CHAPTER 4

APPLICATION TRACKING
SYSTEM (ATS)

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.

An Applicant Tracking System is a software application that automates

and streamlines the recruitment and hiring process for organizations. It
serves as a centralized hub for managing job applications and facilitates
the entire hiring workflow

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.

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.

Key Points

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.
Resume scanners automate 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:

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.

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

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!

1. Applicant Tracking Systems (ATS):

Functionality:

 Job Posting and Application Management: ATS systems enable

recruiters to post job openings and manage the entire application
process in one centralized system.
  Resume Parsing: ATS automatically extracts and organizes
relevant information from resumes, making it easier to screen and
evaluate candidates.

 Candidate Tracking: Recruiters can track candidates throughout

the hiring process, from initial application to final selection, using
predefined workflows.

 Collaboration Tools: ATS systems facilitate communication and

collaboration among team members involved in the hiring process.

Key Benefits:

 Efficiently manage high volumes of job applications.

 Standardize and automate the screening process.

 Centralize candidate data for easy tracking and analysis.

 Streamline communication and collaboration within the hiring team.

Common Features:

 Keyword matching, interview scheduling, automated notifications,

and reporting and analytics.

2. Candidate Relationship Management (CRM) Systems:

Functionality:

 Building and Managing Talent Pools: CRM systems focus on

building and maintaining relationships with potential candidates,
creating talent pools for future hiring needs.
  Communication and Engagement: CRM tools facilitate ongoing
communication with candidates, keeping them engaged and
informed about job opportunities.

 Sourcing and Pipelining: Recruiters can proactively source

candidates and create pipelines of potential talent, even before
specific job openings arise.

 Analytics for Relationship Building: CRM systems often include

analytics to measure the effectiveness of engagement strategies.

Key Benefits:

 Foster long-term relationships with candidates, improving employer

branding.

 Proactively source and engage with potential candidates.

 Build and maintain talent pools for future recruitment needs.

 Enhance the overall candidate experience.

Common Features:

 Candidate segmentation, communication tools, talent pooling, and

analytics for relationship management.

Integration:

 Many organizations use a combination of both ATS and CRM

systems. They may integrate these tools to create a comprehensive
recruitment ecosystem that covers both immediate hiring needs
(ATS) and long-term relationship building (CRM).
In summary, while ATS focuses on managing the application and hiring
process efficiently, CRM is centered around building and nurturing
relationships with candidates over time. Depending on organizational
needs, a combination of both systems may be implemented to create a
holistic and effective recruitment strategy.

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:
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.

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.
The accuracy of Applicant Tracking System (ATS) software depends on
various factors, and its performance can vary among different systems.
Here are key considerations:
1. Resume Parsing Accuracy:
 ATS software parses resumes to extract relevant information.
The accuracy of this process depends on the software's ability
to understand diverse resume formats and languages. Some
ATS may struggle with complex formats or uncommon fonts,
leading to potential errors.
2. Keyword Matching:
 Many ATS use keyword matching to screen and rank resumes.
The accuracy here relies on the effectiveness of the chosen
keywords. If the keywords are too specific or too broad, the
ATS may not accurately identify the most qualified candidates.
3. Data Entry and User Input:
 Human error during data entry or user input can impact the
accuracy of ATS data. For instance, incorrect input of job
requirements or candidate qualifications can lead to
mismatches.
4. Algorithmic Bias:
 Some ATS systems may inadvertently introduce biases based
on the algorithms used for screening. If the algorithms are not
carefully designed and tested, they may favor or disadvantage
certain demographics.
5. Updates and Maintenance:
 Regular updates and maintenance of the ATS are crucial for
accuracy. Outdated algorithms or databases may compromise
the system's ability to effectively match candidates with job
requirements.
6. Customization and Configuration:
  The ability to customize and configure the ATS according to
the specific needs of an organization impacts accuracy. An
ATS that allows for easy adaptation to unique hiring processes
tends to be more accurate.
7. Integration with Other Systems:
 Integration with other HR systems and tools can enhance
accuracy by ensuring seamless data flow. Incomplete or
inaccurate data due to integration issues may lead to errors.
8. Quality of Candidate Input:
 The accuracy of ATS also depends on the quality of
information provided by candidates. Incomplete or misleading
information on resumes can challenge the system's accuracy.
9. Feedback Loop:
 Implementing a feedback loop where recruiters provide input
on the accuracy of ATS recommendations can contribute to
continuous improvement. Regular reviews and adjustments
based on feedback help refine the system over time.

