful strategies that prioritize transparency, accountability, and human judgment at every step.

That’s why it’s important to consider not just the capabilities of the tools you choose, but also how they align with your hiring goals and budget. Finding solutions that offer clarity and flexibility in their pricing can help ensure you’re investing in a process that drives effective, inclusive hires without overextending your resources.

With that in mind, let’s take a closer look at how pricing plays a role in selecting the best DEI tools for building your dream team.

Diversity recruiting software price overview

Software	Cost
Manatal	14-day free trial; pricing starts from $15/user/month
DiversityJobs	From $295/month
Mogul	Free demo available; pricing starts from $250/month/seat
SeekOut	Pricing available upon request
Toggl Hire	From $0/month for unlimited users and 1 active job opening
Vervoe	Free plan for seven days; pricing starts from $300 for 10 candidates
Canditech	Free demo available; pricing starts from $150/month
Hirevue	Pricing available upon request
Interviewing.io	Free plan available; paid plan pricing available upon request
Gem	Pricing available upon request
Eightfold	Pricing available upon request
Kanarys	Pricing available upon request

DEI sourcing tools

One of the first steps to building an inclusive workforce is identifying and engaging a diverse pool of candidates. That way, you’re not only picking through the top talent but also ensuring your hiring process is fair and inclusive.

The most modern DEI sourcing tools (like the ones below) often use data analytics or AI algorithms to help recruiters remove biases from the process and focus on skill and potential alone. 

Manatal

Those new machine learning and AI advancements we were just talking about? Manatal uses them to promote bias-free hiring. With AI-powered recommendations that score qualified candidates based on your job requirements, Manatal scours a global talent pool for you.

Key features

• Enriches candidate profiles with data from 20+ social media and public platforms 
• Allows recruiters to customize their talent pipeline to include DEI considerations
• Creates a branded career page showcasing your company’s culture and values
• Gives you a customizable dashboard and reporting tools to track any DEI metrics and KPIs

Pricing

• Professional Plan: $15/user/month
• Enterprise Plan: $35/user/month
• Enterprise Plus Plan: $55/user/month
• Custom Plan: Pricing available upon request

DiversityJobs

Want a job board platform that highlights your company’s diversity initiatives and open positions? DiversityJobs does just that and offers targeted marketing so you can reach a broader and more diverse audience.

Key features

• Provides access to a 2 million resume database for direct outreach to job seekers
• Has a directory of over 15,500 organizations for effective engagement and tracking
• Gives you a DiversityJobs badge to show prospects you’re committed and proactive about your DEI efforts

Pricing

• Single Job Postings: $295
• Single Posting Packs: Starting at $840
• Recruiting Subscriptions: Request a demo for customized pricing and term options

Mogul

Mogul is an AI-powered, comprehensive candidate database that assists your talent acquisition and diversity sourcing efforts. With AI resume screening ranking, you can reduce unconscious bias and make sure each candidate receives a fair evaluation.

Key features

• Gives access to 700+ million global top candidates
• Includes a Chrome extension for LinkedIn Recruiter
• Comes with advanced AI search and filters to find the right candidates
• Hosts live virtual educational programming

Pricing

• Individual: $250/month for one seat
• Enterprise: Custom per month for 1-10+ seats

SeekOut

SeekOut comes with plenty of tools to help you build diverse pipelines and discover talent insights. You can source candidates via specific filters — including underrepresented talent.  

Key features

• Searches from the best-fit warm recent inbound prospects
• Includes filters for specific requirements like medical licenses, security clearances, or technical expertise
• Integrates external data with your HR insights to understand your skills gap and work to optimize your diversity recruiting efforts

Pricing

Pricing is available on request for four different packages.

DEI screening and interviewing tools

DEI screening tools give all candidates a fair chance without letting personal information, like demographics or ethnicity, unconsciously sway your hiring decision. They standardize the interview and evaluation process so your assessments are consistent and truly objective. 

Toggl Hire

Toggl Hire is a user-friendly, full-cycle hiring platform that helps ​​modern recruiters efficiently build their ideal diverse workforce. While it’s a full ATS, Toggl Hire’s skills-first features (namely the expert-created skills assessments) help remove biases and personal factors from the process, getting down to what matters: a candidate’s skills and potential.

Key features

• Promotes fair hiring by focusing on candidates’ abilities rather than biases with skills-based assessments
• Aligns company diversity hiring objectives with customizable templates
• Offers anonymous assessments for truly objective evaluations
• Encourages feedback with email and message templates

Pricing

• Free: $0/month
• Starter: $199/month
• Premium: $349/month

Vervoe

Vervoe uses AI to focus on merit-based hiring. The platform evaluates candidates based on their skills and competencies for an objective assessment process. This way, you can spot top diverse talent from all backgrounds and reduce any biases in your hiring.

Key features:

• Comes with anti-cheating measures to make sure the assessment process is fair
• Has team tools for collaborative hiring so multiple stakeholders can review candidates and give feedback
• Allows you to pick from 300+ customizable assessment templates to evaluate a different range of skills

Pricing

• Pay As You Go: Starting from $300 for 10 candidates
• Custom: Pricing is available on request

Canditech

Make sure you evaluate candidates based on their skills rather than any personal characteristics. With Canditech, you can use standardized and objective scoring, as well as real-world job simulations, to ensure you’re hiring candidates who best fit your team culture.

Key features

• Offers blind hiring by omitting personal information like gender, age, race, and education, from assessment results
• Gives realistic job scenarios so you can evaluate candidates’ skills holistically
• Customizes assessments to make sure they’re relevant and fair

Pricing

• Team: $150/month
• Pro: $200/month
• Enterprise: Pricing is available on request

HireVue

HireVue supports your DEI efforts by focusing on candidates’ potential and skills rather than just their traditional qualifications. This allows you to identify raw talent that might otherwise be overlooked.

Key features

• Gives candidates video interviews so they can showcase their skills and personality
• Offers technical evaluations for roles that require specific skills
• Provides standardized questions and evaluation criteria to maintain equity and consistency during the recruitment process

Pricing

Pricing is available on request.

Interviewing.io

If you want to improve the interviewing portion of your hiring process, Interviewing.io can help you do so objectively and bias-free. With anonymous interviews, the evaluation is truly fair, leading you to select the best candidate without being influenced by personal information.

Key features

• Gives you a better assessment of candidates 
• Conducts mock interviews with experienced engineers from top companies

Pricing

Pricing is available on request.

Other diversity recruiting tools

Inclusivity matters at every stage. Other types of diversity recruiting tools can help you fine-tune your hiring process by automating administrative work or refining your copy or employer branding. 

Textio

Textio keeps your hiring materials free from bias from the start. It also helps you craft AI-powered job posts that appeal to a diverse range of candidates, ensuring all job seekers — even those from underrepresented groups — feel encouraged to apply.

Key features

• Has a gender meter that helps you correct any gender-skewed language from your hiring materials — like job titles, job descriptions, or job postings
• Grades every piece of content you create to predict what kind of audience your copy will appeal to
• Uses AI to create inclusive, data-driven first drafts

Pricing

Pricing is available on request.

Gem

Gem is an AI-first, all-in-one recruiting platform that identifies and engages a more diverse candidate pool. It achieves this through its powerful AI-powered sourcing and outreach capabilities, giving you a wide range of job seekers.  

Key features

• Finds your warmest leads by unearthing and re-engaging with candidates from previous applications
• Uses a predictive algorithm to understand how your top-of-funnel efforts manifest in pipeline diversity
• Has diversity metrics you can measure by recruiter, department, or location

Pricing

Pricing is available on request.

Eightfold

Eightfold is another tool that uses AI to help hiring teams improve their DEI recruiting strategies, making it easy to focus on skills and potential rather than a laundry list of achievements on a resume. The AI-native recruiting suite streamlines your hiring workflow, reducing your screening time and allowing you to focus more on high-quality candidates.

Key features

• Uses Copilot to automate recruitment routine tasks
• Emphasizes a skills-based approach to enhance diversity and speed in hiring

Pricing

Pricing is available on request.

Kanarys

Kanarys builds your inclusive workplace with scientifically validated assessments and data-driven, real-time insights. The platform has a strong focus on helping companies create culturally diverse and satisfied workforces. 

Key features

• Delivers tailored recommendations to improve your culture and DEI practices
• Protects user sensitivity and confidentiality while assessing the most important concepts related to inclusion
• Audits your organizational practices to identify room for improvement

Pricing

Pricing is available on request.

Trends in diversity recruiting software for 2025

In 2025, diversity recruiting software will improve and diversify the hiring landscape. Advanced AI will detect and mitigate bias, while skills-based hiring will break down traditional barriers to entry.

Plus, talent teams are demanding better integrations between ATS and HRIS. All of these trends will make it easier for hiring teams to build more inclusive and equitable workplaces. 

AI impact on DEI software and hiring processes

When used properly, AI algorithms can reduce bias in the recruitment process. While AI systems aren’t human and don’t come with their own opinions and judgments, humans build them. This means if an algorithm is trained on biased data, the algorithm will be biased, too

But, as long as AI systems are built with these risks in mind (and trained on the correct data) they can significantly improve DEI initiatives and remove bias from recruiting. As mentioned at the start, AI can also identify areas where companies aren’t using inclusive language, or provide data-driven insights revealing how their DEI initiatives are going. 

Rise of skills-based hiring

Nowadays, degrees and strict requirements matter less and less. Skills and competencies are proving to be better indicators of a candidate’s success, which also makes job positions more accessible to a wider range of job seekers. 

Employers that engage in skills-based hiring reap some pretty great benefits. Non-degree candidates hired into roles with companies that dropped degree requirements have a 10-percentage point higher two-year retention rate versus their college-educated coworkers.

Increased demand for better ATS/HRIS integrations

Hiring managers and HR professionals want a more seamless experience, which is why so many talent teams are looking for better ATS/HRIS integrations.

And, we totally get that. Better integrations not only make life easier but also lead to a more cohesive and positive candidate experience, from the initial application to onboarding.

Try Toggl Hire for more inclusive hiring

With plenty of recruiting solutions on the market, it’s important to choose from those that promote fair and inclusive hiring practices. That means different things for different use cases.

Instead of choosing a niche tool with one “DEI” function, opt for an all-in-one recruitment solution that puts skills at the forefront of the recruitment process.

Choose Toggl Hire to focus on ability and skill — not degrees or accreditation. Create a free account today, and see how simple it is to improve your DEI hiring efforts.  

With the rise of big data, machine learning, and AI, projects are becoming increasingly complex. And that’s more than just a headache. Added complexity creates risk, increasing the chances of cost overruns, missed milestones, and reduced profitability.

Mastering cost management is the best way to avoid these problems by streamlining your project’s forecasting, cost tracking, and financial reporting. However, managing finances can become labor-intensive, so it’s best to use project cost management software to do the heavy lifting.

Follow along as we run through the top 8 project cost management software tools on the market, focusing on time-saving budgeting features such as automation, customizable workflows, and real-time analytics that’ll help you keep your projects in the green.

Overview of the best project cost management software

• Toggl Track: Accurate time tracking, budget reporting, and profitability with a beautiful UI
• Timeular: People resource management plus time tracking, reporting, and budget setting
• Timely: AI-powered time tracking and budget control that eliminates manual input
• Harvest: For freelancers or small teams that deliver time-based projects
• Hubstaff: Cost management plus workforce management, payroll, and invoicing
• Asana: Strong project management capabilities, including planning, budgeting, and reporting
• Productive: End-to-end agency management, including sales, projects, budgets, and resourcing
• Scoro: Full-service project management with a strong focus on margins and profitability

1. Toggl Track

Price: Free for 5 users, then from $9 per user, per month

Toggl Track is a time tracking, reporting, and profitability solution that enables teams to monitor project budgets, track actual costs, and analyze profitability with detailed reports. It also integrates with its sister app, Toggl Plan, to become an all-in-one tool for project progress, resource management, and cost control.

