What is an applicant tracking system (ATS)?

How the applicant tracking system process works

An ATS helps an organization manage each step of the hiring process, from creating the job posting to making an offer to the most appropriate candidate. This includes integrating with major job boards to streamline job postings, organize applications and enable candidates to create profiles. The ATS keeps track of all the activity that takes place around a candidate.

The following steps are typical of the recruitment process:

1. Job requisition. The job requisition is created and, if necessary, approved in the ATS.
2. Job posting. The job is posted in one or more locations, including internally for employees, on the organization's website and on external job boards.
3. Candidate applications. Candidates apply for the position on the organization's website or directly on the job board if it offers that capability. They might have to answer questions related to the position, such as their work experience and education. Some systems can be set up to reject candidates automatically based on answers to certain questions.
4. Candidate screenings. The ATS might parse resumes and rank new applications as they are submitted.
5. Evaluations. The recruiter reviews applicants in the system and selects candidates to pursue further. Candidates who are not selected might receive an automated rejection email.
6. Interviews. The recruiter, hiring manager and others interview the candidates. They enter notes into the ATS following each interview for future reference.
7. Job offer. When the preferred candidate is identified, the recruiter will typically use the ATS to send them an offer. The ATS can also help the hirer nurture promising candidates.
8. Hiring and onboarding. If the candidate accepts the offer, they are hired into the HR system. The onboarding functions of the ATS or human resources (HR) system are made available to the newly hired employee, who can read and digitally sign policies, complete online forms and learn more about the organization.

An ATS is important in many ways, even for small companies. First, candidates expect companies to offer a positive candidate experience and user-friendly application process, which most ATSes provide. Second, for the employees involved in the recruitment process -- such as recruiters, hiring managers and approvers -- an ATS automates and streamlines the hiring process. Finally, an ATS provides a repository of data for future reference -- for example, when a past candidate applies for a new job -- or it can be used as a tool to search for potential candidates in applications for previous job postings.

Why should an organization use an ATS?

The use of an ATS in this era of AI-supported hiring systems is not just beneficial; it is rapidly becoming essential. This is probably obvious in the context of a large company, where there are a significant number of positions to be filled at any given time, but it is just as important for smaller organizations. The following are reasons why organizations use ATSes:

• Make hiring more efficient and less costly. These systems help save money and time by automating resume screening and shortlisting. ATSes also speed up interview scheduling and provide batch communication with candidates.
• Automate legacy hiring processes and technology. Most legacy recruitment and hiring systems predate the advent of digital automation. ATS software automates many processes by exploiting workflow technologies and cloud-based data management.
• Identify the best candidates. An ATS' automated screening and analytics functionality makes it easier to navigate the candidate selection process, ensuring that important factors in matching candidates to a position are not missed.
• Rectify engagement challenges. ATSes bolster engagement and nurture top candidates through collaborative tools shared between recruiters, hiring managers and candidates.
• Provide transparency and metrics. Many, if not most, legacy recruiting systems and processes possess few tools for measuring their own effectiveness. ATSes fill that gap with candidate sourcing, diversity metrics and other features.
• Resolve compliance challenges. ATSes can offset compliance issues through their structured records and logs.
• Offer data-driven decision support. ATSes minimize subjectivity in hiring by providing analytics and insights derived from them.
• Integrate recruitment tools. ATSes bring recruitment processes together under a common umbrella, integrating processes and the tools that facilitate them.

