What is an Applicant Tracking System (ATS)? Everything You Need to Know in a 2025 Guide
Why should businesses invest in an applicant tracking system (ATS)? Well, today, especially after the disruptions of the pandemic and the Great Resignation, Recruitment is more crucial than ever. With younger generations entering the workforce, candidates now have higher expectations, seeking companies that value diversity, inclusivity, and technological advancement.
Skilled professionals have endless opportunities, making it essential for businesses to streamline their hiring process. That’s where an ATS comes in. In fact, in 2024, 98.4% of Fortune 500 companies relied on it.
Let’s dive into what applicant tracking systems are and how they can transform your hiring strategy.
What Is an ATS?
Applicant tracking systems help your hiring team filter and organize potential candidates for a job opening in your company. So, what is an ATS software? This provides a central platform for your team to view and filter candidates based on job requirements. It also helps to track their progress through your hiring process.
Businesses have been using applicant tracking systems since their invention in the 1990s. Before applicant tracking systems were introduced to HR departments, those tasked with hiring new employees kept resumes in filing cabinets or piled high in a mess on their desks. Applicant tracking systems streamlined the whole process.
Over the years, the technology has evolved to meet growing business demands. The Incorporation Of AI — artificial intelligence — has helped recruiters improve their time-to-hire and quality-of-hire. Applicant tracking systems now offer features that are highly valued during the ATS Selection process, such as:
- Single-click postings to multiple job boards and social media platforms
- Automated email templates for candidate communication
- Detailed analytics on your hiring process
- A branded careers page for your company website to improve candidate attraction
- ATS integration with other business software such as HRMS, CRM, and VMS
- Google app integration
- Candidate research and background checks
- Automated resume screening
- Scheduling features
- Aggregate databases of applicants
How Does an Applicant Tracking System Work?
An ATS essentially emulates a human mind. Embracing the automation of applicant tracking systems streamlines some of the more time-consuming screening and organizational steps of your hiring process. Your hiring staff will be able to know at a glance if a given candidate is on the first or second interview. It will also archive an eliminated candidate for future positions in your company. Let’s examine how it works:
- Resume Parsing: When candidates apply for a job, their resumes are uploaded to the applicant tracking system. The ATS system Recruitment Technology then parses or extracts relevant information from the resumes, such as contact details, work experience, education, skills, and keywords.
- Candidate Screening: The applicant tracking system automatically screens and filters candidates based on predefined criteria set by the recruiter or hiring manager. This may include qualifications, experience, skills, location, etc.
- Job Posting and Distribution: 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.
- Applicant Interaction: The applicant tracking 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.
- Candidate Management: 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.
- Interview Coordination: ATS systems often include interview scheduling tools that allow recruiters to coordinate interview dates and times with candidates and hiring managers. This helps streamline the scheduling process and avoid conflicts.
- Insights and Analytics: Applicant tracking system platforms offer reporting and analytics features that provide insights into recruitment metrics, such as time-to-fill, source effectiveness, candidate conversion rates, and Diversity metrics. This data helps recruiters evaluate and improve their hiring strategies.
Benefits of Using an Applicant Tracking System For Recruiters, Employers, and Candidates
Like many user software programs, the benefits of an applicant tracking system are unique to the needs of each user. However, there are quite some universal Applicant Tracking System Benefits that recruitment and hiring professionals enjoy..
1. ATS narrows down your potential candidates to the right candidates
Beginning the filtering process of candidates is a daunting prospect. Before ATS, recruitment staff would spend countless hours scanning resumes or application forms, looking for any indication that a potential employee is worth a closer look.
However, using ATS streamlines this process by implementing the keywords that you’re looking for. It also helps to eliminate candidates who have red flags on their resumes. This ensures that when your hiring staff first looks at a candidate, they’re looking at someone who is more likely to be the right candidate.