The software is available on web, mobile, and desktop apps. It seamlessly tracks billable and non-billable hours and integrates with popular tools such as Jira, QuickBooks, and Xero!

Top features

• Project time estimates: This starter plan feature allows you to set hourly time and cost estimates for projects and tasks and track their progress. 
• Labor costs: Add and monitor labor costs for each employee to calculate profitability. 
• Fixed fee projects: Add fixed fee rates to projects, get notified when you exceed your fixed amounts, and get alerts when the project exceeds the budget. 
• Profitability insights: See data trends, analyze and compare project and employee profitability with visual and easy-to-understand charts and graphs. 
• Project dashboard: Track crucial project metrics like labor and contractor costs and get project billing amount forecasts.

✅ What we like	❓What’s missing
Toggl Track combines project planning, time tracking, and profitability reporting into a simple and clean UI that makes it easy to estimate, forecast, and create project budgets.	You can’t collect payments in Toggl Track, so you’ll need to push system-generated invoices into an invoicing tool to get money in the bank.

Pricing

Plan	Cost	Best for
Free	$0	Solo users who need a time tracker with an intuitive interface
Starter	$9 per user/mo	Small teams who want timesheets & cost tracking
Premium	$18 per user/mo	Larger teams who take financial management seriously
Enterprise	Custom pricing	Unlimited users and custom solutions (book a demo to learn more!)

Visit the pricing page for more information.

Why I’d choose Toggl Track as a project manager

I’d choose Toggl Track if I needed to track financial performance with a clean and simple UI. It’d be especially good for mid-size professional services companies who track their time, bill by the hour, and want to optimize their costs to stay profitable.

2. Timeular

Price: From $5.60 per user, per month

Timeular is an automatic time tracking tool perfect for time-based project teams. With features for setting accurate project estimates, project planning, resource allocation, and cost control, it’s the one-stop shop for projects involving timesheets and billable hours.

Top features

• Billable time tracking: Timeular automatically tracks billable and non-billable hours on its desktop and mobile apps. 
• Project budget estimates and alerts: Set up budget estimates for each project and client, and get Timeular to send automatic warnings for cost overruns. 
• Customized billable reports: Customize your billable time reports and export them in XLS, CSV, or PDF format. 
• Cost monitoring: Monitor time spent on different projects to allocate costs and project budgets efficiently. 

✅ What we like	❓What’s missing
Timeular’s Budget feature lets you easily create time budgets to monitor project and client profitability. You can also set budget overrun alerts to avoid going over budget.	Timeular doesn’t have labor costs or project profitability reporting features, and you have to upgrade if you need to manage more than one budget.

Pricing

Plan	Cost	Best for
Personal	$5.60 per user/mo	Unlimited time tracking and one specific project budget
Personal Pro	$8.80 per user/mo	Billable rates, reporting, and unlimited project budgets
Team	$15.80 per user/mo	Dedicated support for teams of up to 20
Enterprise	Custom	Advanced technical support and integrations

Why I’d choose Timeular as a project manager

I’d choose Timeular if I needed to maximize my people resources through time tracking, reporting, and budget setting.

3. Timely

Price: From $9 per user, per month

Timely enables you to swap Excel spreadsheets and manual data entry for AI-powered time tracking features that create project budgets, track budget burn, and visualize budget reporting data in a clean real-time dashboard. 

Top features

• Automatic time tracking: Timely’s AI-powered Memory tracker records all your billable and non-billable activity automatically — no manual entry needed.
• Project budget: Create time and cash budgets in Timely for every project, or set up recurring weekly or monthly budgets.
• Detailed reporting: See time and cost reports like unbilled hours and monthly project reports to analyze costs and profitability. 
• Project dashboard: At a glance, check out your logged hours, total budget, how much you’ve spent, and how much budget is left for each project. 

✅ What we like	❓What’s missing
Timely’s AI-powered automatic time tracking eliminates the need for manual input, automatically converting time records into budget management lines.	Timely doesn’t have the functionality to collect payments or manage detailed resource planning.

Pricing

Plan	Cost	Best for
Starter	$9 per user/mo	Automatic time tracking, project dashboards, and billable hour reports
Premium	$16 per user/mo	Unlimited projects, 50 users, and advanced budget tracking
Unlimited	$22 per user/mo	Unlimited users, capacity management, and overtime
Enterprise	Contact Timely for more pricing	Tailored onboarding and training

Why I’d choose Timely as a project manager

If I had a slightly larger budget and wanted to reduce admin for my team members, I’d choose Timely to take the effort out of expense tracking.

4. Harvest

Price: Free for one seat, but paid plans start at $11 per user, per month

Harvest is a complete time, expense, payment, and invoice management tool. Its budget monitoring and cost tracking features enable project teams to manage their costs effectively, as well as linking it all into well-known accounting software such as Xero and Quickbooks.

Top features

• Expense tracking: Track project and client expenses, add receipts and notes, and put them on client invoices. 
• Budget monitoring: Set up project billable or fixed fee rates, monitor budget progress, and get notified when you exceed budgets.
• Cost reports: Harvest generates detailed expense reports with in-depth information about each expense, cost, and budget line.
• Project progress dashboard: See your project’s progress with key metrics such as total hours, remaining budget, internal costs, and uninvoiced amounts. 

✅ What we like	❓What’s missing
Harvest lets you create budgets for your projects, easily track progress, and stay informed with detailed analysis on the Projects Analysis dashboard.	Harvest doesn’t offer great task management functionality, including missing project management workflows such as Gantt charts or Kanban boards.

Pricing

Plan	Cost	Best for
Free	$0	1 seat, 2 projects, and basic reporting
Pro	$11 per user/mo	Unlimited projects, time tracking, reporting, and invoicing
Premium	$14 per user/mo	Profitability, timesheets, and SSO

Why I’d choose Harvest as a project manager

If I worked with freelancers or as part of a small team that delivered end-to-end time-based projects, I’d choose Harvest.

5. Hubstaff

Price: From $4.99 per user, per month

Hubstaff is an employee monitoring and workforce management app with cost management features for setting and tracking client budgets. Real-time cost tracking helps team members and stakeholders monitor project profitability, avoid cost overruns, and plan future budgets. 

Top features

• Expense tracking: Track and invoice expenses, upload receipts, and categorize expenses. 
• Project-level budgets: Available on the Grow pricing plan and up, set budgets for each project and monitor cash flow in real-time to keep projects on track.
• Automatic alerts: Set budget limits and receive automatic notifications when project expenditures or hours worked approach your limits. 
• Payroll and payments: For those managing freelancers or in-house teams, combine payroll for fast and efficient payments.

✅ What we like	❓What’s missing
Hubstaff’s project and client budget reports provide insights on cost estimates, actual costs, cashflow, profitability, and approvals all in one place.	Like Harvest, Hubstaff is limited as a project management tool, as it doesn’t include advanced features such as timelines or task dependencies.

Pricing

Plan	Cost	Best for
Starter	$4.99 per user/mo	Time tracking, activities, and limited payments
Grow	$7.50 per user/mo	Get started with project budgets, expenses, and reports
Team	$10 per user/mo	Add in insights, task management, and payroll
Enterprise	Starts at $25 per user/mo	Enhanced security and compliance for corporates

Why I’d choose Hubstaff as a project manager

If I were responsible for broader workforce management, payroll, and invoicing, I’d choose Hubstaff to track project costs from start to finish.

6. Asana

Price: Free for personal use, then from $10 per user, per month

Asana is one of the world’s most powerful and most used project management tools, giving you everything you need to run a successful project. Create projects, break them into tasks, and then estimate and track all of your costs across the entire project lifecycle.

Top features

• Project Hub: Connect all of your company projects together in the user-friendly project hub, with a choice of Gantt, list, calendar, board, or timeline views.
• Budget Management: Set time or cost-based budgets, tracking estimates and actuals as the project progresses.
• Customizable Workflows: Configure customer updates to keep project resources, tasks, budgets, and objectives up to date.
• Detailed Reporting: Insight reports aid decision-making, company planning, and project monitoring, as well as feed into organizational planning capabilities.

✅ What we like	❓What’s missing
Asana’s core project management capabilities make it easy to control your entire work management engine, with tailored solutions for Ops, IT, and Product-based projects.	Asana isn’t a time tracking software, so its functionality to track time is manual and can only be managed in the app itself. But don’t worry, there are some handy integrations with tools like Toggl Track to help you out.

Pricing

Plan	Cost	Best for
Personal	Free	Up to 10 users can get started with tasks, projects, and integration-led time tracking
Starter	$10.99 per user/mo	Add timelines, Gantt charts, and project dashboards
Advanced	$24.99 per user/mo	The full package includes native time tracking, automation, and Asana AI

Why I’d choose Asana as a project manager

If I wanted a strong project management tool that also included cost management, real-time data reporting, and good customization, I’d choose Asana.

7. Productive

Price: From $9 per user, per month

If you work in an agency, Productive is the management system that brings projects, budgets, and resources together in one place. Combine Gantt, boards, or calendar views with Productive’s in-depth budget analysis, plus bolt on a sales CRM for winning new business, and you have everything you need to manage the end-to-end agency journey.

Top features

• Resource Management: Productive has a strong focus on resourcing, helping you analyze your team’s efficiency by skill, team, department, or client.
• Phased Budget Management: Set budgets by specific project phases to help you stay on track throughout the project lifecycle.
• Sales CRM: If you’re client-focused, the sales CRM helps you win new business as well as deliver great project outcomes.
• Predict Project Performance: AI-driven Scenario Builder helps you forecast project outcomes, costs, and profitability to enhance your project estimates.

✅ What we like	❓What’s missing
Productive’s focus is on agency-side projects, blending task management, resource management, and financials to deliver a complete software solution.	It has a limited number of integrations compared with project cost management competitors.

Pricing

Plan	Cost	Best for
Essential	$9 per user/mo	Budgeting, project management, time tracking, and reporting
Professional	$24 per user/mo	Larger agencies can add invoicing, recurring budgets, and rate cards.
Ultimate	$32 per user/mo	Scale your agency with revenue forecasting, advanced time tracking, and integration technologies

Why I’d choose Productive as a project manager

If I worked as a project manager in an agency, I’d choose Productive because it’s tailored to suit the end-to-end agency workflow.

8. Scoro

Price: From $26 per user, per month

Scoro’s all-in-one management platform combines project management, quoting, budgeting, time tracking, and so much more. Its detailed financial analysis helps you set project budgets and margins based on past performance, and project templates enable teams to get up and running with their delivery in just a few clicks.

Top features

• Automatic Project Plans: Pre-defined project templates make it easy to turn quotes into full project plans with just a few clicks.
• Project Management: Tonnes of flexibility to deliver projects your way, with shareable Gantt charts, Kanban boards, task lists, and calendars.
• Profitability: Analyze past projects to automatically predict budgets, cost types, margins, and profitability of future projects.
• Financial Management: Add on quotes, invoices, and accounting integrations to turn Scoro into a complete money-making machine.

✅ What we like	❓What’s missing
Strong focus on past project analysis to help you plan profitable projects for the future. Plus, lots of flexibility in task, resource, and project management delivery.	Time tracking is basic compared to other tools, with manual timesheets and basic start/stop timers.

