If you’ve ever applied for a job online, you’ve likely encountered an ATS. You may not realize it, but ATS has become a vital tool for recruiters and companies worldwide.

But what is an ATS, and why has it changed the modern job market so dramatically?

In this article, we’ll break down everything you need to know about ATS into eight essential points. You’ll learn how they help companies sort through resumes. More importantly, you’ll learn how ATS affect your application, and the steps you need to take to create an ATS-friendly resume.

1. What is an ATS?

The hiring process can be a time-consuming and frustrating experience for employers as well as job seekers. To streamline the process, many companies have started using applicant tracking systems (ATS).

An ATS is a computer software program that manages the hiring process. It does this by collecting and sorting thousands of resumes. 

Hiring managers can then screen candidates using the ATS, as well as track their progress through the hiring process. By digitizing the hiring process in this way, an ATS saves employers time and money. 

2. How applicant tracking systems work

There are 4 basic steps to how an applicant tracking system works:

  1. A job requisition enters into the ATS. This requisition includes information about the position, such as the job title, desired skills, and required experience.
  2. The ATS then uses this information to create a profile for the ideal candidate.
  3. As applicants submit their resumes, the ATS parses, sorts, and ranks them based on how well they match the profile.
  4. Hiring managers then quickly identify the most qualified candidates and move them forward in the hiring process. 

What’s especially important to understand is that recruiters often filter resumes by searching for key skills and job titles.

Recruiters often filter resumes by searching for key skills and job titles.”

For example, if a recruiter is hiring for an Administrative Assistant position and there are 500 resumes, their first step will probably be to search for “Administrative Assistant.” This isolates candidates that have done the exact job before. 

Anyone that doesn’t have that exact term in their resume is out of luck!

A search can contain multiple terms. For example, recruiters might perform a complex search that contains a combination of job titles and skills: Administrative Assistant AND data entry AND payroll…

This means that if you can predict the resume keywords that recruiters will use in their search, you’ll greatly increase your chances of moving on in the hiring process. But you don’t have to guess which keywords to use. All you have to do is analyze the job description to find them. 

Jobscan’s resume scanner automates this process by using AI technology to analyze your resume against the job description. It then provides you with a score that shows how well your resume matches the job description.

It also tells you exactly how to increase your score by adding those resume skills and keywords that are missing from your resume. Here’s an example of a report produced by the resume scanner:

A section of Jobscan's match report showing the resume score and missing hard skills.

By adding the highlighted keywords to your resume you’ll increase your score. The higher your score the more likely a hiring manager will find your resume and invite you for an interview. You can try the resume scanner for free here.

3. What’s the difference between an ATS and a CRM?

When it comes to recruiting software, there are two main types of systems: 

  • Applicant Tracking Systems (ATS)
  • Candidate Relationship Management (CRM) Systems 

Let’s quickly look at each system.

ATS software is typically used during the hiring process, and includes features such as resume parsing, candidate screening, and assessment tools. The downside to ATS software is that it only tracks job candidates that have already applied to your company. 

Top employers hire for several jobs at a time and receive hundreds of resumes for any given opening. Because applying for a job online is easier than ever, many of these applicants are unqualified and figured “it was worth a try.”

CRM systems, on the other hand, are used during the recruitment process to target potential candidates who haven’t yet applied to your company. CRM features include email marketing, scheduling, and communication tools to build relationships with possible candidates.

Whereas ATS only give you data that candidates input themselves, CRMs allow you to input information that you discover about prospective talent. In other words, ATS are more reactive, while CRMs are more proactive. 

You don’t necessarily have to choose between the two systems. Many companies use both!

4. Key features of an applicant tracking system

Applicant tracking systems make it easy for people to apply for a position on any device, without having to log in. This means that companies benefit from a larger pool of applicants.

Because there are so many applicants, companies use ATS software to automatically surface and highlight top candidates. Here’s an example of what the ATS looks like to the hiring manager:

Screenshot of an ATS.