Benefits of applicant tracking systems

ATSes are designed to organize and speed up the hiring process by providing the following capabilities and benefits:

• Improved candidate experience. ATSes make the process easier for candidates by ensuring strong communication with the talent acquisition and hiring teams and speeding up the process.
• More qualified candidates. ATSes make it easier to identify the most qualified candidates, aggregating their information into a single view. They can also help sort and rank candidates by conducting an initial scan to select those candidates who best meet the job qualifications.
• Improved efficiency for the hiring team. ATSes let organizations reuse job descriptions for multiple positions, saving time and reducing talent acquisition and hiring team members' efforts. The system maintains a database of new applicants and people who could be prospects for future openings.
• Automated recruiting and hiring processes. ATSes speed things up and reduce errors with many automated processes, such as automated responses, interview reminders and new job opening alerts for people in the database. They can post and manage job ads on the organization's internal and external career sites as well as across multiple job sites, such as Indeed and Monster, and social media sites, such as LinkedIn.
• More objective hiring process. In providing analytics to support decision-making, ATSes lessen the subjectivity in hiring.
• Improved onboarding. ATS' communications tools establish strong communication between recruiters, candidates and hiring managers early on, streamlining onboarding and keeping everyone on the same page.
• Accelerated hiring cycle. Stronger communication and automated processes speed up recruiting, interviewing, screening, decision-making and onboarding -- accelerating the entire cycle while keeping it less error-prone.
• Stronger compliance. The enhanced data management features of an ATS bolster compliance in hiring processes.
• Simplified and accelerated high-volume application and screening. ATS' automation functionality enables it to process more applications, screen candidates more quickly and interview them more promptly, increasing recruiting and hiring capacity.
• Stakeholder involvement. Stronger, more integrated hiring team communications and better management of candidate data will make stakeholders better informed and more participatory.

Key ATS features

Taking full advantage of the features available in an ATS can help reduce manual processes, engage potential candidates and ultimately fill open requisitions faster and with better candidates. However, many ATSes have the following features and benefits that might not be as obvious:

• Career and employment website optimization. Job sites are adding ATS-like tracking features and moving away from the idea that they are just job boards. Some sites rank applicants by how well they meet the qualifications in the job ad. Job sites might also offer integration with an existing ATS.
• High-quality reusable job description generation. ATSes offer organizations the efficiency of reusing job descriptions for multiple positions.
• Job posting across multiple candidate destinations. ATSes can manage postings across an array of sites where candidates are likely to see them.
• Natural language processing-powered resume scanning. With built-in NLP, ATSes can scan and rank resumes upfront, saving the talent acquisition and hiring team time.
• Application database and candidate tracking. ATSes offer additional efficiencies through their data management features, organizing candidate information and tracking candidates' progress in the screening, hiring and onboarding processes.
• Candidate screening, sorting and filtering capabilities. ATSes might use varying degrees of intelligence to sort candidates. The technologies range from keyword matching to algorithms that take a deeper look at each candidate's data. In response to a resume, an ATS could send the applicant a series of questions to help recruiters learn more about the candidate.
• Automated interview scheduling and note-taking. ATSes can handle interview and follow-up scheduling as well as automated notetaking during meetings and interviews.
• Team collaboration and communication features. ATSes facilitate collaboration by enabling anyone involved in the hiring process to stay abreast of the progress in filling a job opening and contribute to the candidate selection discussion.
• Fully virtual hiring processes. ATSes bolster the candidate experience by taking advantage of automated processes and remote interaction, requiring less face-to-face contact.
• Mobile-friendly application processes. Many ATSes facilitate easy job applications by enabling users to apply on their mobile devices.
• Bias reduction measures. ATSes can reduce bias, unconscious or otherwise, in recruiting and hiring. For example, machine learning (ML) and NLP can be applied to job ads to avoid wording that might subtly discourage candidates of a specific gender from applying. Bias is a major issue in hiring, according to researchers.
• NLP capabilities. ATSes that use keyword-based screening methods are starting to see competition from systems that use ML and NLP. Some vendors are building in capabilities that analyze a company's past hiring decisions to discover the characteristics of top-performing employees. This data on current employees is then used to inform the ATS algorithm, which searches for patterns in work history and education that are indicative of success.
• Generative AI features. By way of generative AI, ATSes can generate reports, write emails and notes and create other communications artifacts, relieving talent acquisition and hiring teams of many routine writing tasks.
• Chatbots and candidate self-service. Some systems use chatbots to interact with candidates and help them complete their applications. They might also attempt to keep candidates engaged, update job seekers on their status and alert them if additional information is needed.
• Compliance policy checking. As part of their process automation, ATS tracking features include ongoing evaluation of compliance.