Pricing

Plan	Cost	Best for
Essential	$26 per user/mo	Get projects, calendars, quotes, and dashboards
Standard	$37 per user/mo	Upgrade to get Gantt charts, project templates, and detailed financial reports
Pro	$63 per user/mo	Detailed project budgets, retainers, labor costs, and sales pipelines

Why I’d choose Scoro as a project manager

If I worked in a consultancy, agency, or professional services company that prioritized margins, I’d use Scoro to manage my profitability (if I could afford it)!

How to choose the right project cost management tools for your needs

With so many project cost management tools on the market, it can be difficult to know which one to choose to manage your budgets. When making your decision, here are some of the things to think about:

• Project management functionality: You’re not going to have a standalone tool for managing project costs, so make sure it also doubles as a good project management delivery tool, too. Prioritize tools that your team can actually use to manage project progress (e.g., task management and Gantt charts) to ensure your cost data stays up-to-date.
• Your project use case: Internal business projects look a lot different than client-side agency projects, so find a tool that matches your use case. If you try putting a square peg in a round hole, your team won’t use your new tool, meaning the cost data will quickly become out of date.
• Customization: No two projects are ever the same, so why would your cost management tool be any different? Projects need flexibility, so prioritize tools that can adapt to your workflows, delivery framework, and the needs of different clients. This includes features like custom fields, billing rates, and reporting views.
• Your team’s size: If you’re running lots of projects, you need a tool that can scale up with you and your team. Look for tools that match your team size and have powerful reporting and analytics functions to give you the insights you need to oversee profitability and margins as you grow.
• Your own budget: A cost management tool is a cost in itself, so it must align with your software budget. As we’ve seen from our top eight tools, there’s real variability in price point, so look for tools that align with your budget needs.

Manage project budgets better with Toggl Track

Managing project finances can be a time-intensive activity, but good project cost management software will help you save time, improve accuracy, and drive better project results.

The good news is that there are loads of great tools for managing project costs, but I recommend focusing on those that match your project delivery style, offer customization, and align with your budget.

Like any software tool, the best way to find out if it’s right for you is to take it for a test drive, either with a free trial or by reaching out to providers and booking a demo.

Why not sign up for a free Toggl Track account to test out our great project planning, budgeting, and reporting features? Better yet, if you’re a team of 20+, you can even schedule a demo with our team to get some 1-on-1 advice on how we can help you meet your project goals.

We get it — limited filters meant extra work. Previously, Toggl Track’s filters only provided a partial view of your data. To refine reports, you often had to export data, clean it manually, and apply formulas in spreadsheets — a tedious process that wasted time and risked missing key insights.

Now, with more than 11 filters and 8 condition options, Flexible Filters put you in control — right inside Toggl Track. No exports needed. Just the flexibility to instantly surface the insights you need.

Watch Senior Product Manager Enzo walk you through Flexible Filters:

Here are four practical ways to start using Flexible Filters:

1. Get the Data You Need – Faster

No more exporting and manual cleanup. Instead, apply precise filters directly in Toggl Track Analytics to surface insights.

With custom conditions and advanced logic, you can:

• Use advanced conditions like “is not,” “is empty,” “starts with,” or “contains”
• Apply AND/OR logic to customize how filters interact
• Filter and segment data by projects, clients, project tags, fixed-fee projects, and more

The flexibility to use different conditions within each filter is huge. I can exclude projects that are fixed-bid vs. those that are hourly retainers.

User feedback on Flexible Filters

2. Quickly Audit Time Entries

Use the “is empty” filter to identify missing details in your billable time entries, filter time entries by duration or by different project type (e.g. fixed fee), ensuring all time entries are categorized correctly before payroll processing or invoicing. This is especially useful for people in Finance and Project Management roles when they need to:

• Find untagged or unbilled hours before processing payroll or generating invoices.
• Audit time entries to verify compliance with overtime police.
• Identify gaps in team time tracking and ensure proper time logging.

3. Analyze Specific Projects Without Extra Tags

If you manage multiple projects with similar names, you no longer need to add extra tags to group them. Instead, use filters like “Starts with” or “Contains” to analyze them together.

• Group multiple projects under a common client (e.g., “[CS] Client A” OR “[CS] Client B”).
• Group related tasks from different projects into one view.

In the past, I had to create a lot of extra tags just to group data properly in reports. The new filters save me so much time.

User feedback on Flexible Filters

4. Exclude Non-Billable Activities for Clearer Insights

Want to focus only on billable work? Use “Does not contain” or “is not” filters to remove internal meetings, admin tasks, or non-billable work from reports — giving you a clearer picture of team productivity and profitability. This way you can:

• Filter out non-billable tasks to ensure more accurate profitability analysis.
• Remove internal meetings and admin time to focus on client work insights.

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With Flexible Filters, Toggl Track’s Analytics is more powerful than ever — helping you focus on insights, not spreadsheets.

Just 34% of organizations consistently get their project estimates right. That means the majority — 2 out of 3 companies — regularly overspend on their projects and bust their budgets. Not good.

From experience, I can tell you that project estimating is pretty hard. Our job as project managers is to see into the future and predict how the project will play out. But we’re not using crystal balls here, so like most things in project management, it’s best to use tried-and-tested project cost estimation techniques.

This article explores all things cost estimation. We’ll look at why it’s so important, different techniques to use, and an eight-step estimating process to forecast your next project accurately.

What is cost estimation in project management (and why is it so important)?

Project cost estimation is the process of forecasting the quantity and cost of resources required to deliver a project’s work. Accurate cost estimation goes hand-in-hand with task and schedule estimating, combining everything together to prevent overruns, boost value, and increase the chances of project success.

Accurate project estimates are the foundation of project cost management. The estimates you create as part of the project planning phase are used to secure funding, build a viable business case, and set a baseline project budget.

But that’s just the early stages of a project. While estimates are a key part of getting your project off the ground, they’re also the benchmark you’ll use for the rest of the delivery. But if you rush your estimates and get them wrong, you leave yourself open to:

• Actual costs exceeding your budget, leading to overruns and needing to request more money
• Stakeholders losing trust and confidence in your project management abilities
• Delays to project timelines, deliverables, and key milestones
• Emerging risks you don’t have the budget to address

That’s the worst-case scenario. If, instead, you use a defined cost estimating process, you’re far more likely to have the time, budget, and contingency you need to manage whatever your project throws at you — that sounds much better, right?

Project cost estimation methods

There are many tried and tested estimating techniques, methods, and templates to help project managers master the cost estimating process.

Each of these top-down and bottom-up techniques has its pros and cons and will be more or less applicable to your industry or organization, so experiment with different techniques to find what works best for you.

Technique	Description
Analogous estimation	Looks at historical data to create a ballpark estimate
Top-down estimation	Looks at the overall scope and timeframe to create a high-level ballpark estimate
Parametric estimation	Combines data and variables to create a more accurate ballpark estimate
Three-point estimation	Combines the best-case scenario, the worst-case scenario, and the most likely scenario to get a realistic budget estimate
Bottom-up estimation	Breaks down the project into smaller tasks to create a more accurate estimate. Best for SoW estimates

Analogous estimates

Analogous estimating involves looking at like-for-like projects you’ve completed to create an estimate for a new project. You can think of analogous estimating as the “cookie cutter” technique if your new project is the same as an old one.

Let’s look at two examples:

• Five-page website. If you’ve delivered a five-page website before for $10,000, you can rinse and repeat the same $10,000 estimate as long as the scope of work is similar.
• Construction costs. If a cost estimate for a previous 2,000-brick home was $100,000, you could reasonably assume a new 2,000-brick home built the following month would also cost around $100,000.

The issue with analogous estimates is that two projects are never quite the same, so they should only be used: 

• As a high-level, top-down estimating technique
• If you have accurate cost data from a previous project
• If there are no significant differences between the old project and your current project
• If there have been no major external changes (e.g., high economic inflation)

That said, analogous estimates offer a quick and easy way to get a ballpark top-down estimate using historical data.

Parametric estimates

Parametric estimates use data from similar projects and combine them with known project variables to create an estimate for a new project. You can think of parametric estimates as the “cookie cutter plus” technique, where you apply some extra math to a standard analogous estimate. Here’s how:

• Using the previous five-page, $10,000 website example, let’s say a new client wants a 10-page website instead. A parametric estimate does the math to create a like-for-like estimate for the new, larger project. The 10-page website will probably be double the work of a five-page website, so the cost estimate would also be doubled to $20,000.

But, there are some downsides to a parametric estimate, including:

• It doesn’t account for economies of scale for certain types of costs (such as raw materials), which are crucial for construction projects.
• It assumes larger and smaller projects all have the same level of risk and complexity.

Again, like with analogous estimates, a parametric estimate is another top-down technique that’s great for fast, high-level estimates.

Analytical estimates

An analytical estimate is a bottom-up estimating technique that breaks the project down into parts and uses internal and external data sources to estimate the cost of each. This is the most scientific and accurate approach, but takes a lot more time and effort to complete.

Here’s an example of an analytical estimate in action:

• Building 50 new computers. To understand the total equipment costs, you’d break the computer down into its component parts and use an external cost benchmark to estimate the cost of each. You’d then add the cost of each part together to get a total equipment cost.

Aside from being labor-intensive, analytical estimates:

• Require large data sets to make them accurate
• Require a work breakdown structure or product breakdown structure to be completed beforehand

Delphi estimates

A Delphi estimate is a bottom-up estimating technique that breaks a project down into its component parts and then uses the experience and knowledge of subject-matter experts to estimate through consensus.

Here’s a real-life example:

• Alongside the materials required to build 50 new computers, a project manager must estimate the labor costs to assemble the parts. To understand the work and costs, you could bring together five expert engineers and ask them to each estimate the time and costs required, then reach a consensus to form the final estimate.

But, when using a Delphi estimate, it’s important to be aware that:

• They’re subjective, using the opinion of experts rather than objective data
• They require a detailed breakdown of the project tasks and scope to make them accurate

Delphi estimates are great for bottom-up estimating, especially when forecasting resource management costs.

How and when to use each estimating technique?

When combining top-down and bottom-up estimating techniques, it’s important to use them at the right stage of the project lifecycle — here’s how to do it:

• When you’re developing an idea and need ballpark figures without a large time investment, top-down techniques are a quick and easy way to estimate an entire project.
• When you move into the planning phase and need a granular view of expenditures, bottom-up techniques provide the detail you need to create your first business case and set your baseline project budget.

How to estimate project costs in 8 steps

While every project, organization, and industry is different, the steps you’ll take to estimate are essentially the same. Next, we’ll walk through a high-level eight-step estimating process you can use as a blueprint for any type of project.

Remember: It’s best practice to use company-specific data sets, templates, and approval flows to tailor the process to your way of working, so take the below and tweak it as needed.

1. Refine the concept and project scope

Before you think about estimating costs, you must clearly understand the project concept and scope. After all, how can you create an accurate cost estimation for something you’re not sure of?

The best way to do this is to create a high-level scope of work or a more detailed business requirements document with your client, customer, or sponsor. Getting something written down focuses and aligns stakeholders, sets expectations, and provides an audit trail to review later on.

As the project manager, your job is to facilitate this conversation, helping clients understand what they really want by challenging their thinking and suggesting new ideas.

2. Gather data from past projects

Most estimating techniques use historical data from past projects to inform future cost estimates. Historical data provides valuable insight into:

• How cost estimates and baseline budgets compared to actual project costs
• Resource utilization and workloads
• Unforeseen risks and how they were managed
• Lessons learned — especially useful for projects that failed

For most organizations, you’ll find previous project data in project management software tools, file repositories, and project closure documents. Don’t be afraid to hunt around, as the more data you have, the more accurate and reliable your cost estimates will be.

