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What Is An Applicant Tracking System (ATS) and How Does It Work?

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What Is An Applicant Tracking System (ATS) and How Does It Work?

What Is An Applicant Tracking System (ATS) and How Does It Work?

Managing the recruitment process is complex, especially when you receive many applications for several different job openings.

If your recruiting team is trying to monitor a high influx of applications and guide numerous candidates through screening, scheduling interviews, and other stages of the hiring process, some people are bound to get lost in the shuffle. 

Especially for small business owners, this can be overwhelming to keep track of by hand. Luckily, there are software systems to help. 

An applicant tracking system (ATS) is a software application that automates and streamlines the recruitment and hiring processes. It can help employers manage job postings, receive and parse resumes, screen and filter candidates, schedule interviews, and track the overall candidate lifecycle.

Using an ATS can help ensure that all applicants are treated fairly during the hiring process and that oversight doesn’t prevent anyone from getting an equal shot. 

Overview of Applicant Tracking System

Applicant tracking systems, or ATS, are often used in tandem with recruiting and hiring software. ATS software can make every aspect of recruiting easier for your HR department, from creating a job description to keeping track of their progress through the many steps of recruitment and hiring. 

If using an ATS, ensure it is appropriately configured to screen resumes based on your organization’s criteria for the role. Then, the program can filter resumes using that predetermined criteria, saving you the time of perusing each resume in search of the desired qualifications. 

Applicant tracking software makes it easy to keep resumes on hand in case a new position opens up that is perfect for a previous candidate.

You can also use these programs to facilitate conversations with potential candidates over social media. 

Beyond its time-saving capabilities, ATS software can help ensure legal compliance throughout the hiring process and keep track of recruiting metrics that will help you analyze and improve your hiring process overall. 

For organizations looking to improve their diversity hiring, ATS software can also collect data and generate reports on applicant demographics, allowing for a more diverse applicant pool. 

ATS software can standardize the evaluation process by applying consistent criteria to all applicants, decreasing bias.

How Does an Applicant Tracking System Work?

One of the most important features of an ATS is its ability to “track” applicants as they move throughout the hiring process. Rather than trying to monitor lots of different applicants who may be in different hiring stages, an ATS can organize the process and help improve the applicant experience. 

Application Submission Phase

The beginning of the hiring process usually involves creating a job description, and an ATS becomes useful immediately. 

An ATS allows recruiters to create and publish a job description on various platforms, including the company website and various job boards. Candidates can then submit their applications electronically through the ATS interface.

After a candidate submits a resume, the ATS can parse and extract relevant information, such as contact details, education, work experience, and relevant skills. This data is organized and stored in the ATS’s database for easy retrieval and analysis.

The ATS stores candidate profiles and resumes in a centralized database, making it easy for recruiters to search, filter, and manage applicant information.

Resume Screening and Filtering

Once you’ve received some applications, you’ll need an efficient way to look through them. 

An ATS can use predefined criteria, including keywords and qualifications, to match candidate resumes with specific job requirements. Then, resumes are assigned a match score or ranking based on the relevance of the keywords and criteria, making it easy for recruiters to order them by their experience or other relevancy.

Recruiters can set specific screening criteria, such as education, experience level, and desired skills, to narrow the candidate pool and adjust these filters as needed. The ATS will filter resumes based on these criteria, allowing recruiters to focus on the most qualified applicants.

If you choose to use this feature, the ATS can also automatically reject candidates who do not meet the minimum requirements, saving you the time of reading underqualified applications.

Though automating this process can be useful, be careful not to use overly restrictive features, as this might cause you to miss out on great candidates. 

Interview and Assessment Management

Once you’ve screened applications, the next step is scheduling interviews. 

The ATS provides tools for recruiters to easily schedule interviews, send automated interview invitations and reminders to candidates, and manage interview slots. Some ATSs may even integrate with calendar systems to avoid scheduling conflicts.

Recruiters can use the ATS to track the progress of each candidate throughout the hiring process. They can record interview feedback, notes, and evaluations, facilitating collaboration among the hiring team.

The ATS may include communication features, such as email templates and messaging systems, enabling recruiters to communicate with candidates, share updates, and request additional information.

Growing Your Talent Pool

Strategic recruiting entails building and maintaining relationships with candidates, as they might be a perfect fit for a future role. 

An ATS makes it easier for recruiters to build talent pipelines by capturing and categorizing candidate information, which can help them maintain relationships with candidates and quickly refresh themselves on their professional histories.

