What is an applicant tracking system (ATS)?

An applicant tracking system, also known as ATS, is a type of recruiting software that helps businesses attract and hire talent. It automates the hiring process by posting job opportunities to various career sites and storing applicant data.

An ATS helps businesses organize candidates’ data based on their work experience and skill sets. This refined data helps businesses in conducting a preliminary screening for qualified candidates.

An applicant tracking system (ATS) makes top talent acquisition easy and streamlined, saving time and money in the process. It gives the HR team more time to focus on onboarding, payroll, and other responsibilities while the software screens candidates for available job titles.

What is the primary purpose of an applicant tracking system?

The primary purpose of an applicant tracking system (ATS) is to streamline the recruitment process by centralizing all candidate information and automating different steps of the process.

An ATS supports the entire hiring lifecycle by:

• Sharing and promoting job postings
• Collecting resumes and candidate information
• Filtering resumes to identify eligible candidates
• Scheduling interviews and other candidate communication
• Sending onboarding confirmation to selected candidates
• Closing the loop for unsuccessful candidates.

What are the key benefits of using an ATS?

The key benefits of using an ATS are improved efficiency, better candidate experience, enhanced collaboration, accurate reporting, and higher compliance. Let’s break down how each of these is achieved:

• Improved efficiency: An ATS saves the time and effort of recruiters in repetitive manual tasks like posting jobs to multiple portals, scheduling interviews, screening resumes, and more.
• Better candidate experience: ATS standardizes the hiring process with consistent communication and updates to keep candidates engaged.
• Enhanced collaboration: ATS makes it easy for hiring teams to coordinate with each other. They get a single portal to store all details/feedback.
• Accurate reporting: ATS comes with an in-built analytics module to better track key metrics like time-to-hire, cost-per-hire, etc.
• Higher compliance: ATS takes consent from candidates to store their data and also follows data privacy standards like GDPR and CCPA for compliance. It also conducts anonymized resume screening based on skills and experience, preventing bias in the hiring process.

How does an ATS work?

An ATS works by automating and organizing the hiring process, from job posting to candidate selection. Here is a step-by-step breakdown of how an ATS works, focusing on its core functions:

1. Job posting and distribution (multi-channel): Recruiters create job listings in the ATS and publish them on their career pages, external job boards like LinkedIn, or social media platforms—all in a single click.
2. Application intake and management: Once the job posting is live, the ATS also consolidates candidate applications from various sites into one centralized portal.
3. Resume parsing and screening: Nowadays, ATS uses AI to pull important information from resumes, such as skills, experience, education, contact information, and location. ATS also helps in quick screening by ranking candidates whose applications or resumes match the job description more closely. You can filter out resumes based on any skillset, experience level, or more.
4. Interview scheduling and feedback collection: An ATS also streamlines the interview process by automating the communication part, such as sending calendar invites or reminders. It also improves feedback collection by prompting interviewers to give their feedback on candidates after the interview. An ATS also stores the feedback for improved record-keeping and informed decision-making.
5. Offer management and hiring analytics: If a candidate makes it through the interviews, then ATS also takes care of offer management, such as sending offer letters or collecting any candidate documents. You can also take steps to improve hiring processes by using built-in analytics, providing key metrics such as time-to-hire, cost-per-hire, source of hire, and applicant drop-off rates.

Who are the users of an ATS?

Here is a breakdown of the key users of an applicant tracking system and what each group typically uses it for:

Recruiters / Talent Acquisition Specialists

Recruiters and Talent Acquisition Specialists are the primary users of an ATS. They:

• Post and manage job openings across platforms
• Screen and filter candidate applications
• Communicate with applicants
• Schedule interviews and manage hiring pipelines
• Track time-to-hire and other recruitment KPIs

Hiring managers

Hiring managers are typically the leaders or supervisors of the department hiring for new roles, and they play a key role in the hiring process. They work closely with the recruitment team to ensure the hiring process aligns with company objectives, employment policies, and workforce needs.

• Review shortlisted candidates
• Collaborate with recruiters on evaluations and feedback
• Request new job openings and define role requirements
• Provide interview notes and make final hiring decisions

HR / People Operations

• Ensure hiring practices comply with internal policies and labor regulations
• Analyze recruitment data and trends
• Help standardize job descriptions, interview processes, and scoring systems
• Coordinate onboarding after a hire is made

Executives / Department heads

• Monitor hiring progress against headcount plans
• Access dashboards and reports for strategic workforce planning
• Approve budget and requisitions for new hires

Candidates (external users)

• Use the ATS front-end (career site or application form)
• Submit resumes, track application status, and communicate with the company

How is an ATS different from a CRM?

An ATS helps in the recruitment process by managing the hiring process for the active candidates who have applied for the position. On the other hand, candidate relationship management (CRM) focuses on building a talent pool of candidates for businesses, regardless of whether there are open positions. Whenever a requirement comes, recruiters can contract candidates from this talent pool and close the position quickly.

How does an ATS affect candidate experience?

An ATS enhances the candidate experience by standardizing the hiring process with smoother communication and faster feedback. It reduces common bad experiences of candidates, such as:

• Preventing ghosting: 61% of job seekers get ghosted after a job interview. This results in a poor impression of companies, which can damage their employer brand and demotivate potential applicants from applying again. An ATS streamlines the feedback process with reminders for interviewers and automated emails to candidates.
• Improving candidate communication: Candidates often feel confused about the next step in the hiring process, especially due to a lack of communication. In fact, 42% want stronger communication from recruiters. An ATS mandates communication checkpoints and also automates reminders (emails) to ensure the candidate is always aware of the next steps.

How does an ATS facilitate global hiring?