3. Break down the project into phases and tasks 

Detailed bottom-up estimating techniques rely on breaking the project down into smaller, more manageable parts to improve estimating accuracy.

The best way? Create a work breakdown structure (WBS). Depending on your project, you may go for a deliverable-based WBS (best for product, engineering, and mechanical projects) or a phase-based WBS (best for software, transformation, or process improvement projects.

Either way, breaking your project down enables you to estimate the specific tasks, resources, and timelines of the project, which can then be quantified with a cost.

Feel free to use our WBS template, which contains fields to enter each task’s estimated hours and costs. Once filled out, this will create an estimated cost estimate for the entire project.

4. Calculate the cost for each task

Ready to put those estimating techniques to good use? With the work clearly defined, it’s time to work through and estimate your project. It’s important to get your cost allocation right, so consider all the different types of project costs that make up each task, including:

• Labor: The people who will work on the project tasks (applicable to all projects)
• Materials: The raw materials that you’ll use to make products (most applicable to manufacturing projects)
• Equipment: The equipment you’ll need to perform each task (most applicable to construction, manufacturing, or IT projects)
• Overheads: Any costs for premises, utilities, or software to support project activities (applicable to all projects)

Consider using various top-down and bottom-up techniques to ensure you consider every angle. Lean on the expertise of team members familiar with similar projects to sense-check the math.

As we mentioned at the beginning of this article, cost estimates will form the foundation of your entire project, so take your time and don’t rush to get to the right numbers.

Using Toggl Track, you can view past project task data within the Reports Dashboard to better understand what time and costs went into each task.

This is useful for quickly coming up with a budget estimate for a project when the client wants a little more detail.

5. Tackle optimism bias with a three-point estimate

Human beings are naturally optimistic people, and this is especially true when it comes to estimating projects. Most cost overruns come from a tendency to be naturally optimistic, so I’d recommend using a three-point estimate to tackle your optimism bias. Here’s how it works:

• Three-point estimating combines the best-case, worst-case, and most likely outcome to create an accurate, weighted estimate.
• When estimating any cost, use this formula to give a balanced estimate of the most likely outcome: Estimate = (Best Case + 4 x Most Likely + Worst Case) / 6
• Let’s jump back to our 2,000 bricks example from earlier. Let’s say the best price was estimated at $20,000, the worst price at $30,000, but the most likely was $22,000. Using a weighted 3-point estimate, you’d estimate $23,000 as your final 3-point estimate.

A three-point estimate is a classic project estimating technique that combats optimism bias and adds a little contingency to cover you for emergencies.

6. Add a project buffer to protect profits

Projects are uncertain places to operate, and things can go wrong at any time. To protect you, your estimates, and your project’s profits, add some contingency for unexpected risks and expenses.

As a general rule, there are two ways to add project contingency to your estimates:

• Line-by-line percentage: Once you’ve estimated each cost item, add a fixed percentage (e.g., 5%) to every cost
• Contingency cost: Add a one-off contingency cost to your total project estimate (e.g., $10,000)

7. Don’t forget hidden costs

Where most project managers go wrong is they format hidden costs that don’t necessarily fall out of a work breakdown structure. Some of the most common costs include:

• Regulatory or compliance fees, e.g., insurances, professional memberships, audits
• Training, e.g., upskilling/cross-skilling team members and end users
• Maintenance, e.g., maintaining equipment, software licenses
• Contractual, e.g., exit costs, signing fees, variable costs
• Marketing, e.g., communications, advertisement, social media
• Financial, e.g., loan fees, interest rates, repayment charges

This is where historical data and expert insights ensure you haven’t missed any significant expenses in your total project costs.

8. Calculate the total cost of the project

To finish, aggregate all of those individual tasks and costs together to determine the total project budget.

This includes your individual estimates, your contingencies, and any hidden costs to paint the full picture. As a final check, include both direct costs (e.g., labor, materials) and indirect costs (e.g., administrative expenses), as well as any variable costs that might change as your project expands (e.g., utilities, software licenses).

Once you’re happy you’ve considered all the costs, link them back to your work breakdown structure ready to share with your stakeholders. It will look something like this.👇

What most project managers get wrong with project cost estimating

When the pressure of a high-speed project is on, it’s easy to make silly mistakes in the project cost estimating process. Here are some of the most common pitfalls project managers make and how you can avoid them:

Bad math

Estimating is a numbers game, and when you rush it, you’re likely to get your numbers wrong. To avoid this, team up with a finance or audit department colleague to double-check your work or use proper estimating software to iron out mistakes.

Underestimating complexity

Projects are inherently complex, but many project managers make the mistake of trying to oversimplify things. Take this too far, and you’re at risk of underestimating, leaving yourself with a budget problem down the line. Use the 3-point technique to create a weighted estimate and avoid limiting your budget.

Forgetting buffer

All estimates are essentially educated guesses, so make sure you always include some room for error. When project managers forget buffers, they inevitably end up getting caught out when things don’t quite go to plan.

Use Toggl Track to track and control project costs

If you need some help creating, monitoring, and controlling project costs, Toggl Track is the best friend you didn’t know you had! With features for resource management, time tracking, and reporting and analytics, you can set a cost estimate and accurately track how your actual costs perform against budget.

Toggl Track’s intuitive interface makes the experience effortless, while helping you seamlessly incorporate cost estimates into your workflows. Bring all this together, and you’ll build stakeholder trust, enable informed decision-making, and improve your chance of project success.

Like the sound of that? Try Toggl Track for free and see for yourself how we make managing project costs a walk in the park.

Looking for your next time tracking app?

At first glance, Clockify and Toggl Track seem similar, but once you get to know them, you’ll realize they’re built for completely different types of users. While Clockify is great for agencies, freelancers, and companies that want control over their employees’ time, Toggl Track is perfect for mid-sized and large teams with trust at the heart of their operations. 

But it’s not as simple as that, and we’re only just getting warmed up. Choosing a time tracking tool requires careful consideration because there’s a heck of a lot of nuance involved. Luckily, we’ve tried both tools to tell you once and for all which is better: Clockify or Toggl Track?

In this detailed comparison, you’ll learn how Clockify and Toggl Track compare in terms of pricing, user experience, analytics and reports, employee privacy, and integrations. By the end of this guide, you’ll know which is the right fit for you. 

Comparison summary: Clockify vs. Toggl

The story behind Toggl Track

Alari Aho and Krister Haav created Toggl in 2006 to accurately bill their software agency’s clients. 17 years later, Toggl’s purpose has evolved beyond timekeeping. We’ve added three more products to the roster (Toggl Plan, Toggl Hire, and Toggl Work) and renamed the initial app Toggl Track. 

Toggl Track is built on a simple idea: time tracking should inspire self-reflection. It also gives companies the data they need to streamline their operations and become more productive. The result? Better time management, increased profitability, and more free time. 

Today, Toggl Track’s playful and intuitive design ensures time tracking becomes second nature. Users enjoy learning how they spend their time — it’s like peeling back the layers of their day to find surprising insights and hidden patterns. 

And then there are Toggl Track’s Reports and Analytics. Expansive and insightful, these features offer a way to slice and dice your time data, visualize it in many ways, and uncover productivity hiccups. 

This becomes the foundation for constructive conversations, mentorship, and support, all based on Toggl’s core values: trust, transparent communication, and respect for privacy.

Toggl Track is the ideal time tracking tool for companies that want to foster a culture of growth, performance, and trust while empowering decision-makers with tools to spot inefficiencies using Insights and Analytics.

The story behind Clockify

Nenad Milanovic and Lazar Vujanic founded CAKE, a suite of productivity tools, in 2009. It wasn’t until 2016 that they started working on their flagship product — Clockify. They realized the industry needed a “simple and affordable” time tracking app and that “more people should have access to useful yet free apps.”

Today, Clockify is a timekeeping, reporting, and project management platform that helps professionals and agencies quickly start their time tracking journey. Its project management tools are handy for those who primarily work on short and straightforward projects instead of long and complex ones. 

Meanwhile, its lightweight reports are designed to gauge billable hours, automatically calculate wages for a set period, and auto-generate client invoices with just one click. 

Now for something controversial — or not, depending on how you roll. Clockify’s surveillance features include a GPS Tracker, Automated Screenshots, and Force Timers that can’t be stopped or manually edited.

This feature set makes Clockify the perfect time tracking tool for companies that expect industrial efficiency from their workforce. But it also fosters distrust between employers and employees. In fact, 63% of people feel so strongly about the use of tracking software that they would consider it a reason to leave the company. 

Clockify vs. Toggl: User experience

Toggl Track’s toolset is easier to use, more customizable, and more functional than Clockify’s.

Toggl Track’s Manual Time Tracker is easier to use

On Toggl Track’s Desktop App, you can set up the Autotracker, which automatically starts timers based on the time of day or active windows. 

Also, the desktop app automatically logs time if you forget to start a timer (2). It lets you set reminders when you forget to start or stop timers. And finally, it also has an integrated Pomodoro Timer. Clockify doesn’t offer these key features.

Clockify only has a list view for visualizing time entries. Toggl Track lets you switch between the List View and a daily or weekly Timeline View.

Toggl Track allows you to start and stop the timer for each project, so no one wastes time switching to the Timers tab when working on tasks. Clockify forces you to switch to the Timer Menu before starting or stopping the task timer. 

Clockify only allows project-based time tracking

With Clockify, you must select an existing project or create a new one before saving a time entry. This means you can’t use it as a stopwatch for everyday tasks. If you do, your workspace will become littered with placeholder projects.

In comparison, Toggl Track saves time entries even if they aren’t associated with a project. And, if you need to associate an entry with a project someday later, you can. As a result, everyone from project teams, account teams, and HR teams can use Toggl Track as a time tracker. 

Toggl offers a better team management workflow

Clockify lets you invite new members to your projects using their email addresses and assign them to groups. You can also set different billable rates for each person on the project.

The Dashboard shows all team activities, helping you identify what each member is working on and for how long. It also provides filters to sort through the information to find specific metrics.

The Calendar and Scheduling features visualize team activity, showing which members are available or overbooked. This lets you re-distribute workload as needed.

Toggl Track offers similar Team Management features to Clockify. But unlike Clockify, Toggl Track lets you create multiple organizations under the same account, invite members to them, and set their permissions. This is useful if you manage multiple teams or departments with multiple managers.

It also lets you manage access for individual projects with six different user roles. 

With Toggl Track, you can disable members without removing them entirely. In contrast, with Clockify, you can only delete members. which feels a bit drastic. And if someone returns to the team or comes back from leave, you’ll need to send another invitation if you want to tag them back in. 

Toggl Track lets you set Reminders that notify employees when they forget to track their work or when they track less than a preset duration.

It also reminds users to turn off the Timer if it’s been active for too long. The Reminder feature is handy for managers who don’t want to keep reminding their team to track time.

Toggl Track lets you set the required fields for a time entry, which improves the quality of your time data and helps with accurate time billing.

You can also lock existing time entries and prevent new entries until a set date. Clockify offers a similar feature that makes the Project Field mandatory.

Toggl Track’s UI is more intuitive

Toggl Track’s UI has vibrant colors, intuitive controls, animations, and dynamic transitions — it feels warm, cozy, and inviting. 

In contrast, Clockify’s UI elements feel a bit corporate-like and dated. As a result, its blue-toned interface may feel cold and distant. 