Recruiters can use the ATS to send personalized communications, including job alerts, newsletters, and updates, to keep candidates engaged and interested in the organization. This communication helps nurture relationships with potential candidates for future job openings.

Some ATSs can also integrate with email marketing and communication platforms, allowing recruiters to send targeted campaigns and track candidate engagement. 

Reporting and Analytics

To continue improving your hiring process, it’s essential to monitor your successes and areas for improvement with quantifiable data. This is yet another area where an ATS can come alongside your HR department to make their jobs easier and provide better results. 

An ATS can generate reports and analytics on recruitment metrics, such as time-to-fill, source of hire, applicant demographics, and diversity statistics, helping recruiters measure the effectiveness of their recruitment strategies and make data-driven decisions to improve their future efforts. 

In light of this data, recruiters can assess the success of different sourcing channels, job boards, or recruitment campaigns based on the data provided by the ATS.

Beyond hiring statistics, ATSs can help organizations ensure compliance with hiring regulations, such as equal employment opportunity (EEO) requirements. Recruiters can use these tools to self-check their practices, as well as to generate reports that demonstrate adherence to these regulations.

Benefits of an Applicant Tracking System

An Applicant Tracking System (ATS) offers numerous benefits for recruiters, hiring managers, and organizations involved in the recruitment process. Some of the key benefits of an ATS include:

1. Time and Cost Savings

An ATS automates and streamlines various time-consuming tasks, such as resume screening, candidate communication, interview scheduling, and data organization. When these tasks are done by hand, they can take a significant amount of time and are often prone to human error. 

Implementing applicant tracking software can quickly reduce manual effort, allowing recruiters to focus on more strategic aspects of talent acquisition

Moreover, by improving the efficiency of the hiring process, an ATS helps save costs associated with traditional methods like manual paperwork and job advertising.

2. Improved Candidate Quality and Fit

ATSs enable recruiters to set specific criteria and preferences for job openings, including required skills, experience, and qualifications. 

The system automatically screens and filters resumes based on these criteria, ensuring that only qualified candidates move forward in the recruitment process. This leads to better candidate quality and increases the likelihood of finding the right fit for the role.

3. Streamlined Workflows and Collaboration

ATSs provide a centralized platform for managing the entire recruitment process and facilitate collaboration among hiring teams by allowing seamless sharing of candidate information, interview feedback, and other relevant communication. 

Recruiters can easily track candidate progress, exchange notes, and make informed decisions collectively, enhancing the overall efficiency and effectiveness of the recruitment workflow. 

4. Compliance with Hiring Regulations

ATSs help organizations ensure compliance with legal and regulatory requirements throughout the recruitment process. 

They can track and store candidate data securely, manage consent and privacy settings, and generate reports for auditing purposes. This ensures that recruitment practices align with equal opportunity laws, data protection regulations, and other relevant guidelines.

5. Data-Driven Decision Making

ATSs provide valuable insights and analytics on recruitment metrics and key performance indicators. Recruiters can track data such as time-to-hire, source of hire, candidate demographics, and conversion rates. 

These analytics help assess recruitment strategies’ effectiveness, identify bottlenecks, optimize processes, and make data-driven decisions to improve overall recruitment outcomes.

6. Enhanced Candidate Experience

An ATS improves the candidate experience by providing a streamlined application process. Candidates can easily search and apply for jobs, upload resumes, and track their application status. 

Additionally, communication tools within the ATS enable timely and personalized communication with candidates, keeping them engaged and informed throughout the recruitment journey.

7. Scalability and Flexibility

ATSs are designed to cater to organizations of various sizes and recruitment needs. They offer scalability, allowing companies to handle multiple job openings and a large volume of applicants efficiently. 

Additionally, many ATSs provide customization options, enabling organizations to adapt the system to their unique recruitment processes and workflows.

Limitations and Considerations

Though using an applicant tracking system can make many aspects of recruitment easier, it also comes with a few limitations that business owners should consider. 

1. Initial Setup and Configuration

Because applicant tracking software can assist several different aspects of the recruiting process, it naturally will take some time and effort to set up and configure the system according to the organization’s specific needs and workflows. 

This may involve migrating data, integrating with other systems, and training the recruiting team on how to use the ATS effectively. Initial setup can be a complex process, requiring technical expertise and potentially external support.

2. Potential Biases in Automated Screening

ATSs use algorithms to screen and filter resumes based on predefined criteria and keywords. Biases may occur due to keyword selection, formatting preferences, or inherent biases in historical data. Regular calibration and review of the ATS ensure fair candidate evaluation.