Knocking out this initial step saves your company hours of monotonous work. You save money, and with High Volume Hiring happening more frequently now, this time and money can seriously add up.
2. Applicant tracking systems allow for a better overview of candidates
There is no shortage of websites on which you can post your job listing. Keeping track of applicants through each website is a waste of time, and candidates are bound to slip through the cracks with all the chaos of shifting from site to site.
Using an ATS allows your recruitment team to switch between job posting applications easily, compare multiple candidates, change their application status, and more, all without leaving the ATS program. Once again, this will save your hiring team untold headaches and save your company money in the form of average time spent on the hiring process.
3. ATS reduces your cost-per-hire and time-per-hire
Fortune 500 companies got where they are by being smart and innovative. No wonder over 90% of them use an applicant tracking system. Here are some statistics that back up why you should be using an ATS.
94% Of Recruiters agree that their ATS has had a positive impact on their organization’s hiring processes. Recent studies also indicate that an effective ATS can decrease the average hiring cycle by as much as 60%. And more than 86% of recruiters agree that their ATS has reduced their overall time-to-hire.
Fortune 500 companies who use an applicant tracking system have seen their average cost-per-hire dropping to between $150 and $300. That’s a saving of around $1,500 per candidate. Factor this in with high-volume hiring, and you’ve got a vast difference in how much it could cost you to staff your business fully.
4. Applicant tracking systems helps make your company more diverse and inclusive
Diversity and inclusion have moved to the forefront of nearly every market in the world, and that trend is expected to continue. Creating a diverse and inclusive company provides your company with exponential benefits. Companies with a diverse workforce benefit greatly from the diversity of ideas.
Using tools such as intelligent writing, intelligent selecting, and intelligent assessment scoring helps reduce bias in your hiring process and Embrace Diversity In Your Workplace. The world is evolving in the 21st century, and companies that recognize and evolve with the trends of the future are the ones that will succeed and last.
5. ATS decreases your time-to-hire
With all the competition for good employees it’s important that you stay competitive by moving good applicants from initial application to hired employee as fast as possible. Companies with a slow time-to-hire risk good candidates accepting positions at other companies.
By organizing all of your candidates in one program, it makes it easier for you and your hiring staff to review, rate, and narrow down potential candidates. Streamlining this process will save you and your potential candidate precious time.
6. Applicant tracking systems improves candidate experience
Websites like GlassDoor prove that applicants talk to each other. Just because a given candidate isn’t hired doesn’t mean that they can’t have an impact on your business. Having a streamlined hiring process with excellent communication makes a candidate feel valued.
A candidate who feels valued will not only have positive things to say about your company — inspiring other candidates to apply — it also maintain a good relationship with that candidate. This increases the likelihood that a candidate will re-apply to your company if a more suitable role becomes available.
Key Features of the Best Applicant Tracking Systems
Time to explore the core functionalities that make an ATS indispensable for modern HR teams, enabling them to efficiently source, screen, and hire the best candidates for their organizations.
- Candidate Profile Extraction: The ability to automatically extract and parse relevant information from resumes, 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.
Types of ATS
Applicant tracking systems can be categorized into different types based on their functionality and target users. Here are the main types of ATS in a user-friendly table.
| Type of ATS | Function |
|---|---|
| Basic ATS | Entry-level ATS solutions that offer essential features such as job posting, resume parsing, and basic candidate management. Suitable ATS for small businesses or startups with simpler hiring needs. |
| Enterprise ATS | Designed for large organizations with complex hiring processes and high volumes of applicants. Offers advanced features such as customizable workflows, integration with other HR systems, and analytics and reporting capabilities. |
| Industry-Specific ATS | Some ATS solutions are tailored to specific industries or sectors, such as healthcare, retail, or hospitality. These often come with features and functionalities tailored to the unique hiring requirements of those industries. |
| Recruitment CRM | Recruitment Customer Relationship Management (CRM) systems combine ATS functionality with customer relationship management features. Designed to manage candidate relationships throughout the entire recruitment lifecycle, from sourcing and initial contact to hire. |
| Open-Source ATS | Provide customizable and flexible platforms that allow organizations to build and customize their own ATS according to their specific needs. Often favored by organizations with unique or specialized hiring requirements. |
| Mobile ATS | Optimized for mobile devices, allowing recruiters and hiring managers to manage the recruitment process on the go. Usually offer mobile-friendly interfaces and features such as mobile job applications and candidate communication. |
How Much Do Applicant Tracking Systems Cost?