Some other key features of ATS software include:

  • Resume parsing – This is the process of extracting data from resumes, such as contact information, work history, educational background, and skills
  • Advanced search – This enables you to filter applications by specific keywords, job titles, skills, experience, education, and more. 
  • Candidate sourcing – This allows you to actively search for, identify, and reach out to potential candidates for open positions.
  • Multi-channel candidate sourcing – This lets you search for potential candidates using multiple channels, including job boards, social media, and employee referrals.
  • In-built CRM software – Some ATS also feature CRM software to cover all your needs in one platform. 
  • Email templates –  Most ATS offer email templates to ensure that all your correspondence with candidates is consistent and professional. 
  • Advanced analytics and reporting –  This allows you to generate detailed reports on job seekers, hiring trends, and other data. 
  • Various integrations – This means the ATS can connect with different types of software, such as email marketing software, accounting software, and CRM systems.
  • Ability to schedule interviews – By automating interviews, you won’t have to waste time rescheduling, sending out reminders, or coordinating multiple calendars.
  • Real-time collaboration -This allows people from different parts of the organization to get involved in the sourcing, screening, and decision-making regarding new hires.
  • Automation based on certain events and conditions – This means your ATS will only be triggered to do something if a specific scenario occurs.

5. How accurate is ATS software?

While it is true that ATS can save recruiters time and effort in the hiring process, the reality is that these systems are far from perfect

A study by Harvard Business Review revealed that 88 percent of recruiters felt that qualified candidates were ignored by an ATS because they “did not match the exact criteria established by the job description.” 

This suggests that ATS places too much emphasis on keywords and fails to take into account a candidate’s skills, experience, or qualifications. As a result, many qualified candidates are overlooked simply because their resumes don’t contain the right keywords!

Many qualified candidates are overlooked because their resumes don’t contain the right keywords.

However, you can take advantage of this situation by making sure your resume contains the exact keywords that employers are searching for. 

6. Who uses ATS?

Jobscan research found that over 97% of Fortune 500 companies use ATS while a Kelly OCG survey estimated that 66% of large companies and 35% of small organizations rely on recruitment software. And these numbers continue to grow.

If you’re applying to a large organization, you’ll most likely face an ATS. 

If you’re applying through any online form, you’re applying through an ATS. 

Even job sites like Indeed and LinkedIn have their own built-in ATS.

It’s clear that ATS is here to stay. That’s why it’s so important to use the right keywords and format your resume in a way that makes it easy for ATS software to read.

7. Why employers use applicant tracking systems

When you think about it, today’s employers are faced with a daunting task when it comes to hiring new employees. This is because the internet has made it easy for job seekers to submit applications, so they submit a lot of them. Many of these applicants are unqualified and figured “it was worth a try.”

The result is that corporate recruiters now receive hundreds and sometimes even thousands of resumes for every job opening. This is why they need an ATS. These automated systems simplify and speed up the hiring process, saving businesses time and money.

ATS software simplifies and speeds up the hiring process, saving businesses time and money.

The top ATS feature many benefits, including:

  • Easier communication among hiring managers
  • Faster applicant screening 
  • Reduced time spent on repetitive tasks 
  • Improved net hiring score
  • Increased candidate engagement 
  • Better overview of applications 
  • Easy job posting
  • Improved cost per hire 
  • Improved quality of hire

As a result of these benefits, ATS have become an essential part of the modern recruiting process.

8. The future of applicant tracking systems

There’s no question that artificial intelligence (AI) is rapidly changing the world of recruitment. Already, AI-powered applicant tracking systems (ATS) are screening resumes, identifying potential candidates, and even conducting initial interviews. As AI continues to evolve, it’s likely that ATS software will become even more sophisticated. 

As AI continues to evolve, it’s likely that ATS software will become even more sophisticated.” 

In the future, these systems are expected to be more fully integrated with social media platforms like LinkedIn. This will enable them to identify both active and passive candidates who are a good match for open positions. 

Additionally, AI-powered chatbots could be used to answer questions and provide information about the application process. 

Ultimately, AI is poised to transform the recruiting landscape in a number of ways, making the process faster, easier, and more efficient for everyone involved.

What is an ATS optimized resume?

There is no universal trick to “beating” applicant tracking systems. Getting past an ATS and landing a job interview requires a well-written resume that is mindful of ATS algorithms as well as the people pushing the buttons.