Toggl has another nifty feature: keyboard shortcut tooltips as you hover over elements, which let you quickly streamline time logging. With Clockify, you have to Google the keyboard shortcuts.

Some users mention that the user interface can feel busy. Varun R., a full-stack developer, says, “The interface, while functional, can feel a bit cluttered when you’re juggling multiple projects or tasks. It sometimes takes some more time than expected for clicks to get to what you need.”

Toggl Track has another nifty feature: keyboard shortcut tooltips, which let you quickly streamline time logging as you hover over elements. With Clockify, you have to google the keyboard shortcuts.

Clockify vs. Toggl: Analytics and Reports

Clockify and Toggl Track provide daily, weekly, and lifetime Reports

When it comes to reports, Clockify and Toggl Track match each other in terms of functionality. Both provide reports about projects, tasks, and time entries. They also support a “Summary” report that shows the organization’s total tracked time that can be filtered by:

• Task
• Team
• Client
• Project
• Entry tags
• Billable time
• Description

This lets managers get a quick overview of employees’ work patterns, the total time tracked, and the estimated revenue for any set period.

Note that users like Erica L., a marketing consultant, would prefer Clockify to offer better reporting functionality. She said, “I think there are some restrictions on how flexible the reports that are created can be. More possibilities to filter and personalize the reports to my own requirements would be nice.”

Both platforms offer the “Detailed” report, which shows each team member’s time entries and allows you to edit them. Meanwhile, the “Weekly” report delivers a summary for each selected week.

Both platforms let you export reports as PDF, Excel, and CSV, but Toggl Track enables you to schedule periodic reports to be delivered to your email. This way, you or your stakeholders can stay updated on your projects without constantly logging into the platform.

Toggl Track has a dedicated data and profitability Insights dashboard

Clockify provides an analytics dashboard showing the total billable hours the project tracks. It uses pie charts and bar graphs that show the time distribution across projects and working days.

Toggl Track’s Insights dashboard provides a lot more helpful information. For example, the “Data trends” dashboard shows the total and daily average of work hours spent on each project:

This way, managers can compare the time allocation between multiple projects so they know where to add more resources or make trade-offs.

Toggl Track helps you assess the profitability of all your projects by plotting a timeline of your earnings and labor costs based on the team’s billable hours. It also shows the profit/loss margins for each project and client in your workspace:

But that’s not all. The Insights dashboard also tells you how much each employee costs and how much revenue they generate for your business, which lets you easily spot unprofitable projects or under-utilized employees:

Finally, Toggl Track lets you compare the hours logged between any two weeks. It draws a head-to-head graph that shows the hours for each day of the week.

This feature helps managers assess productivity over a given duration. It also shows which days of the week have the highest and lowest productivity across the organization, individual projects, or individual employees.

Toggl Track’s new Analytics feature lets you create customizable charts and dashboards

Toggl Track’s new Analytics feature provides a flexible and customizable method of visualizing time-tracking data. Besides billing clients and processing payroll, it also helps managers to:

• Improve project profitability and efficiency,
• Manage resource demand better,
• Boost your team’s efficiency.

That’s because, unlike Clockify, which has ready-made, rigid, and non-interactive reports, Toggl Track lets you customize charts and Analytics dashboards. This flexibility allows managers to analyze and visualize the data they need using charts they can easily understand.

Charts are your dashboards’ building blocks — you can add different types within a single view. Analytics helps you visualize time tracking data using:

• Tables
• Bar charts
• Donut charts
• Line graphs
• Pivot tables

Toggl Track also lets you build custom dashboards and choose the charts you want to display.

You can reorder the positions of the charts or resize or remove them at any time. Dashboards also have a built-in “Totals” widget summarizing all tracked time data.

Clockify vs. Toggl Track: Employee Privacy

Clockify offers GPS-based location tracking

With the Pro plan, Clockify tracks an employee’s location whenever the timer is started or stopped on the app. This time tracking solution also registers any significant location change while the timer is running, which is great for teams that want to set up a time kiosk.

Note: Clockify requires employee permission before it can track their location. This permission is typically granted once, immediately after the app installation. To disable location tracking, users must explicitly deny permission in their device settings. 

Employees can view and delete their location data, but not for other employees. Admins can delete all employee location data.

Clockify records screenshots of employees’ devices

Alongside Location Tracking, Clockify also offers screenshotting in the Pro plan. It takes screenshots when the timer is running and notifies all users when screenshotting is enabled.

To protect user privacy, screenshots are low resolution and blurred by default. Admins and employers can view them in full resolution.  

Not only does Clockify record the screen, but it also logs which apps and websites users visit while using the app. And if there are no keystrokes or mouse movements for a set duration, it’ll detect and log this inactivity, too. 

Toggl Track doesn’t offer location-tracking or screen monitoring

Toggl Track doesn’t offer any type of employee surveillance – zero location monitoring, screen or keystroke logging, or employee webcams. We don’t (and never will) tolerate snooping — there are soooo many more empowering ways to boost worker productivity and company profitability. 

Employee surveillance might generate a lot of data, but it also generates a lot of noise, which dilutes the data’s value. The bottom line: people will find ways around anything they don’t like doing.

Toggl Track is built on trust and a sense of ownership over work. This way, employees don’t feel like managers are breathing down their neck. After all, employee performance is evaluated by work output, not input.

Clockify vs Toggl: Integrations

Toggl Track provides integrations with 100+ apps and services

Toggl Track designs, builds, and maintains integrations with:

• Calendars
• Email services
• Accounting apps
• Project management tools
• Customer support services
• Web development tools

You can also use the Browser Extension or track time inside third-party apps. For example, enabling specific permissions embeds a timer in the interface for these apps. And, in case you also need project management, it integrates with Toggl Plan, which is built for precisely that purpose.

Where it doesn’t provide native integrations for your third-party app, you can use Zapier, Integrately, and other automation services to create workflows with over 3,000 apps. 

In addition, the Toggl Track API lets you build your own integrations with just a few lines of code and supports multiple programming languages, including:

• Python
• JavaScript
• Ruby
• Rust

Clockify lets you add custom functionality to the app

Clockify integrates with 29 productivity and project management apps, such as:

• Asana
• Trello
• Jira
• QuickBooks
• Outlook
• and ClickUp

It’s also available as a Chrome, Firefox, and Edge browser extension.

Besides native integrations, Clockify lets you add custom functionality to the app using its open-source API. These add-ons enable you to connect your own tools and display data in unique ways. 

You can also customize their UI and choose where they appear on the interface. But note that some users have issues with accurate time tracking when using integrations such as Jira.

Clockify vs Toggl: Pricing

Both tools offer free plans, but Toggl Track limits the number of users

Clockify provides a free lifetime plan with basic time tracking and project management functionalities. With this plan, you can track unlimited projects and invite unlimited members to your team.

Toggl Track also offers a free plan for up to five team members, including Tracking, Projects, and Clients, making it an excellent plan for individuals and freelancers. This plan unlocks all integrations and is available on all major platforms. 

Clockify’s subscription plans are cheaper than Toggl Track’s plans

Clockify’s paid plans start with the Basic plan, which lets you submit time entries for other users, bulk edit metrics, edit user profiles, set required fields, and more. It also provides templates for creating new projects. Freelancers who need team management tools and the time tracker will find the most value in this plan.

The Standard plan unlocks timesheeting and billing. The attendance and overtime, invoicing, time off, and task reminders make it an excellent fit for small teams. Meanwhile, if you want access to surveillance tools, you’ll have to choose the Pro plan that unlocks:

• GPS tracking
• Screenshots,
• Labor cost and profits
• Assignment reports
• Custom user fields
• Project forecasting

The Enterprise plan lets you control team members’ accounts, audit time logs, and create a custom subdomain.

Toggl’s plans are more expensive, but they provide more value

Toggl Track’s pricing plans start with the Starter plan, designed for small teams needing a hassle-free solution to work quickly. It lets you create tasks for your projects, favorite time entries, and billable rates. You also get pre-populated project templates and project time estimates.

The Premium plan provides powerful tools for managers to keep their teams agile and synchronized. In addition to the Starter tools, it lets you create fixed fee projects, audit time logs, schedule reports via email, send time tracking reminders, and more.

Toggl Track’s Enterprise plan lets you create tailored solutions for your large or complex organization. It allows you to create multiple workspaces in your organization. You also get priority support and expert team assistance.

Clockify vs Toggl: Pros and Cons

Final Verdict: Clockify vs. Toggl Track 

Toggl Track is best for teams, while Clockify is best for freelancers or managers who want to monitor their teams’ work.

Toggl Track’s tools are more refined, easier to use, and more mature than Clockify’s. The platform appeals to managers looking to get their employees to use time tracking software. That’s because it doesn’t offer employee surveillance and provides a powerful toolset, which makes it the best option for creative teams.

Clockify appeals to a specific audience: freelancers who need an affordable time tracker with some project management features or micromanaging employers committed to using creepy surveillance tools.

So, use Clockify if:

• You’re a freelancer who needs an affordable time tracking tool
• You’re an employer who wants to monitor employee location and screen activities
• You want an all-in-one time tracking and project management platform

Use Toggl Track if:

• You need powerful analytics to help you improve team productivity
• You value privacy and a trust-based work culture
• You need a hassle-free automatic time tracker

Click here to get started with Toggl Track!

85% of leaders lack confidence in their hiring decisions when they make them. Implementing an effective recruitment strategy can flip that stat on its head.

Bad hires cost companies thousands of dollars (and that’s without the invisible burden of frustrating rehiring timelines and a hit to team morale). The good news is this is avoidable. A good recruitment plan aligns with your company’s goals and effortlessly identifies candidates who will propel the company forward while thriving in their own right.

Our seven-step plan helps you build your own rockstar recruitment plan and reveals the five most common mistakes we’ve seen in our decade of experience. Make sure you read to the end!

TL;DR — Key Takeaways

• A good recruitment strategy is a vital investment. Done well, it lowers hiring costs, attracts top talent, closes skills gaps, and future-proofs your company.
• Your recruitment strategy will look different depending on your overall business objectives for the near future.
• After defining your goals, improve your hiring process by nailing the sourcing and selection parts. This will save you time and keep your hiring fair.
• Some common mistakes are eliminating the salary in the job description, focusing on the wrong goals, writing vague job descriptions, and using painfully long hiring processes.
• A plan is only as good as the tools that execute it. Lean on technology like Toggl Hire to help with the heavy lifting and build your recruitment strategy.

The importance of a recruitment strategy

Having a solid recruitment plan for each job opening — and a go-to hiring strategy for your company overall — will make your life soooo much easier. Not only does it standardize and streamline hiring, but it also aligns it with your company’s priorities and goals.

Nail your recruitment strategy, and you’ll also:

• Attract skilled talent: Becoming crystal clear on your objectives means your job descriptions get sharper and attract the exact candidates you need.
• Boost retention: If you do a better job of identifying and hiring the right people (thanks to your fool-proof strategy), the likelier they are to feel fulfilled and stick around.
• Lower recruiting costs: A systemized process = more efficient = cheaper to run.
• Improve employer branding: A slick, efficient, and organized recruitment plan is a good look and could go a long way to enhancing your reputation as a desirable employer.
• Close skills gaps: By analyzing your recruitment needs, you’ll identify the skills your organization needs but doesn’t yet have. Bake this into your recruitment plan, and you’ll stay ahead of the competition.
• Future-proof your team: A good recruitment strategy anticipates upcoming industry and recruiting trends, challenges, and technologies and builds them into the plan. Think of your hiring plan like a roadmap that looks 6-12 months into the future. Being proactive means you’ll have a steady pipeline of talent — the right kind of talent — which reduces the risk of skill shortages in the future (something 74% of companies struggle with in 2025).

