Applicant Tracking System:
Definition, Uses, Comparison & Implementation

An Applicant Tracking System (ATS) is a software application for human resources that helps organizations manage recruitment and hiring tasks digitally by serving as the central database for job and applicant information. The system automates and manages the workflows associated with the recruitment process, allowing hiring managers and recruiters to cut through the volume of résumés received so they can focus their time on the most qualified applicants. An ATS collects applications and stores data about applicants, such as which source they came from, which role they applied to, and where they are in the application process.

The system supports the performance of common tasks such as creating job descriptions, posting jobs to career sites and job boards, résumé scanning, scheduling interviews, gathering feedback, performing background checks, and generating offer letters with electronic signatures. An ATS also manages the experience for job applicants, including searching for jobs, applying online, and checking the status of an application, as well as generating notifications to applicants.

Related terms: recruitment software, candidate relationship management (CRM), résumé parsing, hiring workflow

An ATS essentially emulates a human mind by automating some of the more time-consuming screening and organizational steps of the hiring process. The system works through several key processes that streamline recruitment from start to finish.

When candidates apply for a job, their résumés are uploaded to the applicant tracking system. The ATS then parses or extracts relevant information from the résumés, such as contact details, work experience, education, skills, and keywords. The applicant tracking system automatically screens and filters candidates based on predefined criteria set by the recruiter or hiring manager, which may include qualifications, experience, skills, and location.

The ATS allows recruiters to create job postings and distribute them across multiple job boards, career websites, social media platforms, and internal networks. This helps attract a larger pool of candidates. The system makes communication easy between recruiters and candidates through email templates, automated messages, and scheduling tools. Recruiters can send personalized messages, schedule interviews, and provide updates to candidates directly through the system.

The ATS provides a centralized database or dashboard where recruiters can view, organize, and manage candidate profiles and applications. They can track the status of candidates, move them through different stages of the hiring process, and collaborate with team members. Once candidates are in the system, recruiters can see their application when they check the requisition, using keyword searches or manual résumé reviews to evaluate applicants.

Companies use applicant tracking systems because automating processes like sourcing, organizing, and tracking candidates saves time and money. According to research, 75% of recruiters use some sort of ATS, and 98.4% of Fortune 500 companies relied on it in 2024.

An ATS accelerates the hiring process by moving from offline and paper-based processes to an automated digital process, streamlining recruitment and hiring tasks and freeing up time while ensuring fair and best-fit hiring practices are followed. This is especially true for larger organizations with more competitive jobs that might see hundreds or even thousands of applicants for a job posting.

There are 5 key benefits companies gain from using an ATS:

• More applicants: An ATS makes it easier for job seekers to search for jobs and apply online, increasing the overall number of applications
• Fast hiring cycles: Recruiters can quickly search the entire applicant pipeline, selecting candidates of interest and investing their time in higher value work such as screening interviews, references, and offers
• Greater collaboration with stakeholders: During the interview stage, hiring managers review and provide feedback on candidates within the ATS, with business rules configured to automate the progression of candidates through the screening and hiring stages
• Reduced cost-per-hire: Fortune 500 companies who use an applicant tracking system have seen their average cost-per-hire dropping to between $150 and $300, a saving of around $1,500 per candidate
• Improved candidate experience: Having a streamlined hiring process with excellent communication makes a candidate feel valued, increasing the likelihood that a candidate will re-apply to your company if a more suitable role becomes available

The best applicant tracking systems offer core functionalities that make them indispensable for modern HR teams, enabling them to efficiently source, screen, and hire the best candidates for their organizations.

There are 10 key features that define effective ATS platforms:

• Candidate Profile Extraction: The ability to automatically extract and parse relevant information from résumés, such as contact details, work experience, education, skills, and keywords
• Applicant Screening and Filtering: Tools to screen and filter candidates based on predefined criteria, such as qualifications, experience, skills, location, and other factors
• Job Advertisement and Sharing: Functionality to create job postings and distribute them across multiple job boards, career websites, social media platforms, and internal networks
• Candidate Communication: Tools for communication between recruiters and candidates, including email templates, automated messages, and scheduling tools for interviews and follow-ups
• Applicant Management: A centralized database or dashboard to view, organize, and manage candidate profiles and applications, track candidate status, and move candidates through different stages of the hiring process
• Interview Scheduling: Features for coordinating interview dates and times with candidates and hiring managers, streamlining the scheduling process, and avoiding conflicts
• Reporting and Analytics: Reporting and analytics capabilities to track and analyze recruitment metrics, such as time-to-fill, source effectiveness, candidate conversion rates, and diversity metrics
• Collaboration and Workflow Management: Tools for collaboration among recruiters and hiring managers, allowing them to share feedback, collaborate on candidate evaluations, and track progress through the hiring pipeline
• Compliance and Equal Opportunity: Features to ensure compliance with legal requirements and equal opportunity regulations, such as tracking EEOC data, managing documentation, and providing audit trails
• Customization and Integration: Options to customize the ATS to fit the organization's specific needs and workflows, as well as integration capabilities with other HR systems, such as HRIS, payroll, and onboarding platforms

Companies of all sizes and industries use applicant tracking systems to organize, search, and communicate with job applicants and manage their job application process. While previously the domain of larger Fortune 500 companies due to associated costs and infrastructure requirements, today smaller organizations can leverage the cost savings of software-as-a-service (SaaS) offerings in the cloud.

