HR Software.com

applicant tracking system (ATS)

By Eric St-Jean

What is an applicant tracking system (ATS)?

An applicant tracking system (ATS) is software that manages the recruiting and hiring process, including job postings and job applications. It organizes information about job seekers and makes it searchable. As its name implies, an ATS tracks candidates through the hiring process. It helps with interview scheduling, issues notifications and alerts, and sends automated emails to candidates and employees, such as recruiters and hiring managers.

But these systems are far more than organizers. An ATS is also used to cull applicants and recommend the top candidates. It might conduct a preliminary analysis of the applicants to find the best fits for a job. It might also look for keywords or use artificial intelligence (AI) algorithms that run a deeper analysis of each job applicant. The goal is to speed HR's review of job applications and resumes.

The term applicant tracking system is widely used, and an ATS is considered an important subset of a recruitment management system. The latter is an umbrella term for various technologies that deal with recruitment, including candidate relationship management (CRM) systems. Candidates who are in the ATS but not selected for an immediate job might be considered part of the talent pipeline and available for future opportunities. The CRM system maintains a connection with those prospects.

How the applicant tracking system process works

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

The following steps are typical of a recruitment process:

1. The job requisition is created and, if necessary, approved in the system.
2. The job is posted in one or more locations, including internally for employees, on the organization's website and on external job boards.
3. Candidates apply for the position on the organization's website or directly on the job board if it provides 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. The ATS might parse resumes and rank new applications as they are submitted.
5. 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 take place with the recruiter, hiring manager and others as required. Notes can be entered into the ATS following each interview for future reference.
7. When the preferred candidate is identified, the recruiter will typically use the ATS to send an offer to the candidate.
8. If the candidate accepts the offer, they are "hired" into the HR system. Next, the onboarding functions of the ATS or HR system are made available to the newly hired employee, where they can read and digitally sign policies, complete online forms and learn more about the organization.

Importance of an ATS in recruitment and hiring

Using an ATS is important in many ways, even for small companies. First, candidates have come to expect companies to provide a positive candidate experience and user-friendly application process, which most applicant tracking systems 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.

Benefits of applicant tracking systems

An ATS is designed to organize and speed up the hiring process by providing the following capabilities and benefits:

• It lets organizations reuse job descriptions for multiple positions, which can save time and reduce the effort required to post a job.
• It 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.
• It maintains a database of new applicants and people who could be prospects for future openings.
• It aggregates information about candidates, including any communications and jobs they've applied for in the past, to create a single view and profile of each candidate.
• It might also help sort and rank candidates by, for example, conducting an initial scan to select those candidates who best meet the job qualifications.
• It might also be set up to automate responses, send out interview reminders and alert people in the database to new job openings.

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. But many ATSes have other features and benefits that might not be as obvious.

For example, an ATS can be used to encourage people to apply. 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.

An ATS also enables collaboration by allowing anyone involved in the hiring process to stay abreast of the progress in filling a job opening and contribute to the candidate selection discussion.

An ATS 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, the ATS could send the applicant a series of questions to help recruiters learn more about the candidate.

ATS products that use these keyword-based screening methods are starting to see competition from systems that use machine learning approaches and natural language processing (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.

Another goal of these ATS technologies is to reduce bias, unconscious or otherwise, in recruiting and hiring. For example, machine learning 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.

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.

Choosing an ATS vendor

The ATS market is competitive and crowded, and there are at least 100 ATS vendors. Fortune Business Insights said the global market in talent management software, which includes ATSes, reached $9 billion in 2023 and is projected to grow to $25.4 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, there are two types of vendors to consider:

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

Popular applicant tracking systems

Prominent products from the specialized ATS vendors include the following, based on research by Gartner, G2 and others:

• ICIMS. A comprehensive system that has many of the bells and whistles you'd expect from one of the top vendors.
• Jobvite. A well-rounded system with onboarding functionality to simplify the new hire process.
• Taleo. Acquired by Oracle in 2012, Taleo is a popular system used by companies of all sizes.
• Lever. An easy-to-use ATS with candidate relationship management features built in.
• VidCruiter. A platform with video features to facilitate video interviews, candidate video submissions and virtual events.
• ClearCompany. An ATS that includes onboarding and has numerous AI features, which the vendor continues to expand.

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 could employ tricks such as using colored paper to make their resumes stand out. Today, there are new tricks to try to beat the system and increase the likelihood of a successful application, including the following:

• Tailor your resume to the job description. It takes more time than using one resume for every job you apply to, but if the company is using an ATS that ranks resumes based on keywords, you have a better chance of ranking high if the terminology in your resume matches what the company requires.
• Avoid stretching the truth and including keywords where you have no experience. Your resume might get to the top of the pile, but the recruiter will quickly spot the embellishment.
• Include both the acronym and long form when using a phrase for the first time in a resume. Often, recruiters are not specialists in your field and might not be well versed in its terminology.
• Avoid using images to share information about yourself. If the organization is using resume parsing, the information will not be read, leaving your ATS profile with missing data.
• Ensure your resume is saved as readable text. The easiest way to do this is to submit a Microsoft Word-compatible document or PDF file.
• Use standard section headers that a resume parser will recognize. For example, use "Education" as a header to list the programs you've completed.
• Use a simple font, such as Arial or Times New Roman, rather than one that looks artistic but the resume parser might not be able to read properly.
• Watch the junk mailbox in your email software to ensure you don't miss an email, since the correspondence will often be automated and can look like junk mail.
• Ensure your resume looks professional by correcting spelling and grammar, using headings, and ensuring that sections line up correctly.
• Include a good summary at the top of the resume, highlighting what you bring to the organization and not what you want from it. This will likely be the first thing a recruiter looks at if they open your resume.
• If you are asked to answer questions when submitting your resume, keep in mind that some of them might be used as knockout questions. This means if you don't provide the answers the recruiters want, you will be automatically rejected. Remember that they can see your answers, and if you stretch the truth too much to get through the questions, you might have to explain in an interview why you gave those answers.
• The ATS will track all the jobs at the employer that you've applied for in the past. Therefore, it's better to focus on jobs you are qualified to perform. For example, if you are applying for both individual contributor and director-level jobs, recruiters might find it difficult to gauge your level of experience.
• Apply online even if a friend has offered to submit your resume on your behalf. Most recruiters want all the resumes to be in the system so that they're easier to track. Also, if you don't submit the resume yourself, the recruiter might enter it on your behalf and skip over information you'd like to include.
• Don't be surprised if a supposedly open position was already 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 organizations' websites, even when candidates have been hired.
• Finally, remember your username and password so that you can log in to update your resume or profile or apply for another position.

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. Candidate relationship management systems were created to fill this gap.

The CRM helps recruiters manage data for past candidates, passive candidates and employees while keeping them at the forefront when it's time to fill new positions. The CRM also acts as a recruitment marketing tool for sending candidates communications, such as informing them of new positions or significant events like 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 CRM 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 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 come a long way 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.

Here 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 will enable the systems to perform more complex tasks, reducing the need for humans to find qualified candidates, write offer letters and 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 the 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 get better.
• Analytics integration. Many ATS applications allow superusers 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 fill the gap, but the process is cumbersome and often requires manually merging data.