While this is all fine and well, before actually creating your strategy, it’s important to note that there’s a difference between a recruitment strategy and a plan, though! 👇

	Recruitment Strategy	Recruitment Plan
Description	An overarching approach or method an organization uses to attract and hire new talent, focusing on long-term goals, types of roles to fill, ideal candidate profiles, channels for reaching these candidates, and employer branding.	A detailed, step-by-step roadmap for implementing the recruitment strategy. It outlines specific tasks, timelines, responsibilities, and resources required to execute the strategy.
Focus	Long-term goals, the ‘what’ and ‘why’ of the recruitment process.	Short-term objectives, the ‘how’ and ‘when’ of implementing the strategy.
Components	Employer branding, sourcing strategies, candidate profiles, diversity goals, etc.	Job posting schedules, resume screening criteria, interview timelines, assigned responsibilities, etc.
Purpose	To define the overall approach and objectives in attracting and hiring talent.	To detail the exact steps and resources required to implement the strategy.
Flexibility	More adaptable to changes in the market, industry, or company objectives.	Less flexible due to its task-oriented and time-bound nature.
Outcome	Establishes the direction and focus of the recruitment efforts.	Facilitates the successful execution of the recruitment strategy.

7 steps to build a recruitment plan

We’ve put together a broad brushstroke plan so you can build an effective recruitment plan from scratch. Each step comes with various sub-steps based on your hiring needs and goals.

For example, if you’re a tech company hiring a ton of developers, you might focus more attention on the sourcing and selection processes. If you’re a newer company that just closed a funding round and is doing a big hire for the first time, you might want to put extra time into thinking about your goals and needs.

Finally, accept that your first draft will suck. The important thing is to refine it over time based on what works and what doesn’t.

1. Define your hiring goals

If you don’t know the destination, how can you chart a course to reach it? Every successful plan is built on the scaffolding of relevant goals. You want to make sure your recruitment efforts align with company goals in a supportive way.

For example, if you plan to grow revenue by 5x over two years, your recruitment focus might be attracting and retaining top sales and marketing leaders. If you want to build and launch a new product, you might focus on reducing your time-to-hire to snag the best product manager out there — FAST.

Some other goals could be:

• Reducing cost-per-hire
• Automating more HR admin tasks
• Increasing qualified candidates per open position
• Boosting candidates from an internal referral program
• Reducing employee turnover
• Improving diversity hiring
• Building a strong talent pipeline

Whatever goals you land on, they’ll guide the recruitment plan you build. A strategy designed to retain talent will look different from one made to minimize time-to-fill.

2. Figure out your hiring needs

After determining your goals, figure out the skills your team needs, both now and in the future. The best way to do this is with a skills gap analysis.

This process anticipates future hiring needs and workforce requirements. It can also help you understand which departments need extra support and why. In a nutshell, you’ll need to:

• Identify required skills for the roles you’re hiring for: Consider critical, non-critical, hard, and soft skills for each position.
• Assess current skill levels: What skills are already present in the team, and to what degree?
• Analyze gaps: Compare the required skills with the current skill set. What’s missing? Is hiring new people or upskilling existing team members the best course of action? Considering emerging technologies, industry trends, or upcoming projects, do you anticipate any new gaps arising soon? Plan for those, too.
• Develop an action plan: How will you address the gaps you’ve identified? Targeted training programs, mentorship, or recruitment are all equally valid choices.

This exercise highlights where recruitment has the highest potential to make an impact. It’s best conducted with HR and team leaders — that way, everyone is on the same page and can align on resource allocation and strategic approach early on.

3. Set a sourcing strategy

Now you know what roles you’re hiring for and why. Next, hiring managers should design a multi-channel approach to sourcing potential candidates. This goes beyond copy-pasting the same job postings across five job boards and LinkedIn. Social media, employee referrals, niche industry forums, newsletters, and even specific job boards should ideally work together to pull in the right candidates.

Of course, your approach to candidate sourcing should still be strategic. You want to be where your ideal candidate is. For example, a healthcare organization looking to hire graduates for their NGO will likely attend university job fairs, advertise within student job boards, and post flyers around campus. A tech company might focus on remote job boards, LinkedIn, and employee referrals.

4. Refine your selection process

Picture this: Rather than sifting through thousands of resumes, you send all your candidates a skills assessment. Now, you can sort them by competence with one click, based on their score. Toggl Hire’s skills tests let you do exactly this (yes, really).

Data-driven recruitment methods like these save time, deliver better-quality hires, and improve diversity by stamping out bias. Follow up with your top scorers to schedule an interview. Then, follow a structured interview process to fairly evaluate candidates and, again, reduce bias.

Gather feedback continuously from candidates to improve their experience as much as possible. It builds your employer brand while also revealing blind spots you may have in your recruitment strategy.

We can speak from experience — at the end of a Toggl Hire skills test, we ask candidates about their experience. Most provide long-ish texts of feedback we collect over the full recruitment cycle and revise before launching our next job openings.

5. Don’t forget about the candidate experience

Your candidates are your currency for attracting top-tier talent. Treat them well, and your reputation will blossom. One of the candidates’ biggest complaints is the lack of timely and clear communication. 47% of surveyed candidates admitted that a lack of status updates or slow email replies would cause them to quit the recruitment process entirely.

Anyone candidates you don’t move forward with post-interview deserves at least a few lines of personalized feedback. This helps them feel valued and maintains the rapport you’ve worked so hard to build. Achieve this by using templated emails for common milestones in your recruitment process. Many applicant tracking systems tools allow this functionality to maintain a personal touch at scale.

It also makes asking for feedback on the process easier if the relationship is still warm despite an unsuccessful application. Encourage candidates to fill in feedback forms or leave a review of their experience on platforms like Glassdoor to build your employer brand.

6. Invest in the onboarding process

Joining a new team is disorientating and overwhelming. Help make your new hires’ integration as smooth as possible with a sleek onboarding process that includes:

• A personalized orientation, ideally from your direct manager or a peer. Start by showing your new hire how to set up accounts, where to find essential documents, and how internal communication is handled.
• Structured training on any standard procedures, company policies, and organizational values
• Set up any standing meetings required to mentor and supervise your new hires in their first weeks. This gives them a structured space to ask questions as they arise.
• An intro to the culture from your peers

You might find it tempting to skip this part — the candidate’s already through the door, right? Wrong! You got ‘em, now you gotta keep ‘em. That’s how to hire employees 101. Good onboarding prevents high turnover while also boosting productivity and job satisfaction.

7. Use tools to support the entire recruitment process

Let’s be real — it’s 2025. You don’t need (or want) to be drowning in endless, manual tasks. But many recruitment tech tools are equipped with AI functionality to speed you up and keep brain rot to a minimum.

Many different kinds of recruitment tools exist to automate repetitive tasks like email communication and interview scheduling to streamline the candidate experience, then conduct skills assessments. (Hint: You’ll want to use Toggl Hire for these core tasks). Sourcing tools are also great time savers — HireEZ and Recruit ’em come to mind.

Common mistakes businesses make when creating recruitment plans

…according to our hiring managers, fresh off the heels of a hiring spree!

In all seriousness, we’ve been in the recruitment tech game for over a decade (did you know Toggl Hire started as Hundred5 back in 2013?), and we’ve learned a thing or two along the way.

Here are the five most common issues we consistently hear when candidates discuss Toggl’s hiring process compared to other companies.

Focusing on the wrong recruitment goals

A house can’t stand on a wobbly foundation. Setting the wrong goals loses top talent, wastes resources, and leads to poor hires. Aligning recruitment goals with business goals means you’re actually going after the right and best person for the job to drive the business forward. This can look like hiring bilingual candidates to support expansion into new markets or reducing bias to build in diversity and culture add.

Making the hiring process too long or complex

Candidates hate long hiring processes. Their time is precious, and let’s be honest, you’re not the only company they’re talking to. This can deter top talent, who have the privilege of being spoilt for choice.

As with most things in life, less is more. Streamline and simplify your recruitment journey to keep candidates engaged.

You can do this by introducing skills testing to speed things up, being upfront about compensation in your job descriptions (we always share the salary for Toggl’s job openings), or giving prompt candidate feedback.

Writing horrible (or really vague) job descriptions

If you try to appeal to everyone, you end up appealing to no one. Be detailed, descriptive, and clear as a bell. “But…but…I won’t attract as many applicants if I’m super specific!” I hear you tremble.

Maybe not, but the ones you do attract will be muuuuch better suited for the role. Candidate quality just shot up, thank you.

Before hitting publish, check your job description for these common pitfalls we see all the time:

• Vagueness — signals to the candidate you don’t know what you want
• Excessive jargon — it gives people the ick
• Neglecting to talk about company culture — you’re people, not robots. Show your personality and values!
• Unrealistic expectations — you know those job posts that expect a social media manager to also be a photographer, videographer, SEO whizz, producer, graphic designer, content marketer, and campaign manager? Yeah, no….
• No salary in the description — 👏 this 👏 is 👏 a 👏 non-starter. Respect candidates’ time by letting them know your pay package upfront (and we don’t mean “between $30,000 – $150,000.”) This saves you from wasting time on people who aren’t aligned on price.

Forgetting about their employer brand

A strong brand attracts talent by showcasing what makes your workplace awesome. Share authentic employee stories, highlight your values, and stay active online to build trust. When your brand resonates, the right candidates will see you as the place they want to be.

Focusing on the wrong aspects of candidates

Focusing too much on the wrong traits (like obsessing over technical skills while ignoring cultural fit) can backfire big time. The key is balance. A well-rounded approach helps you hire people who thrive and contribute to your team’s success.

Collaborative hiring across 2-3 rounds of interviews can be useful here to get a 360 view of your candidates and make the best hiring decision for the company.

Use Toggl Hire for consistently successful recruitment

Even the best recruitment plan isn’t helpful if you lack the tools to execute it. Toggl Hire was built to make hiring as easy as pie, regardless of your recruitment goals.

Toggl Hire simplifies every stage of recruitment, making it your companion to the perfect recruitment strategy — without the steep learning curve of traditional, bulky recruiting tools. It’s best for:

• Speeding up the engine with skills assessments: Cut through time-wasting resumes and evaluate candidates based on merit in just one click.
• Fast-tracking to the shortlist: Automated screening workflows save time by filtering out unqualified applicants, allowing them to focus on the candidates who truly fit your needs.
• Standardizing for simplicity: Toggl Hire’s centralized platform ensures clarity and consistency across the team.

To top it all off, Toggl boasts a fantastic candidate experience — it’s one of the things we’re most proud of. Create a free Toggl Hire account and see what all the fuss is about.

More than 14,000 businesses in the US claim the federal Research and Development (R&D) tax credit in a year. If you rely on this funding, be aware that the claiming process has recently changed.

The Internal Revenue Service (IRS) has announced an update to Form 6765 — the Credit for Increasing Research Activities form — which gives businesses access to these tax credits. By filling out Form 6765 with the new requirements, businesses can calculate the amount of tax credit they’re eligible to claim — either by Regular Credit or Alternative Simplified Credit (ASC).

This guide breaks down the latest changes CPAs and other tax professionals need to know to stay compliant in 2025.