Applicant tracking system ATS is mostly used by HR professionals, recruiters, hiring managers, and other personnel involved in the recruitment and selection process. It acts as a centralized platform for managing candidate applications, streamlining hiring workflows, and making communication easy between stakeholders involved in the hiring process.

Recruiters are the most active users of an ATS. They use the system on a daily basis to manage job requisitions, post openings, review applicants, and manage the progression of candidates through the recruitment and hiring stages. Hiring managers use an ATS to participate in the recruitment process, with direct access to active job requisitions to review job descriptions, applicants, and résumés, and to see the status of each candidate. Job applicants use the ATS to search and apply for jobs, check an application status, and accept job offers.

The cost of applicant tracking systems varies widely depending on several factors, including the size of the organization, the complexity of the hiring process, the number of users, and the specific features and functionalities needed.

For small businesses or startups with basic needs, entry-level ATS solutions may start at around $50 to $100 per month. These plans usually offer essential features such as résumé parsing, candidate management, and basic reporting.

For mid-sized organizations with more advanced requirements, ATS pricing may range from $100 to $500 monthly. These plans often include additional features such as job posting and distribution, interview scheduling, customization options, and more robust reporting capabilities.

For large enterprises with complex hiring processes and high volumes of applicants, enterprise-level ATS solutions may cost anywhere from $500 to several thousand dollars per month. These plans usually offer advanced features like integration with other HR systems, customizable workflows, dedicated support, and comprehensive analytics.

Some ATS providers may also offer pricing based on the number of job postings, users, or candidates, while others may charge based on a per-employee basis. Many ATS providers also offer customizable packages and pricing options to accommodate different organizational requirements.

Résumé parsing is a feature that takes important information from submitted résumés and formats them the same way. This feature then categorizes all who applied based on who best fits the job description, showing the recruiter all the top candidates first. If done manually, résumé screening can be a tedious process, but using an ATS's résumé parsing feature makes the process of finding capable applicants much easier.

The ATS parses or extracts relevant information from the résumés, such as contact details, work experience, education, skills, and keywords. Recent changes include the use of artificial intelligence (AI) tools and natural language processing to facilitate guided semantic search capabilities offered through cloud-based platforms that allow companies to score and sort résumés with better alignment to the job requirements and descriptions.

An ATS implementation should be considered by organizations that are growing quickly and have ambitious recruitment objectives that correlate with the overall business strategy. Additional requirements could include targeting a specialized skill set or role that is in high demand, supporting mass recruiting efforts, or resolving significant inefficiencies within HR where a centralized data model and automated workflows would save time and money.

There are 6 inefficiencies that signal the need for an ATS:

• Hiring efforts are tracked on a spreadsheet
• The same job posting must be submitted manually to multiple job boards
• Time is spent reviewing a large volume of irrelevant applications
• Feedback and decisions from the hiring team are difficult to obtain
• Internal resources are not available to build, maintain, or improve an existing career site
• Measuring the value of recruitment is difficult and inconsistent

Candidates can optimize their résumés for ATS by employing several strategies that increase the likelihood of their application passing through automated screening systems. The practice of application filtering has caused many candidates to adopt résumé optimization techniques similar to those used in search engine optimization when creating and formatting their résumés.

There are 3 primary résumé optimization techniques:

• Tailor your résumé to the job description: Even though it takes more time, tailoring your résumé to a job listing with relevant keywords before submitting your application can help increase the chance of it being seen by recruiters. Include education requirements, skills, and specific software that a job posting mentions, and spell out industry acronyms, no matter how common they are
• Avoid using images: Although sharing information on résumés through images is common practice, it may not be the best way to get hired if an organization is using a résumé parser. An ATS will likely not read this information and leave your profile with missing data
• Use a simple font: Using fonts such as Times New Roman or Arial instead of more artistic-looking fonts helps ensure that an ATS résumé parser will be able to read your résumé

An Applicant Tracking System is often compared to 2 related concepts in the recruitment technology landscape:

ATS vs. Candidate Relationship Management (CRM)

An ATS is a software application for managing recruitment and hiring tasks digitally, serving as the central database for job and applicant information. In contrast, a CRM system is used to attract talent and build relationships with applicants that have transitioned to candidate status. A lot of times, an ATS is paired up with a CRM system, which helps with auto-emails, social media posts, and candidate engagement. While an ATS is sufficient for processing active candidates, these systems do not provide the capabilities required for engaging and nurturing passive talent. Recruiting software that includes ATS and CRM functionality provides the greatest flexibility and efficiency across the entire applicant-to-candidate journey.

ATS vs. Human Resource Information System (HRIS)

An ATS specifically focuses on recruitment tracking purposes and the hiring process, while an HRIS is a broader system that manages all employee data and HR processes across the organization. On the enterprise level, an ATS may be offered as a module or functional addition to a human resources suite or human resource information system (HRIS). The principal function of an ATS is to provide a central location and database for a company's recruitment efforts, whereas an HRIS manages ongoing employee records, payroll, benefits, and performance management.