An ATS assists with global hiring by coordinating with international candidates and handling the compliance requirements of the hiring country. Let’s see how:

• International candidates coordination: ATS allows recruiters to post the job posting in multiple international job boards, helping them get applications from the countries they wish to hire. Apart from handling job applications, an ATS does the timezone management for interviews to ensure the timings suit both the interviewer and candidates.
• Compliance monitoring: ATS takes consent from candidates to store data as per the local laws of the hiring country, preventing any compliance issues down the line. The anonymized resume review option in ATS also prevents bias in the hiring process.

Who needs an ATS, and when do they need it?

Most companies, regardless of their size and domain, need an ATS to manage their recruitment process.

An ATS helps:

• Small businesses or startups to scale their hiring
• Medium-sized businesses to hire across different departments and countries
• Enterprise business to improve candidate experience, elevate the hiring process, and recruit top talent with built-in analytics.

Do small companies need an ATS?

Yes, small companies need an ATS to manage recruitment with limited HR resources. Each job posting gets around 73 applications on average. It’s a lot of manual and admin work for a small HR team to go through these applications and handle all scheduling/communication. ATS makes it easy to improve hiring efficiency and increase the quality of hires.

What are must-have ATS features?

The key features of an ATS are job posting, candidate database, resume parsing, collaboration tools, interview scheduling, reporting, and integrations. Let’s see why each of these features is important:

• Job posting: An ATS must be able to publish a job posting on multiple job boards. It makes reaching candidates simple from a single console request rather than logging in to each portal separately.
• Candidate database: ATS comes with a candidate database to store all applicant information and resumes. Since ATS posts all jobs from the same portal, all candidate applications come to it. With the centralized database, you don’t have to check multiple portals to get candidate data.
• Resume parsing: ATS automatically extracts relevant information from candidate profiles, such as contact information, skills, and experience. It can also rank candidates on how closely they match the job description. This feature enables recruiters to efficiently screen candidates without manually reviewing all details in every resume.
• Collaboration tools: ATS helps recruiters, hiring managers, and interviewers to track all candidate profiles in one place. They can check profiles, view/share feedback, and make hiring decisions.
• Interview scheduling: ATS assists in scheduling interviews, managing even the time zone of both candidates and interviewers. This reduces the back and forth required to schedule any interview.
• Reporting: ATS comes with an analytics dashboard with metrics like time-to-hire, source of hire, and candidate conversion rates. Tracking these metrics helps optimize hiring strategies to save time and resources and double down on effective recruitment methods.
• Integrations: An ATS must have built-in integrations with your existing HR tools for skill tests, background checks, and more. It ensures you can track and manage, and conduct all hiring-related activities, seamlessly from the same portal.

What does it mean when an ATS integrates with existing tools?

When an ATS integrates with your existing tools, it means it can connect or share data with those tools, especially the ones used in the hiring process. It means you don’t have to manually run another tool at any hiring stage or make a data entry.

An ATS must integrate with these tools:

• Job boards: Allow posting jobs directly to multiple job boards without manual intervention.
• Email and other communication apps: Facilitate sending messages and reminders to candidates.
• Scheduling apps: Enable setting up interviews based on candidates’ and interviewers’ availability and time zones.
• Video interviewing tools: Add a video call link directly to the interview invite.
• Candidate assessment tools: Enable the use of assessment tools during interviews to validate skills.
• Background checks and identity verification platforms: Initiate background checks for selected candidates right from the ATS.
• E-signature and document management systems: Gather signatures of selected candidates on hiring documents and store documents.
• Human resources information systems (HRIS) and payroll software: Copy new hire data automatically from ATS to HRIS and payroll for onboarding.

How do I choose the right ATS?

Choosing the right ATS depends on your company’s size, hiring volume, integration needs, compliance requirements, and expected user experience.

An ATS must be able to cater to:

• Company size: How many users are you looking at, and does the ATS provider charge per user or offer custom pricing?
• Hiring volume: What’s the hiring volume you are looking at, and how many open job applications can the ATS handle?
• Integrations: Does the ATS provide built-in integrations with your existing HR tools and fit seamlessly in your hiring process?
• Compliance requirements: Does the ATS meet industry and local standards for data storage and security?
• User experience: Does the ATS offer an intuitive user experience with a negligible learning curve?

What are the KPIs to track to assess ROI and the success of an ATS implementation?

Businesses track time-to-fill, time-to-hire, offer acceptance rate, cost per hire, applicant drop-off rate, and quality-of-hire to assess the efficiency of ATS implementation. Tracking these metrics is essential as:

• Time-to-fill (TTF): Shows how fast a position gets filled
• Time-to-hire (TTH): Tells how much time it takes from candidate application to the offer stage
• Cost-per-hire (CPH): Tracks total expenses per hire
• Applicant drop-off rate: Gauges how often applicants are dropping from ATS
• Quality of Hire (QoH) Inputs: Checks the quality of new hires by integrating ATS and new hire onboarding assessment tools/HRIS.

What are the common ATS pitfalls, and can you avoid them?

The most common ATS implementation failures stem from gaps in existing features that increase the manual work of recruiters and prevent candidates from applying. The usual gaps (and ways to avoid them) are:

• Poor recruiter experience: Verify the entire ATS solution for user-friendliness and choose the one with minimal to no training needs.
• Inaccurate resume parsing: Before committing to any long-term subscription to an ATS, take a test drive to verify how accurate it is with parsing to ensure it’s not rejecting strong applications.
• Poor candidate experience: Verify the candidate experience to identify any clunky forms that may deter applicants.
• Incomplete integration with other HR tools: Check if the ATS integrates with your HR tools to connect and transfer data.
• Incompliant data storage: Verify if the ATS stores data compliant with industry and/or local standards and follows appropriate data retention rules.
• Ineffective reporting: Check if the ATS has in-built dashboards with all required metrics.

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