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.

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.

1. Efficient Application Management:

 ATS automates and centralizes the process of collecting and

managing job applications. This efficiency is crucial, especially
for organizations receiving a high volume of applications for
multiple positions.

2. Time Savings:

 By automating tasks such as resume parsing, application

screening, and interview scheduling, ATS reduces the time
spent on administrative aspects of recruitment. This allows
recruiters and HR professionals to focus on more strategic and
value-added activities.

3. Improved Candidate Screening:

 ATS systems use predefined criteria and algorithms to screen

and rank candidates based on their qualifications. This
ensures that recruiters can quickly identify candidates who
meet the specified requirements, leading to a more efficient
hiring process.

4. Enhanced Collaboration:

 ATS facilitates collaboration among hiring team members.

Recruiters and hiring managers can access a centralized
platform to share feedback, communicate on candidate
profiles, and collectively make informed decisions.
5. Centralized Candidate Database:

 ATS creates a centralized repository of candidate data. This

database becomes a valuable resource for future hiring needs,
allowing employers to build talent pools and easily revisit
previous applicants for new positions.

6. Compliance and Standardization:

 ATS helps ensure compliance with hiring regulations and

internal policies. Standardized processes within the system
contribute to fairness and consistency in the hiring process,
reducing the risk of legal issues.

7. Customization and Workflow Automation:

 Employers can customize the ATS to align with their specific

hiring workflows and requirements. Automation of routine
tasks, such as sending acknowledgments and status updates
to candidates, further improves efficiency.

8. Improved Candidate Experience:

 With features like automated notifications and a streamlined

application process, ATS contributes to an improved candidate
experience. Candidates receive timely updates on their
application status, enhancing transparency and
communication.

9. Data-Driven Decision Making:

 ATS generates reports and analytics on various recruitment

metrics. This data helps employers evaluate the effectiveness
 of their hiring strategies, identify bottlenecks, and make
informed decisions based on real-time insights.

10. Integration with Other HR Systems:

 Many ATS systems integrate seamlessly with other HR

software, such as human resource management systems
(HRMS) and payroll systems. This integration ensures data
consistency across various HR functions.

11. Cost Savings:

 By automating and streamlining recruitment processes,

employers can achieve cost savings. Reduced time-to-fill,
improved productivity, and better resource utilization
contribute to overall cost efficiency.

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.
Here are some potential aspects of the future of ATS