The cost of applicant tracking systems can vary 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 Resume 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. So, it’s essential for organizations to carefully evaluate their specific needs and budget constraints when selecting an ATS provider and pricing plan. Many ATS providers also offer customizable packages aand pricing options to accommodate different organizational requirements.
What to Know When Selecting an Applicant Tracking System
Selecting the right applicant tracking system (ATS) is crucial for streamlining your recruitment process. Here are key factors to consider:
Be clear about the problem you’re trying to solve
Identify the specific challenges your organization faces in hiring. For example, if attracting top talent is a priority, look for an ATS with features like dynamic job descriptions, AI-driven skill profiling, and automated skill assessments. If communication and candidate engagement are lacking, choose an ATS that emphasizes human touchpoints and progress tracking throughout the hiring process. For global recruitment, ensure the system supports multiple languages.
Align the investment to your organization’s capability
Evaluate your organization’s readiness for new technology. Consider your budget, resources, and willingness to adapt to new tools. Understand the return on investment, both financially and in terms of time, to ensure the system will provide long-term value.
Assess your IT infrastructure
ATS options can vary in complexity, with some requiring significant integration and resources. Ensure your IT infrastructure can support the chosen ATS, especially if it needs to interface with other tools (like background checks or drug screenings). Understand the time and resources needed for implementation and integration, as some systems may require months of setup.
By considering these factors, you can select an ATS that fits your needs and supports your organization’s recruitment goals effectively.
The Future of Applicant Tracking Systems
Applicant tracking systems are not going anywhere soon. The future of applicant ATS will likely involve further integration of AI and machine learning (ML) technologies to enhance automation and decision-making capabilities. These advancements could include:
Predictive analytics
ATS may use predictive analytics to forecast hiring needs, identify top candidates, and predict candidate success based on historical data and performance metrics.
Enhanced candidate matching
AI-driven algorithms could improve candidate matching by analyzing resumes, job descriptions, and candidate profiles to identify the best-fit candidates more accurately.
Personalized candidate experience
ATS may offer more personalized candidate experiences by tailoring communication, content, and job recommendations based on individual preferences and interactions.
Bias reduction
AI-powered applicant tracking systems could help mitigate unconscious bias in the hiring process by anonymizing candidate information, removing identifying factors, and providing objective candidate evaluations.
Automation of administrative tasks
ATS will continue to automate repetitive administrative tasks such as resume screening, interview scheduling, and candidate communication, allowing recruiters to focus on more strategic aspects of the hiring process.
Integration with emerging technologies
Applicant tracking systems may integrate with emerging technologies such as virtual reality (VR) for immersive candidate assessments, chatbots for automated candidate engagement, and video interviewing platforms for remote hiring processes.
The question is, why would you wait to get on board with ATS? It’s truly the tool of the future for hiring and recruitment.
The Ultimate Applicant Tracking System Software: Achieve Hiring Excellence with Oleeo
An applicant tracking system (ATS) like Oleeo Recruit is a powerful tool for smarter, more efficient candidate recruitment. With Oleeo, you can streamline your recruitment process, customize workflows to fit your needs, and integrating diversity and inclusion into your hiring strategy becomes easy.
Request a Demo of our top applicant tracking platform today and see how Oleeo can give you a competitive edge in the tough recruitment market.
FAQs About Applicant Tracking Systems
What is an applicant tracking system?