TL;DR — Key Takeaways

• Important changes are coming to Form 6765 that impact how businesses track their activities, time, and spending.
• Filing Form 6765 correctly allows R&D-heavy businesses to claim tax credits for the current year and is essential to remaining compliant with the IRS.
• There are three new sections and a few exemptions for filers to be aware of going into 2025.
• Implementing an automated time-tracking solution like Toggl Track will save you time and money, ensuring you file Form 6765 accurately and compliantly with zero stress.

Key changes to IRS Form 6765 in 2025

Historically, companies have used Form 6765 to report numerical, quantitative data. Qualitative documentation was sent to the archives in the event of an IRS audit.

But now? The revised Form 6765 requires businesses to include much more qualitative data directly with the tax return to explain what the claim is for.

Taxpayers must report the components that make up 80% of their total Qualified Research Expenses (QRE), with the number of business components capped at 50.

Despite being pruned back compared to earlier proposed changes to the form, this process still requires a significant reporting effort from the taxpayers to receive their incentive.

The IRS has invited taxpayers and clients to provide feedback on the following items through June 30, 2025:

• Section G Business Component information reporting for controlled groups (optional for the 2024 tax year but mandatory from 2025)
• Accounting Standards Codification (ASC) 730 Research & Development (R&D) Directive
• Section G Business Component detail
• Statistical sampling

Section E: Other Information

The new draft form 6765 asks for additional information in Section E:

• Number of business components worked on during the current tax year
• Total officer wages
• Acquisitions and dispositions
• Whether any QREs were determined under the Accounting Standards Codification (ASC) 730 directive

Section F: Qualified Research Expenses Summary

A new section requiring an expense breakdown of:

• Total pay
• Supplies
• Rental or lease cost of computers
• Contract research expenses

These line items were previously in Sections A and B in older versions of the form.

Section G: Business Component Information

Another new addition to form 6765, here you’ll input:

• Details on controlled group members and activity codes
• Names and types of business components
• Software classifications
• Objectives of the research
• Breakdown of wage expenditures for direct research, supervision, and support by business component
• Costs for supplies, computer rentals or leases, and contract research by business component

This section must contain the required information from the 2025 tax year.

Exemptions from new reporting requirements

The new form is designed to make compliant reporting easier and faster for smaller businesses. If your business meets the following criteria, you may be exempt from some of the new reporting requirements:

• Section G is optional for Qualified Small Business (QSB) taxpayers, as defined under Internal Revenue Code Section 41(h)(1) and (2), who elect to claim a reduced payroll tax credit.
• Companies with total QREs of $1.5 million or less and gross receipts of $50 million or less, as determined under Section 448(c)(3), when claiming a research credit on an originally filed return, will also not be required to complete Section G.

Steps to submit Form 6765

You must document your qualified R&D expenses by completing the four basic sections of Form 6765:

• Section A is for claiming the regular credit and requires information on eight specific lines (1, 2, 3, 7, 8, 10, 11, and 17).
• Section B is for the alternative simplified credit (ASC).
• Section C lists additional forms and schedules that must be reported based on the business structure.
• Section D is only needed for qualified small businesses (QSBs) opting for a payroll tax election.

The IRS advises businesses to calculate their credit using the regular and simplified credit methods and then complete the section (A or B) that provides the highest tax benefit.

How does the US R&D tax credit work?

Normally, companies can use 6-10% of their qualifying research and development (R&D) expenses as a tax credit to directly reduce the amount of federal income tax they owe.

Example: If your company has $1 million in qualifying R&D expenses, you might be able to claim an R&D tax credit of $60,000-$100,000, which would directly lower your tax bill by that amount.

So, what counts as a qualifying R&D expense? We go over that more in-depth in our full guide to maximizing the US R&D tax credit, but here’s a TLDR:

• Creating intellectual property such as processes, patents, formulas, techniques, prototypes, or software
• Dedicating time and resources to new product development
• Iterating, improving, or redesigning existing products
• Hiring the necessary staff to engage in qualified activities
• Expenses to run the R&D, such as salaries, supplies, and tools

If you’re unsure, the IRS outlines four tests that count as qualifying R&D expenses:

1. Section 174 Test: Making something new

Example: A car company spends money to design a new electric battery that lasts longer. The money spent on testing, designing, and improving the battery qualifies as R&D expenses.

2. Discovering Technological Information Test: Using science or technology

Example: A software company creates a new AI program to detect fraud in bank transactions. The program involves computer science and algorithms, qualifying it for R&D tax credits.

3. Business Component Test: Make a product, process, material, or software that helps the business

Example: A toy company develops a new type of plastic that makes toys safer and more durable. Since the new material improves their product, it qualifies.

4. Experimentation Test: Testing different ideas to improve over time

Example: A sneaker company tries different materials to make waterproof shoes that are still breathable. They test different combinations until they find one that works. The costs qualify for tax credits since they conducted an iterative testing process.

How to accurately document R&D activities

Keeping meticulous records ensures compliance with IRS requirements while maximizing your potential tax savings. Here are some best practices for tracking R&D expenses and activities:

• ⏱️ Maintain detailed time logs: Keep precise records of time spent on R&D activities, including employee hours for research, supervision, and support. Break down the work by business component (e.g., product, process, software).
• 💻 Use digital tools: Leverage time-tracking software and project management tools to track work on specific R&D projects efficiently. These tools automate reporting, making it easier to allocate expenses correctly.
• 💰 Document all expenses: Record every cost associated with R&D, including wages, supplies, contract research, and equipment. Make sure you categorize your expenses correctly to reflect the qualifying activities.
• ⚡ Review regularly: Audit your records regularly to keep everything up-to-date and avoid overlooking eligible expenses. This is a simple way to prevent costly errors during the credit calculation.

Automated time tracking for accurate Form 6765 reporting

As we’ve seen, precision time-tracking is a key component to accurately and compliantly filing Form 6765. By automating your time-tracking, you’ll unlock tax credits (almost) on autopilot.

Small to mid-sized businesses don’t need the complexity of expensive compliance and payroll management systems but do need something more intuitive and functional than a basic spreadsheet.

Enter Toggl Track — the “Goldilocks” solution. Its simplicity and automation make it ideal for teams needing detailed, audit-ready time tracking to qualify for tax credits without overwhelming costs or complexity.

❌ Spreadsheets: Too basic	✅ Toggl Track: Just right	❌ Gusto: Too Complex
• Requires manual effort; super time-consuming to maintain, especially for larger teams	• Spotlight on R&D: See qualifying research, and activities, allocate wages accurately, and easily ensure compliance	• Overkill for smaller teams; complexity and feature set may exceed the needs of smaller companies
• Not scalable and lacks automation, notifications, and integrations for advanced workflows	• Minimal learning curve and full adoption, from engineers to finance leaders	• Longer onboarding; takes time for team to adapt
• High risk of human error, such as forgetting entries, which can jeopardize IRS audits	• Automation: Time tracking so easy, it practically runs itself; one click, or no clicks at all	• Costly; more expensive than tools like Toggl Track for what are often unnecessary features
	• Know where time goes, down to the task and project
	• Security and integrity: Audit logs, data integrity features, required field, reminders, SSO, locked time entries
	• Integrates with your tools: Asana, Jira, Salesforce, Quickbooks and 100 others
	• Pinpoint qualified research activities and separate them from all the others
	• Multi-platform: Intuitive apps that work anywhere — lab, remote, or on the go
	• See who’s working on R&D projects, what’s getting done, and how long it all takes — in one place

Use Toggl Track for R&D compliance

R&D tax credits will be denied if you submit your form with only minimal information about expenses and activity hours.

Luckily, that’s exactly where Toggl Track excels. Our platform easily tracks every hour your team spends on eligible R&D tax credit activities so you can streamline your documentation and make confident claims.

But don’t take our word for it. Here’s what users have to say:

🌟 “The acceptance from all users is very high. I have seen a 40+ year employee move from their Excel-based tracking they have used forever, to this tool without any issue.” —5/5 stars review on G2.com

🌟 “Toggl Track helps me keep my reports in a way that’s easy for me to compile and easy for our accountant to read. It also lets me run reports with a wide range of customized date ranges (monthly, quarterly, weekly, daily, etc).” —5/5 stars review on G2.com

Ready to give it a try? Book a free demo to learn more.

Innovation is key to maintaining a top market position. But creating new technologies and commercializing scientific discoveries is neither fast nor cheap.

To help businesses, governments offer research and development tax credits — special deductions for research and innovation to offset income tax liabilities. For example, France offers a 30% tax credit (aka a discount) on R&D expenses up to €100 million. And until April 2024, the UK had a 186% super-deduction for qualified small businesses (now restored to 100%). 

In the US, R&D tax incentives are available at the federal (through the IRS) and state (through your local Department of Revenue) levels. 

The federal research & development tax credit (formally known as the Credit for Increasing Research Activities) allows companies to claim 6-10% of qualifying R&D expenses as a federal income tax deduction. You can receive up to $250K in payroll taxes if you meet eligibility criteria.

At the state level, New York offers an extra 10-20% R&D tax credits for local businesses, while Delaware refunds the difference between the company’s in-state tax liability and the total R&D tax credit given. 

Naturally, the “offer” comes with some strings attached. Companies must provide the IRS with data on their R&D spend, including specifics about activity types, duration, and cost. Getting those numbers correct can be daunting, especially as the rules constantly change. 

This guide answers all questions about the federal R&D tax credit, from eligibility and qualification to accurate reporting, in accordance with the latest rules and automated data collection tools.

TL;DR — Key Takeaways

• Federal R&D tax credit applies to qualified expenditures related to building new products, commercializing scientific findings, or investing money in other process enhancements. 
• New requirements came into effect for the 2024 tax year (reported in 2025), and it’s important to stay updated on changes to maximize your credits.
• You must operate as a legally registered entity and perform research activities that pass a four-part qualification test to qualify for an R&D tax credit.
• Your gross receipts must not exceed $5 million to claim the R&D payroll tax credit.
• If you pass all four parts of the qualification test, you can claim a tax credit for qualified research expenses like employee salaries, research supplies, contracting expenses, software, and hardware costs. 
• You must keep tangible proof of all your activities in case of an IRS audit. That’s the real challenge because many teams don’t use time-tracking tools, keep poor project documentation, or just don’t have an effective process for R&D reporting data collection. 
• To streamline R&D tax reporting, embed a time-tracking tool into your workflows to automatically capture R&D-related work hours, tasks, and expenses. 
• Toggl Track enables you to seamlessly capture qualified research activities and produce auditable logs for reporting. Boasting 100% user adoption, our time-tracking tool helps companies claim the maximum available tax credits. 

What to know about the US R&D tax credit in 2025

The R&D tax credit was introduced in the Economic Recovery Tax Act of 1981 and was renewed and extended multiple times before becoming a permanent fixture of the Internal Revenue Code (IRC) in 2015. 

Since then, R&D tax credit rules have changed significantly, but CPAs often recommend startups and small businesses apply for them (as they get the most perks!) Larger companies engaged in innovative work may also take advantage of the benefit to offset their tax burden. 

Following the 2024 changes, here’s a recap of key US R&D tax credit changes in 2025 to look out for:

In effect

Pending approvals

• Payroll tax credits are available to new and existing businesses, generating gross receipts of less than $5 million for the tax year or no gross receipts for any tax year before the preceding 5-tax-year period • Flow-through entities (like an S corporation or LLC, treated as a partnership for tax purposes) can also claim payroll tax deductions.  • Updated Form 6765 requires businesses to provide more qualitative (not just quantitative) data about their research activities.  • The new Section G is optional for 2024 tax returns (processing year 2025) but will become mandatory for tax year 2025 (processing year 2026) for everyone except qualified small businesses and taxpayers with lower qualified research expenses (QREs).