Choosing an ATS vendor

The ATS market is competitive and crowded, with at least 100 ATS vendors. According to Fortune Business Insights, the global market for talent management software -- which includes ATSes -- reached $10.09 billion in 2024 and is projected to grow to $25.01 billion by 2032.

The advantage of the large number of vendors is that organizations can choose the one with a product that best fits their needs in terms of functionality, cost and other important criteria, such as cloud-based vs. on-premises deployment or how much progress the vendor has made in integrating AI into the application.

When searching for an ATS, organizations should consider one of the following types of vendors:

• Vendors that focus on the ATS market, including ICIMS, Jobvite, Lever and Oracle Taleo. They might also offer an onboarding module in addition to the ATS.
• Vendors that offer an ATS module as part of an overall HR management system. Products include Dayforce, Oracle Cloud HCM (Human Capital Management), SAP SuccessFactors  and UKG Pro. In some cases, the ATS is only available if an organization implements the vendor's core HR module.

It is also important when considering an ATS vendor, to ensure that the following considerations are covered:

• Scalability. Do the ATS' processes and data management resources scale well?
• Explainable AI capabilities. ATSes greatly benefit from both generative AI and smart workflows. These should be well articulated so that the talent acquisition team and hiring team members can have a firm understanding of their potential upfront.
• High-quality personalization. If communications are automated, then they must present the same level of personalization that candidates would experience with human recruiters and hiring managers. Does the ATS offer strong personalization features?
• Enhanced security and compliance. Do the ATS' workflows and communications features prioritize security and compliance?
• Integrations. Is the ATS well integrated internally, and does it integrate well with external systems such as recruitment CRM?
• Configurability. How flexible is the ATS? Can it adapt well to the needs of the organization?
• Mobile-friendly user interface (UI). Candidates expect an easy and convenient mobile experience.

Popular applicant tracking systems

The following sampling of products from specialized ATS vendors is based on research by Gartner, G2 and others:

• ClearCompany. This ATS includes onboarding and has numerous AI features, which the vendor continues to expand.
• ICIMS. This comprehensive system includes many of the same features one would expect from the top vendors.
• Jobvite. This ATS offers onboarding functionality to simplify the new hire process.
• Lever. This easy-to-use ATS includes built-in CRM features.
• Taleo. Acquired by Oracle in 2012, Taleo is a popular system used by companies of all sizes.
• VidCruiter. This ATS platform includes video features to facilitate video interviews, candidate video submissions and virtual events.

How applicants can 'beat' applicant tracking systems

Applicant tracking systems are designed primarily to help the recruiting team streamline its processes. Because of this, a candidate's resume might never be seen by a human and, if it is, it might only be for a few seconds.

In the past, applicants employed tricks, such as using fancy templates to make their resumes stand out. Today, there are numerous ways applicants can try to increase the likelihood of a successful application, including the following:

