Understanding Applicant Tracking Systems: A Comprehensive Overview

Most organizations today, including more than 97% of Fortune 500 companies, rely on an applicant tracking system (ATS) to facilitate their hiring processes.

 

If you’re unfamiliar with what an ATS entails, you’re not alone. Many job seekers are unaware that their resumes could be screened out by a computer algorithm without ever reaching a hiring manager, even if they possess the necessary qualifications for the job. 

 

In this comprehensive guide, we will delve into the definition of an ATS, its functionalities, and how you can craft an ATS-friendly resume to enhance your chances of securing more job interviews. 

What is an applicant tracking system?

An applicant tracking system (ATS) is software utilized by HR departments to manage the influx of job applications they receive for various job openings. 

 

The ATS performs the following key functions: 

• Stores crucial job candidate details such as resumes, cover letters, references, and additional data. 

• Tracks the progress of job candidates throughout the hiring process. 

• Automates labor-intensive tasks like applicant screening, resume parsing, interview scheduling, and communication. 

 

For job seekers, understanding that an ATS allows employers to filter resumes based on specific keywords is paramount. Resumes that align with the required keywords are then presented to hiring managers for manual review. 

 

Therefore, it is essential to customize each resume with relevant keywords and adhere to a clear, ATS-friendly format. By doing so, you can increase the likelihood of your application passing through the initial screening phase and ultimately being reviewed by a hiring manager, potentially leading to an interview invitation. 

 

How do applicant tracking systems operate?

Upon submitting your application, it typically enters an ATS database. However, you may encounter knockout questions beforehand. 

 

Knockout questions can be presented as checkboxes or short answer queries. If your responses to any of these questions are deemed unsatisfactory, your resume might be flagged or automatically rejected by the ATS. 

 

Examples of knockout questions include: 

• Are you open to relocation? 

• Are you willing to travel for this role? 

• Are you available for full-time work? 

• Do you possess X years of experience? 

• Do you hold a [specific degree or certification] required for this position? 

 

Following the knockout questions, the ATS scans and parses your resume. This process involves extracting and organizing your information into a structured format. 

 

The data is then stored in the ATS tracking database. Recruiters can easily search this database to identify suitable job candidates. 

 

How do hiring managers utilize ATS to discover candidates?

Hiring managers utilize keywords to locate suitable job candidates within the ATS database. Keywords can range from single words to phrases, often representing job titles or skills. 

 

For instance, if a hiring manager is seeking a dental assistant, they might input the keyword “dental assistant” into the ATS search bar. 

 

Additionally, hiring managers can combine multiple terms. For example, they may search for “dental assistant” along with “X-ray certification” and “patient care.” 

 

Resumes containing all three specified keywords will be visible to the hiring manager, while those lacking these keywords will remain concealed within the ATS database. 

 

How to structure your resume for optimal ATS compatibility?

It’s crucial to format your resume in a way that enables the ATS to read and interpret it accurately. 

 

While some individuals may be inclined to incorporate elaborate design elements in their resumes for visual appeal, this practice can hinder rather than help. Such design elements may confuse certain ATS systems and impede hiring managers from locating your resume. 

 

To ensure your resume is fully ATS-friendly, adhere to these formatting recommendations: 

• Utilize clear language consistently throughout your resume. 

• Employ conventional resume section headers such as “Work Experience” and “Education.” Avoid unconventional headers like “My Professional Journey.” 

• Opt for a common, easily readable font like Arial, Helvetica, or Times New Roman. 

• Maintain one-inch margins on all sides of your resume to prevent overcrowding. 

• Avoid incorporating intricate graphics or design features that could perplex the ATS. 

• Refrain from using special characters or symbols. 

• Submit your resume in the recommended file format, typically .doc, .docx, or PDF. 

• Consider leveraging a resume builder or utilizing ATS-friendly resume templates to craft a resume that is easily interpretable by ATS systems. 

• Lastly, meticulously proofread every resume before submission. A single minor error could lead to your resume being overlooked. 

 

The future of applicant tracking systems

As technology continues to evolve, so does the landscape of recruitment and hiring. Here’s a glimpse of the potential future of ATS: 

Integration with artificial intelligence (AI)

Increasingly, ATS will use artificial intelligence (AI) to gain a deeper understanding of an applicant’s career journey. It won’t just be about keywords. 