3. Integration with Other HR Systems

While many ATSs offer integrations with other HR systems, such as HRIS or payroll software, seamless integration may not always be straightforward. 

Compatibility issues, data mapping challenges, and technical limitations can arise when integrating the ATS with existing HR infrastructure. It’s essential to consider the compatibility and integration capabilities of an ATS with the organization’s existing systems.

4. Security and Data Privacy Concerns

ATSs store a vast amount of sensitive candidate data, including resumes, contact information, and employment history, so ensuring the security and privacy of this data is of utmost importance. 

Organizations should select an ATS provider that implements robust security measures, such as encryption, access controls, and regular vulnerability assessments. It’s also crucial to comply with GDPR or CCPA and obtain candidate data storage and user consent.

5. User Adoption and Training

ATSs vary in user-friendliness, but most modern systems strive to provide intuitive interfaces and smooth experiences for both recruiters and candidates. User training, demos, and ongoing support from the ATS vendor can help users navigate and leverage the system effectively.

Still, introducing a new ATS requires user adoption and training for the recruiting team, and some recruiters may initially face a learning curve in understanding and effectively utilizing the ATS’s features and functionalities. 

Adequate training and ongoing support from the ATS vendor are essential to maximize the system’s potential and ensure smooth user adoption.

6. Over-Reliance on Automation

While automation is a significant benefit of ATSs, there is a risk of over-reliance on technology at the expense of human judgment. 

The ATS’s algorithms and screening processes are based on predefined criteria, which may not always capture candidates’ intangible qualities or potential. Recruiters should strike a balance between automation and human involvement to make informed decisions and avoid missing out on promising candidates.

7. Inadequate Customization for Unique Processes

While many ATSs offer customization options, there may still be limitations in adapting the system to specific recruitment processes or workflows. 

Some organizations with highly unique or complex recruitment processes may find it challenging to customize the ATS to their exact requirements fully. It’s essential to evaluate the level of customization offered by the ATS and determine if it aligns with the organization’s specific needs.


Recruiting is one of the most important aspects of maintaining a successful business, but managing its multiple stages can be complicated. Luckily, an applicant tracking system brings speed, efficiency, and organization to this process and improves your hiring process. 

By helping hiring managers track applicants throughout all stages of the hiring process, an ATS can make it easier for them to connect with passive and active candidates, screen their resumes, schedule interviews, and communicate with promising candidates about next steps. 

Applicant Tracking System FAQs

How does an ATS benefit recruiters and hiring managers?

ATSs offer several benefits, including time and cost savings, improved candidate quality, streamlined workflows, better collaboration among hiring teams, compliance with hiring regulations, and access to data-driven insights for informed decision-making.

Can an ATS integrate with other HR systems?

Many ATSs offer integrations with other HR systems such as HRIS (Human Resource Information System), payroll software, background check services, and video interviewing platforms. Integration ensures a seamless flow of data and enhances the efficiency of the recruitment process.

How do ATSs handle resume screening and filtering?

ATSs use algorithms to analyze resumes and match them with job requirements. They employ keyword-based matching, allowing recruiters to define specific keywords and phrases relevant to the job. Resumes are then ranked based on match scores, helping recruiters identify the most suitable candidates.

Are there any potential biases in ATSs?

ATSs can inadvertently introduce biases if not correctly configured and monitored. Biases can occur due to keyword selection, formatting preferences, or other factors. It’s important to regularly review and calibrate the ATS to minimize bias and ensure fair candidate evaluation.

Do ATSs have reporting and analytics capabilities?

Yes, ATSs provide reporting and analytics features that allow recruiters to track recruitment metrics, such as time-to-hire, source of hire, and applicant demographics. These insights help measure the effectiveness of recruitment strategies and make data-driven decisions.

Are there any security and data privacy concerns with ATSs?

Data security and privacy are crucial considerations for ATS implementation. Choosing an ATS provider that adheres to industry-standard security measures, encrypts data, and complies with data protection regulations, such as GDPR (General Data Protection Regulation) or CCPA (California Consumer Privacy Act).

Can an ATS be customized to match specific recruitment processes?

Many ATSs offer customization options to align with an organization’s unique recruitment workflows and requirements. Recruiters can configure the ATS to reflect their desired stages, candidate evaluation criteria, interview processes, and communication templates.

Is an ATS suitable for small businesses or startups?

Yes! ATSs are not limited to large organizations. Small businesses can benefit from ATSs by automating recruitment processes, improving candidate management, and maintaining a centralized database of applicants. There are ATS solutions that cater to smaller companies’ needs and budgets.