• Tailor the resume to the job description. If the hiring company is using an ATS that ranks resumes based on keywords, the applicant has a better chance of ranking high if the terminology in their resume matches what the company requires.
• Don't embellish. Applicants should avoid stretching the truth and not include keywords where they have no experience. Their resume might get to the top of the pile, but the recruiter will quickly spot the embellishment.
• Be prudent with acronyms. When using a phrase for the first time in a resume, include both the acronym and the spelled-out form. Often, recruiters are not specialists in the applicant's field and might not be well versed in its terminology.
• Avoid using images. If the organization is using resume parsing, the image will not be read, leaving the applicant's ATS profile with missing data.
• Save your resume. Applicants should save their resumes in a readable format, such as a Microsoft Word-compatible document or PDF file.
• Keep sections separate. Applicants should use standard section headers that a resume parser will recognize. For example, they can use "Education" as a header to list the education programs they have completed.
• Don't miss an email. Applicants should watch their junk mailbox to ensure they don't miss an email, since the correspondence will often be automated and can look like junk mail.
• Keep it professional. To keep things professional, applicants should use correct spelling, grammar and headings and ensure that sections line up correctly.
• Summarize. Applicants should include a summary at the top of their resume, highlighting what they can provide the organization. This will likely be the first thing a recruiter looks at when they open the applicant's resume.
• Keep it simple. Use a simple font -- such as Arial or Times New Roman -- rather than one that looks artistic, which the resume parser might not be able to read properly.
• Beware of knockout questions. Applicants should be aware when submitting their resumes that some of the questions a company asks might be used to disqualify them. This means that if they do not provide the answers the recruiters want, they will be automatically rejected.
• Recognize evergreen positions. Don't be surprised if a supposedly open position has been filled. Some organizations have positions they are always recruiting for, such as roles that tend to have high turnover. These positions, referred to as evergreen, might always appear on the organization's websites, even when candidates have been hired.
• Remember login information. Applicants must remember their usernames and passwords to log into the ATS and update their resumes or profiles or apply for other positions.

ATS vs. CRM

Historically, companies relied on an ATS to attract job candidates. While ATSes did a good job of automating the hiring process and filling open positions, they weren't designed to manage the talent pipeline. Recruitment CRM systems were created to fill this gap.

These systems help recruiters manage data for past candidates, passive candidates and employees while keeping them at the forefront when it is time to fill new positions. The recruitment CRM also acts as a tool for sending candidates communications, such as informing them of new positions or significant events such as job fairs, major client wins or leadership changes.

Another way to understand the difference between the two systems is to view an ATS as a system focused on the present -- current job postings -- while a recruitment CRM system has a longer-term focus on future positions.

Given that both systems are designed to help a company find qualified candidates, vendors will often include recruitment CRM functionality in the ATS, but there are niche vendors that specialize in one or the other.

The future of applicant tracking systems

Applicant tracking systems have advanced significantly in the past 10 years. Once used primarily to simplify the most routine recruitment tasks, today they can host video interviews, use AI to parse candidate resumes and write communications, and more.

The following are key features to look for in leading-edge and future ATSes:

• Improved UI. Top vendors continue to look for ways to simplify the experience for people involved in the hiring process, especially candidates, recruiters and managers. For example, in the past, many systems required recruiters to open individual files to read a candidate's resume. Today, many systems can display the resume without requiring extra effort.
• Advanced AI capabilities. AI has been integrated into ATSes for many years. New advancements, such as generative AI, are being used to perform more complex tasks, reducing the need for humans to find qualified candidates, write offer letters and perform other common hiring tasks.
• Mobile-first functionality. Traditionally, mobile access was often built after the main system was complete, and it only offered a subset of ATS functions. Given the global dependence on mobile access and the trend toward younger generations using mobile applications early in their lives, companies will shift their focus to providing a mobile experience throughout the recruitment process.
• Social media integrations. ATSes often integrate with popular HR systems, but their integration with social media platforms is still limited. In the future, the typical ATS might be able to pull in data directly from applications such as LinkedIn when a candidate's job experience meets the requirements for a position.
• Improved ATS in all-in-one systems. All-in-one HR systems usually offer an ATS as part of a suite of HR modules, but the systems tend to be limited in functionality. For this reason, many companies use a third-party vendor for their ATS, but that's starting to change as the included systems improve.
• Analytics integration. Many ATS applications enable users to analyze the data captured in the ATS itself, but this limits the types of analysis that could be possible with convenient access to related data in other systems. For example, one of the challenges HR teams face is measuring the success of new hires against expectations. Data in performance management systems could help bridge the gap, but the process is cumbersome and often requires manually merging data.

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