1. Artificial Intelligence (AI) and Machine Learning (ML):

 Future ATS are likely to incorporate AI and ML algorithms for
more sophisticated candidate matching, automated resume
screening, and predictive analytics. This can enhance the
accuracy of candidate evaluations and improve the overall
efficiency of the hiring process.
2. Chatbots and Virtual Assistants:
 Integration of chatbots and virtual assistants within ATS
platforms can provide real-time communication with
candidates, answering queries, providing updates, and
offering a more interactive and personalized candidate
experience.
3. Automated Interviewing Tools:
 The future ATS may include advanced tools for automated
interviewing, such as video interviewing platforms with natural
language processing capabilities. This can streamline the
initial stages of candidate assessment.
4. Enhanced Candidate Experience:
  Focus on improving the candidate experience will likely be a
key aspect. Future ATS may prioritize user-friendly interfaces,
mobile optimization, and personalized communication to
create a positive and engaging experience for applicants.
5. Data Security and Privacy:
 With increasing concerns about data security and privacy,
future ATS are expected to prioritize robust security measures
and compliance with data protection regulations to ensure the
confidentiality and integrity of candidate information.
6. Integration with HR Tech Ecosystem:
 ATS will likely continue to integrate seamlessly with other HR
technologies, creating a comprehensive HR tech ecosystem.
This may include integration with performance management
systems, learning management systems, and employee
engagement platforms.
7. Diversity and Inclusion Features:
 ATS may evolve to include features that support diversity and
inclusion initiatives. This could involve implementing
algorithms to reduce biases in candidate selection and
providing analytics to track diversity metrics in the hiring
process.
8. Predictive Analytics for Recruitment Trends:
 Future ATS may leverage predictive analytics to forecast
recruitment trends, allowing organizations to anticipate talent
demands, identify emerging skills, and proactively plan their
hiring strategies.
9. Collaborative Hiring Tools:
 Collaboration features within ATS platforms may become more
advanced, enabling seamless communication and
collaboration among hiring teams, interviewers, and decision-
makers. This can enhance teamwork in the hiring process.
 10. Continuous Learning and Adaptability:
 As the job market evolves, ATS systems may focus on
continuous learning capabilities, adapting to changing
recruitment trends, and staying updated on industry-specific
requirements.
11. Blockchain Technology:
 Integration of blockchain technology could enhance security
and transparency in candidate verification processes,
credential checks, and the management of sensitive
information throughout the hiring lifecycle.
12. Remote Work and Global Talent Pool Management:
 With the rise of remote work, future ATS may include features
for managing a global talent pool, incorporating tools for
remote interviewing, onboarding, and collaboration among
geographically dispersed teams.

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:

1. Use Standard Resume Formats:

 Stick to standard, easily readable resume formats. Avoid using
complex layouts, graphics, or images that may confuse the
ATS.
2. Simple Fonts and Formatting:
 Use common, sans-serif fonts like Arial or Calibri, and keep
formatting simple. Avoid excessive use of bold, italics, or
underlining, and use consistent font sizes throughout.
3. Include Relevant Keywords:
 Tailor your resume with relevant keywords related to the job
description. These keywords should reflect your skills,
qualifications, and industry-specific terminology. ATS often
use keyword matching to screen resumes.
4. Avoid Headers and Footers:
 Information in headers and footers might not be parsed
correctly by some ATS. Include critical details, such as your
name and contact information, within the main body of the
resume.
5. Use Standard Section Headings:
 Stick to conventional section headings like "Work Experience,"
"Education," and "Skills." ATS are programmed to recognize
and categorize information based on standard headings.
6. Provide Clear Contact Information:
 Include your full name, phone number, and email address
prominently at the top of the resume. This makes it easy for
the ATS to identify and categorize your information.
7. Include a Skills Section:
 Create a dedicated section for your key skills, incorporating
relevant keywords. This helps the ATS quickly identify your
competencies.
8. Quantify Achievements:
 Whenever possible, quantify your achievements using
numbers or percentages. ATS may recognize and prioritize
quantifiable results in your work history.
9. Spell Out Acronyms:
  Spell out acronyms the first time you use them, followed by
the acronym in parentheses. This ensures that the ATS
understands and correctly categorizes the information.
10. Submit in a Standard File Format:
 Save your resume in a common file format such as PDF or
Word (.docx). This ensures that the ATS can easily parse and
analyze the content.
11. Tailor for Each Application:
 Customize your resume for each job application by aligning
your skills and experiences with the specific requirements
outlined in the job description.
12. Proofread Carefully:
 Eliminate spelling and grammatical errors, as they can affect
the ATS's ability to accurately parse and understand your
resume.
Creating an ATS optimized resume increases the likelihood that your
application will successfully navigate the initial screening process,
allowing your qualifications to be considered by human recruiters. It's
important to strike a balance between optimizing for ATS and creating a
resume that is compelling and readable for human reviewers.
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.