Here’s our simplest advice for how to optimize your resume for an ATS:

  • Carefully tailor your resume to the job description every single time you apply.
  • Optimize for ATS search and ranking algorithms by matching your resume keywords to the job description.
  • Use both the long-form and acronym version of keywords (e.g. “Master of Business Administration (MBA)” or “Search Engine Optimization (SEO)”) for maximum searchability.
  • Use a chronological or hybrid resume format (avoid the functional resume format).
  • Use a traditional resume font like Helvetica, Garamond, or Georgia.
  • Don’t use headers or footers as the information might get lost or cause a parsing error.
  • Use standard resume section headings like “Work Experience” rather than being cute or clever (“Where I’ve Been”).

You can automate a lot of this process by using Jobscan’s resume scanner, which quickly tells you how to optimize your resume to get the best results. 

Our resume scanner includes Power Edit, an AI-powered resume editor that has six built-in ATS-friendly templates for you to choose from.

A screenshot of Jobscan's Power Edit showing the resume templates.

FAQs

What file types does ATS software recognize?

All ATS recognize Word documents. Some of them are also compatible with PDF files. 

How can you test a resume for applicant tracking systems?

The best way to see if your resume is ATS friendly is to use a resume scanner like Jobscan’s. Try it now for free

Do small companies use applicant tracking systems?

The adoption rate for small companies is low, but growing quickly. Last year, it was estimated that 35% of small organizations use an ATS. 

Are there specific keywords or formatting guidelines you should follow to ensure your resume gets past an ATS?

Yes, there are. When writing your resume, keep the following in mind:

  1. Keywords: Tailor your resume to include relevant keywords from the job description. ATS systems often scan resumes for keywords to determine their relevance to the position.
  2. Formatting: Use a resume format with standard margins. Stick to standard fonts like Arial or Times New Roman, and avoid complex graphics that may confuse the ATS.
  3. File type: Submit your resume in a universally readable format, such as a Microsoft Word document or a PDF file.
  4. Avoid special characters: Some ATS systems may have difficulty reading special characters, symbols, or non-standard fonts.

Read more: You Need to Avoid These ATS Resume Formatting Mistakes

Can applicant tracking systems reject your application without a human ever seeing it?

Applicant tracking systems themselves do not reject resumes. People do.

The purpose of an ATS is to identify resumes that best match the specific job requirements and qualifications. Resumes that do not meet the predetermined criteria set by the ATS may be ranked lower or filtered out.

However, the final decision on whether to reject or consider a candidate rests with the human decision-makers involved in the hiring process.

How can you tailor your resume and application to increase your chances of getting through an ATS?

When writing your resume, always try to mirror the job description. In other words, use the same language that the job description uses.

Are there any disadvantages or limitations of applicant tracking systems for job seekers?

One disadvantage is that candidates who haven’t tailored their resumes to include the right keywords may be overlooked, even if they possess the necessary skills and experience. In addition, resumes that have intricate designs, bright colors, fancy graphics, or non-standard fonts may not be parsed correctly by ATS, resulting in rejection.

What does ATS stand for and what is its function in the recruitment process?

ATS stands for Applicant Tracking System. This is software that is used by employers to manage job applications and to streamline the hiring process. It automates the process of posting job listings, receiving applications, sorting through candidates, and assisting in the selection of suitable candidates for employment.

What is ATS in human resources?

ATS is used in human resource departments to streamline the recruitment process. ATS stands for Applicant Tracking System, a software tool that helps in organizing, filtering, and managing large volumes of job applications.

What are some of the top ATS?

Some of the most popular ATS include Lever, Greenhouse, Taleo, and iCIMS.

Key takeaways

Let’s quickly sum up what we’ve learned:

  • Employers receive hundreds of resumes for every job opening.
  • An ATS is a computer software program that simplifies and speeds up the hiring process. 
  • Over 97% of Fortune 500 companies use ATS while 66% of large companies and 35% of small organizations rely on them.
  • As AI continues to evolve, it’s likely that ATS software will become even more sophisticated. 
  • Recruiters often filter resumes by searching for key skills and titles.
  • The problem with ATS is that qualified candidates are overlooked because their resumes don’t contain the right keywords.

If you want to make sure your resume gets past the ATS and into the hands of a recruiter, you need to optimize it. Jobscan’s resume scanner is an easy way to do this. 

Simply upload your resume and the scanner will show you where you need to improve your keywords so that your resume stands out from the rest.

Don’t let a computer decide your future – use Jobscan today and start getting more job interviews!

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Robert Henderson, CPRW, Resume Expert

Robert Henderson, CPRW, is a career advice writer and a resume expert at Jobscan.

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