An applicant tracking system (ATS) is software that helps businesses manage and streamline the recruitment process by automating tasks like resume screening, candidate tracking, and hiring workflows.
How does an ATS applicant tracking system differ from other recruitment software?
An ATS specifically focuses on managing and tracking candidate applications throughout the hiring process, from initial application to onboarding, while other recruitment software may have broader functionalities, including sourcing candidates, managing job postings, and analyzing recruitment metrics.
Applicant tracking systems also often offer features such as resume parsing, candidate screening, and interview scheduling that are tailored to the specific needs of managing candidate pipelines and facilitating efficient hiring workflows.
How accurate is ATS software?
ATS software accuracy can vary depending on factors such as the quality of data input, the sophistication of the algorithms used for resume parsing and candidate matching, and the extent of customization and training.
Generally, well-implemented ATS Software can achieve high levels of accuracy in tasks such as resume parsing and candidate screening. Still, it’s essential for organizations to regularly monitor and refine the system.
Who uses ATS?
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.
How do hiring managers use an applicant tracking system to find candidates?
Hiring managers use applicant tracking systems (ATS) to streamline the hiring process by automating resume screening, organizing applications, and ensuring efficiency. ATS helps with job posting, collects resumes, and scans them for relevant keywords, ranking candidates based on job criteria. It extracts key information from resumes, filters candidates, and allows hiring teams to collaborate and provide feedback.
ATS also simplifies interview scheduling and ensures compliance by tracking diversity and generating reports. Ultimately, it saves time, organizes the process, and helps managers focus on the most qualified candidates.
Can you integrate applicant tracking software with other recruitment automation software?
Yes, many applicant tracking software platforms offer integration capabilities with other recruitment automation software, such as sourcing tools, assessment platforms, background check services, and onboarding systems.
What is an ATS system example?
An excellent example of an applicant tracking system (ATS) is Oleeo, a cutting-edge platform designed to streamline recruitment. It helps businesses manage job postings, track applicants, automate hiring workflows, and ensure diversity and inclusion are integrated into the hiring process. Other popular applicant tracking systems include Workday; Greenhouse, and Lever.
Can I run my resume through an ATS?
Yes, you can run your resume through an ATS, either by directly submitting it to a company’s hiring portal or using online tools designed to optimize resumes for ATS compatibility. These tools analyze your resume for keywords, formatting, and structure to ensure it meets ATS standards, increasing your chances of passing through the system and getting noticed by recruiters.
What is a resume score and how can you increase it?
A resume score is a numerical value assigned by an Applicant Tracking System (ATS) that indicates how well your resume matches a specific job description. It’s based on factors like keywords, skills, experience, and qualifications relevant to the job.
To increase your resume score, tailor your resume to the job by including relevant keywords from the job description, highlighting key skills and qualifications, and ensuring your resume is formatted in a way that’s ATS-friendly (e.g., using standard fonts and clear headings). Focus on showcasing measurable achievements that align with the role to boost your chances of scoring higher.
Do applicant tracking systems read PDF files?
Many applicant tracking systems (ATS) can read PDF files, but it depends on how the PDF is formatted. Text-based PDFs are generally readable by most ATS, while image-based or scanned PDFs might not be easily parsed. To ensure your resume is ATS-friendly, it’s recommended to use a text-based PDF or submit your resume in a more ATS-compatible format, like a Word document (.docx). This helps ensure the system can properly extract key information like skills, experience, and qualifications.
What are the most common ATS myths?
One of the most common myths about applicant tracking systems is that they only work for large companies, but small and mid-sized businesses can also benefit from streamlining their hiring process with ATS.
Another misconception is that ATS automatically eliminates unqualified candidates, but while it helps identify top matches, human judgment is still needed to assess overall fit.
Some people also think ATS perfectly matches candidates to job descriptions, but the system relies heavily on keywords and may miss nuances that a human would catch.