• Reversal of R&D expense amortization. Under the Tax Cuts and Jobs Act (TCJA), companies must spread R&D expenses over five years for domestic research and over 10 years for foreign research. A vote to repeal it didn’t pass Congress, but the new administration is keen to adopt it.  • If it succeeds, businesses could claim domestic R&D expenses in the same year (including all R&D expenses amortized until 2022). However, amortization would still apply to all non-US R&D expenditures. • Employee Retention Credit (ERC). Introduced during the pandemic, ERC allowed businesses to claim substantial payroll tax credits. But it soon became a major fraud source, forcing the IRS to pause new ERC claims processing payouts on September 14, 2023.  • Since then, the IRS hasn’t resumed ERC processing, causing a flurry of lawsuits and taxpayer complaints. The filing deadline for 2021 ERC claims is April 15, 2025 — and it’s still uncertain what the IRS will decide.

It’s a mixed bag of changes. On the pro side, companies can now receive up to 20 cents in credits for every dollar spent on qualified research activities (QRAs). But Form 6765 has become more detailed and the IRS is stringent about auditing the submitted income tax returns. 

Who qualifies for the R&D tax credit?

Technically, any type of business qualifies if it fits the requirements of legal structure, research activities, and revenue cap. This includes: 

• All registered legal entities, including partnerships, S-corporations, LLCs, and corporations that qualify for the federal R&D tax credit.
• Businesses whose research relates to a product, process, software, technique, formula, or invention.
• Businesses whose qualified research activities aim to develop or enhance a qualitative or quantitative characteristic for the above (e.g., better functionality, durability, quality, or performance). These activities must be rooted in hard science or engineering principles to resolve existing technological uncertainty. Finally, the research process must be systemic (e.g., it must follow a logical, explainable flow).
• Small businesses generating under $10 million in gross receipts can also offset payroll taxes with the R&D credit.

How to pass the four-part test to qualify for the R&D tax credit

To get approved for an R&D tax credit, you must pass the four-part test defined by the IRC Section 41. The parts include a Business Component Test, Technological in Nature Test, Elimination of Uncertainty Test, and Process of Experimentation Test.

If you fail one segment, your claim won’t get approved. Here’s how to avoid that: 

1. Business Component Test

Your research must clearly relate to a core aspect of your business — a workflow, operating procedure, software, or product. Its goal must be to produce a measurable improvement in its performance, functionality, or reliability, not just aesthetics.

✅ Qualifying activities	❌ Non-qualifying activities
• Developing a more energy-efficient battery version  • Building software for recruiting workflow optimization  • Brewing a new beverage with 50% more nutrients	• Collecting customer data with no clear objectives  • Purchasing and installing a new MarTech platform  • Changing the product’s ergonomics and color palette

💡 Tips for passing this stage:

• Document how the research objectives relate to your business operations
• State the key research hypothesis and their expected impacts 
• Share tangible proofs like a patent application, solution blueprints, or software architecture 

2. Technological in Nature Test 

Your research activities must be rooted in hard sciences like engineering, chemistry, physics, or computer science. They can’t be purely based on arts, social, or humanities research. 

✅ Qualifying activities	❌ Non-qualifying activities
• Developing a reinforcement learning agent for autonomous driving  • Creating new drug formulas using biotech research  • Creating a new concrete formulation with higher tensile stress resistance	• Relying on user experience research to improve product interface  • Hosting customer focus groups to validate a new product prototype  • Using new typefaces and logos for packaging

💡 Tips for passing this stage:

• Write a memo explaining which scientific principles the project involves 
• Keep records of any simulations, models, and calculations 
• Present a physical prototype or a digital model under development 

3. Elimination of Uncertainty

You must demonstrate your project aims to resolve uncertainty about a product development or improvement — meaning you didn’t have a clear answer before starting. 

✅ Qualifying activities	❌ Non-qualifying activities
• Comparing several ML models for recall and prediction accuracy  • Testing several material types for a new drone frame  • Refining an automated claims management process with poor outcomes	• Fixing bugs in a recently installed business analytics tool  • Customizing an off-the-shelf CRM app  • Replacing the current material with a well-known alternative

💡 Tips for passing this stage:

• Document your problems, challenges, and unknowns encountered in the process 
• Give evidence of trying different methods to solve the research problem 
• Keep internal research notebooks, memos, and testing reports 

4. Process of Experimentation

Your research must be systematic, meaning it should follow a logical process of testing different approaches and refining solutions through modeling, simulation, prototyping, or other iterative methods.

✅ Qualifying activities	❌ Non-qualifying activities
• Benchmarking performance of two predictive analytics model versions  • Split testing app loading speeds with two different tech stacks  • Doing finite element analysis to compare structural stress tolerance	• Updating a software component without interactive testing   • Using a reference architecture to implement cloud storage  • Going with the first proposed app design

💡 Tips for passing this stage:

• Show that compared multiple alternatives before finding the right option 
• Keep records of early prototypes, model versions, and simulation results 
• Document all failed attempts and explain why others worked 

If you pass the four-part test, you’ll be able to claim back an income tax credit for qualified research expenses (QREs) like employee wages, supplies, contract research, and hardware costs. 

Why R&D tax reporting is so difficult

The IRS can legally ask for the above proofs for five years after the year of your R&D and claim submission. During this time, you may be randomly selected (i.e., audited for no particular reason) or scrutinized for making large or frequent claims. Beware: Any discrepancies in the stated expenses versus supporting documentation will require you to dig deep and make extra justifications.

This makes R&D tax compliance rather taxing (pun intended), even with a CPA on call.  Because it’s the business’s responsibility to keep meticulous records, track all time and spending on qualifying activities, and present these as easy-to-follow reports to the Feds. 

🗂️ Administrative burden

A business must prove it’s spent money or other resources on R&D projects (not just regular operational activities) to qualify for R&D tax credits. 

This adds a lot to people’s workload. Department managers and HR must explain what records employees need to keep and in which format. You may need to invest in specialized software (e.g., an MLOps platform to track model development experiments) or extra secure cloud storage.

R&D teams need to improve their documentation, while a compliance team (if you have one) must ensure records meet changing regulations and fix errors. This leads to endless ping-pong between departments as people scramble to find missing documents or finalize reports before the tax deadline.

⏱️ No way to accurately (or easily) track R&D time

No company spends 100% of its time on qualified R&D. Even prolific “research” people like engineers or data scientists will switch between regular ops, admin, and innovative tracks.

Besides logging hours (or estimates,) you’ll need to assign them to different projects, tasks, and activities and keep some records (e.g., a timesheet) as proof for authorities.

Building an employee time-tracking habit can be hard with manual timers and spreadsheets. Your team will be frustrated, skip obligations, or log guesstimations. In the “best” case… you’ll leave R&D money on the table. In the worst…you risk painful regulatory investigations.

📑 Poor documentation

The IRS wants R&D “receipts” — and patchy records mean smaller rebates, increased audit risks, or outright claims denials.

In June 2024, the IRS published a revised draft of Form 6765, an update to its “preview” of changes to Form 6765, released in September 2023. The new version outlines qualitative and quantitative information requirements many companies must provide for the 2025 tax return (due in 2026). 

For now, the following information in Section G remains optional:

Section G Qualitative information	Section G Quantitative information
• Name or identifier of the business component (e.g., Project Alpha #1)  • Business component type (e.g., product, process, software, formula, etc.)  • Component designation (e.g., a predictive pricing model)  • Information sought to be discovered (e.g., main research hypothesis)	• Employee wage expenses allocated between direct research, supervision, and support by the business component • Costs of supplies, equipment rental or lease, and subcontractor expenses for each component

In other words — the IRS calls for more detailed documentation during tax reporting. Implementing these changes will be time-consuming without extra support tools. 

How to maximize R&D tax credits with automated time tracking

R&D tax reporting is about demonstrating clear-cut evidence you’re claiming money for qualified activities. Not a cent more. 

Spreadsheets have typically been a go-to solution for collecting and storing this evidence, especially for smaller companies. But most teams quickly realize spreadsheets are too tedious and time-consuming to maintain, especially as businesses grow. At the other end of the spectrum, many people management and payroll apps are often too expensive and complicated for average users. 

Toggl Track is the perfect Goldilocks solution for small to mid-sized businesses — it’s ‘just right’ for teams looking for sleek, scalable, and secure automated time tracking of QRAs and QREs. It’s more efficient than spreadsheets and has less distracting functionality than more complicated platforms. 

With a fast, one-time setup, Toggl Track allows you to automatically log all relevant tasks, projects, and expenses for teams of any size. After powering it up automatically on desktop devices and activating it in one click on mobile, Toggl Track seamlessly captures all work activities, allowing users to easily share their QRAs with admins.

Managers can easily account for related expenses using different billing rates (and easily track budgets, too!).

Toggl Track also includes audit and lock time entries to avoid errors and prove data integrity in case of an IRS audit. You can also share comprehensive reports with your accountants that break down time and expenses spent on various projects and activities — all of which must be disclosed in Section G. 

Toggl Track: Your key to tracking qualified research activities accurately  

We’ve built a time tracking experience that practically runs itself across desktop, web, and mobile and in 100+ popular business products (with a simple integration). This means your team will no longer need to:

❌ Keep messy research activity logs in a notebook 

❌ Guess-timate hours for different tasks and projects 

❌ Complain about hours wasted on “pointless” data entry 

At the same time, you’ll get audit-ready reports for R&D tax credit claims and end-of-year reporting: 

✅ Know exactly how much time goes into R&D projects with reports to track progress, set pace, and prepare reports. 

✅ Capture qualified research expenses like employee wage and subcontractor expenses and get predictive budgeting insights. 

✅ Streamline compliance with exportable expense reports and time logs without paying a ton for more complex software. 

✅ Benefit from baked-in data security and integrity — private data hosting, locked time entries, SSO, and not a hint of employee surveillance.

…And if you run a bigger team, our Enterprise plan also includes a sweet volume discount and an even sweeter Customer Success Manager to help you set up R&D tracking dashboards and onboard new users. 😉

Get a done-for-you setup experience — full Toggl Track integration into your workflows, user configurations, and custom dashboard views — without a premium price tag.

Tips for 100% team adoption

Because Toggl Track is simple and non-intrusive, it’s an easy “sell” for the teams. 

Engineers, software developers, data scientists, and C-suite members across industries love using Toggl Track. To join them, here’s how to ensure a smooth and streamlined adoption experience: 

• Host a user training session (together with our Customer Success team on Enterprise plans), explaining the why and how of using time-tracking for R&D activities. 

• Set up a Slack channel to answer any follow-up questions, share more features, and troubleshoot issues. 

• Document all new requirements in a shared document in a company wiki for quick reference. 

• Send an update on when time-tracking goes into effect. Give people about a week to play with our tool and have their A-ha moment. 

• Configure automatic reminders to ensure everyone logs their activity on time and in line with compliance requirements. 

• Add time-tracking training to your onboarding program for new hires to quickly build their habit.

Learn how to increase your R&D tax credit with time tracking during a free, personalized demo

R&D tax reporting doesn’t have to suck the life out of your brightest people or leave you with a ton of gray hair due to compliance fears. 

With Toggl Track, you can effortlessly meet all the reporting obligations on Form 6765 and confidently claim the maximum applicable credit percentage. 

Should anyone ask questions, you’ll use Toggl Track’s reporting capabilities to whip up irrefutable proof of your innovative R&D work. 

Get the full experience of seamless R&D tax reporting with a walk-through from our team, showing all product features and data dashboard. Book your free demo here.