What is an Applicant Tracking Software (ATS)?

An Applicant Tracking System (ATS) is a software tool designed to automate and simplify the hiring process. It manages every step of the recruitment process, even crafting the job descriptions in some cases.

Far from being exclusive to large corporations, ATS solutions have now become vital for businesses of all sizes, as they enable hiring teams to organize applications, schedule interviews, and keep track of candidates—all in one place. When automating these tasks, the software allows recruiters and business owners to save time, maintain focus, and make better hiring decisions. Let's take a closer look at how an ATS can transform the recruitment process and, ultimately, your business's performance.

What is an Applicant Tracking Software (ATS)?

An Applicant Tracking Software (ATS) is a specialized tool that helps companies manage every stage of the hiring process, from posting job openings to selecting the ideal candidate. It helps the recruiting teams to easily sort out resumes so they can find the best candidates for the job. This capability—sorting through resumes—has led to the myth that an ATS merely screens resumes based on keywords. Truth is, it does much more than that.

At its core, an ATS helps companies deal with high volumes of applications as it automates tasks like resume parsing and candidate filtering. Beyond speeding up the recruitment process, it also secures that no promising candidate slips through the cracks. Plus, and against many assumptions, numerous ATS platforms offer additional features, like scheduling interviews, tracking candidate progress, and maintaining communication with potential hires.

How Do Applicant Tracking Systems Work?

ATS works as a digital assistant for your recruiting process. In this section, we’ll go deeper into how it plays out.

Overview of ATS Functionality

When a company uses an ATS, the hiring process begins with creating and posting job requisitions. These postings are shared on various platforms—job boards, company websites, or even social media—which allow candidates to apply directly. Once applications start coming in, the ATS gets to work, collecting all the candidate information in one central database.

From there, the ATS parses through resumes to screen profiles. Since it can take out entries from a file, it automatically scans for specific qualifications, skills, or keywords. Instead of spending hours reviewing every single resume, recruiters can use the ATS to instantly pull up a list of the top contenders.

Finally, the ATS tracks each candidate’s progress, from the application phase to the interview and offer stages. This real-time tracking guarantees that no candidate gets lost in the shuffle, and hiring managers can see where each candidate stands at any moment.

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Key Features of ATS

A solid ATS must offer the following key features:

• Job posting management: With an ATS, companies can post job openings across multiple platforms in one go, from popular job boards to the company’s own Careers page.
• Resume parsing: The ATS scans resumes to extract key information like skills and experience, and ranks job candidates based on how well they fit the role.
• Candidate screening or filtering: Recruiters should be able to set filters to narrow down the pool so only job applicants who meet the essential qualifications stay in the process.
• Automated communication: An ATS can send automatic emails to applicants and keep them updated without recruiters needing to follow up manually.
• Business-relevant data points: ATS software keeps detailed records of each candidate's progression through the hiring process. It also generates reports on recruitment metrics like time-to-hire or diversity tracking.

Benefits of Using an ATS

Using an Applicant Tracking System (ATS) can transform your hiring process as it can make it faster, more organized, and easier to manage. That's why almost every company on the Fortune 500 list uses one. Whether you're a small business or a large organization, here are some of the key benefits:

Time-Saving and Efficiency

An ATS takes care of the repetitive tasks like posting jobs, tracking applications, and scheduling interviews. This frees up recruiters’ time to focus on what matters most—finding the right candidates.

Better Candidate Filtering

With resume parsing and filtering tools, an ATS helps you quickly sort through applications and find the best-fit candidates. Instead of manually sifting through piles of resumes, the system highlights the top talent based on your criteria.

Collaboration Made Easy

Hiring usually involves several people. An ATS lets everyone share feedback, review the profiles of job seekers, and stay in sync without endless emails.

Compliance and Record-Keeping

Staying compliant with hiring laws is critical, and an ATS helps as it automatically tracks diversity metrics and creates reports. It simplifies record-keeping as it reduces legal risks and supports fair hiring practices.