 

AI will also be able to predict a candidate’s potential success in a role based on their previous work experience. 

 

Furthermore, AI’s ability to disregard details like gender, age, or ethnicity can pave the way for a more equitable hiring process. 

Video resumes and cover letters

The rise of video content in the digital age suggests that ATS might soon be equipped to parse video resumes or cover letters. 

ATS might also integrate with virtual and augmented reality, revolutionizing how applicants showcase their skills. 

Enhanced candidate experience

The future of ATS is not solely focused on employers; it also involves enhancing the application process for job seekers. 

FAQs

How do applicant tracking systems operate?

Applicant tracking systems (ATS) are software tools employed by employers to streamline the hiring process. They automatically scan and categorize job applications based on specific criteria like keywords, skills, and experience. This aids recruiters and hiring managers in efficiently identifying the most suitable candidates for a position. 

Which companies utilize ATS?

Businesses of all sizes and across various industries use ATS to streamline their recruitment processes. Primarily, large corporations, recruitment agencies, and organizations with frequent hiring needs leverage ATS to manage high volumes of applications. Nevertheless, even small to medium-sized businesses are increasingly adopting ATS due to the availability of cost-effective and scalable software solutions aimed at enhancing their hiring efficiency. 

How do ATS benefit HR managers?

ATS support HR managers by automating and organizing the recruitment process. They sift through and rank job applications based on specific criteria, ensuring that only the most relevant candidates are considered. Furthermore, ATS provide a centralized platform for job postings, candidate tracking, and communication, thereby enhancing the efficiency and streamlining the hiring process for HR professionals. 

Do applicant tracking systems parse PDF files?

Applicant tracking systems generally possess the capability to read and interpret PDF files. However, the readability may vary depending on the system and the formatting of the PDF. To ensure accurate interpretation, it is recommended that job seekers use simple, non-graphical PDF formats for their resumes. 

What constitutes an ATS-friendly resume?

An ATS-friendly resume is crafted to be easily read and understood by applicant tracking systems. Such resumes utilize straightforward formatting, eschew complex graphics or tables, and incorporate relevant keywords aligned with the job description. This approach helps ensure that the resume is not inadvertently filtered out and increases the likelihood of it being reviewed by a human recruiter. 

Why are ATS so vital in the recruitment process?

ATS systems play a crucial role in alleviating the workload of recruiters and hiring managers, especially in an era where job seekers can apply for positions quickly and easily online. Major job board sites like Indeed and LinkedIn facilitate one-click application submissions using a saved resume. 

While not flawless, applicant tracking systems serve as an effective tool for recruiters to effectively identify top candidates. 

What functions can an ATS perform?

ATS extend beyond basic applicant tracking to include features such as communication tools, interview scheduling capabilities, and onboarding functionalities. Furthermore, ATS save resumes for future reference, enabling recruiters and hiring managers to search the system later for suitable candidates for new positions. If you have experienced being contacted by a company months after applying, an ATS likely played a role in the outreach. 

How to bypass the applicant tracking system? 

Follow these steps to ensure your resume gets past the applicant tracking system: 

1. Customize your resume for the specific job you’re applying for. 

1. Incorporate key words and phrases from the job description into your resume. 

1. Include both the full form and acronyms of important keywords. 

1. Choose appropriate formatting and font styles. 

1. Use an online resume checker to ensure your resume is compatible and easily readable by an ATS. 

Do all recruiters use ATS systems?

About 75 percent of recruiters utilize recruiting or applicant tracking software. Additionally, approximately 98 percent of Fortune 500 companies and around 60 percent of large corporations make use of ATS. 

What sets CRM apart from ATS?

An ATS automates the recruitment process and acts as a repository for job applicants. In contrast, CRM (Customer Relationship Management) serves as a platform where HR professionals can engage with both passive and active candidates, including those who have been previous applicants. 

Are ATS systems commonly used by small companies?

Around 35 percent of small businesses leverage ATS for their recruitment needs. 

Which resume format is most compatible with ATS?

The most ATS-friendly resume formats are reverse-chronological and hybrid. It’s generally advised to avoid using a functional resume format. 

In summary, an ATS is an invaluable tool for recruiters to automate and enhance the efficiency of the hiring process.
Understanding how the ATS operates and adapting your resume appropriately can significantly improve your chances of success in landing your desired job.