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ATS for Small Businesses vs. Large Organizations

Small businesses and large organizations have different needs. While both want to simplify their hiring process, the scale and complexity of their recruitment efforts often lead them to look for specific features. Let’s see how:

ATS for Small Businesses

Small businesses usually operate on tighter budgets and with smaller teams, so they need an ATS that’s cost-effective and easy to use. Many vendors offer basic, budget-friendly plans or even free versions of ATS tools to help small businesses get started without breaking the bank. These systems are often simple, with essential features like job posting and resume parsing, and they require minimal training—perfect for teams without an IT department. It's also worth considering going with a solution that can grow with the business.

ATS for Large Organizations

For large enterprises, the hiring process is more complex, with higher volumes of applicants and more specialized roles to fill. An ATS for these organizations will need to be refined, with advanced features like customizable workflows, AI-driven candidate matching, and detailed analytics. Integration with other HR systems, such as payroll or background checks, is also a must to keep everything running smoothly. Plus, with larger teams handling sensitive data, security and compliance features are particularly essential to meet legal standards and guarantee the security of candidate information.

TalentHR helps both small businesses and large organizations speed up their hiring process. For small teams, it offers an affordable, easy-to-use platform with features like AI-generated job descriptions and simple candidate tracking, perfect for growing businesses. Larger companies can benefit from its robust tools, including AI-powered candidate matching, customizable workflows, and smooth integration with other HR systems.

Choosing the Best Applicant Tracking System

When evaluating ATS options, several key considerations should be top of mind. Start by reflecting on your organization’s unique hiring needs. Is your hiring volume high, or do you only need to fill a few roles occasionally? Are there multiple locations to manage, or are you a centralized team?

Also, don’t forget to consider budget, ease of use, and how well the system integrates with your existing tools like payroll or performance management software.

Cloud-Based vs. On-Premise ATS Solutions

One of the fundamental choices when selecting an ATS is whether to go for a cloud-based or on-premise solution. A cloud-based ATS offers flexibility as it allows your team to access it from anywhere and typically involves fewer upfront costs. On-premise solutions, on the other hand, provide more control over customization and data security but usually require a higher initial investment and dedicated IT support.

Ask yourself how mobile and flexible your team needs to be, and whether your infrastructure can support an on-premise system. For companies seeking scalability and ease of deployment, cloud-based systems are often the way to go.

Integration with Other HR Tools and Systems

An ATS needs to function smoothly with your existing HR tools, such as payroll, employee performance management, and communication systems. The ability to integrate with these platforms can significantly improve your hiring workflow, as it reduces data entry duplication and increases accuracy across systems. Evaluate whether the ATS can support these integrations effortlessly, and think about the long-term compatibility of the system with other tools you might adopt as your business grows.

User-Friendly Interface and Support

Finally, an ATS should be intuitive and easy to use. A user-friendly interface is crucial for your HR team and for other stakeholders involved in the hiring process, like department heads or external recruiters. If a system is overly complicated, it could slow down the hiring process and lead to frustration.

ATS FAQs

How do AI and machine learning enhance ATS functionality?

AI and machine learning improve ATS as they level up on tasks like resume screening. LLMs can understand synonyms and alternative phrases better than traditional tools, so it's a quicker tool when you need to match candidates to your job description.

Is ATS only suitable for large companies, or can small businesses use it too?

ATS is beneficial for companies of all sizes. Small businesses can use it to simplify their hiring process, scale down on manual tasks, and compete for top talent more effectively, often with budget-friendly options.

Can ATS track candidate progress through different stages of the recruitment process?

Yes, ATS can track candidates from application submission to final hiring and show their status at each stage. This helps the hiring team stay organized and guarantees that no candidate is overlooked.

Is an ATS merely a resume-screening tool?

No, an ATS does much more than screening through keywords. It helps run job ads, filter out the best candidates—that's the screening part—and even follow up with them. But... if the ATS is not set up well, it will just look like a tool for screening resumes based on keywords.