Applicant Tracking Systems (ATS): Everything You Need to Know

Understanding how an applicant tracking system (ATS) works and adapting to its criteria is critical for getting past the initial resume screening.

This guide provides an in-depth look at ATS functionalities and best practices for 2024, offering insights into how these systems scan, sort, and rank your resume.

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Struggling to land interviews with your resume? Get started with Teal’s AI Resume Builder for free.

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What is an ATS?

An ATS, or Applicant Tracking System, is a software application used by recruiters and employers to collect, sort, scan, and prioritize job applicants' resumes. It serves as a centralized database for managing the recruiting process, from posting job ads to screening candidates.

ATS is widely adopted by companies of all sizes, from small businesses to large enterprises across various industries. Recruiters, HR professionals, talent acquisition specialists, and hiring managers are the primary users of this technology.

Applicant Tracking Systems are most often used early in the recruitment process when job postings attract a high volume of applicants. The software moves the initial screening along more quickly by automatically parsing resumes and ranking candidates based on their qualifications, skills, experience, and other job-relevant criteria specified by the employer.

Before learning how to write an ATS-friendly resume, it's important to understand how this technology has advanced over the years.

That way, you can write your resume with the most modern best practices in mind.

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The evolution of Applicant Tracking Software

1990s: Emergence of the ATS

The arrival of digital job boards like Monster.com resulted in an overwhelming increase in applications.

Early ATS systems were developed to lighten the burden on recruiters, focusing on basic functionalities such as keyword scanning, job posting automation, and tracking applicants through the hiring process.

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2000s: Web-based systems and enhanced features

The introduction of web-based platforms marked a shift, making ATS more accessible and integrated.

This era brought sophisticated data management, compliance features for new regulations like the Sarbanes-Oxley Act, and the initial steps toward integrating ATS with other HR solutions.

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2010s: Integration and improved candidate experience

Integration with HR systems became deeper and many platforms embraced mobile, reflecting the changing way candidates applied for jobs. ATS providers also began to focus on the candidate experience, making the application process simpler and more intuitive.

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2020s: AI, analytics, and the drive for diversity

Today's ATS systems leverage AI and advanced analytics for better candidate matching and insightful reporting.

There's a strong focus on reducing unconscious biases and promoting diversity in recruitment processes. Plus, with the importance of data privacy, ATS systems are evolving to align with regulations like GDPR and CCPA.

With continuous advancements in technology, ATS is set to further transform the entire recruitment process, making it more efficient, equitable, and candidate-friendly.

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The benefits of using an Applicant Tracking System

Applicant tracking systems offer many advantages to employers. Understanding how they work—and how employers use them—can also give job seekers an edge in the hiring process.

ATS technology allows recruiters and hiring managers to work more efficiently by automating many manual tasks involved in reviewing applications, such as screening resumes and identifying qualified candidates.

An ATS can also enhance the job seeker experience.  It’s what allows candidates to submit their materials through an online portal and receive confirmation that their application has been received. Many ATS platforms also allow candidates to check the status of their application and receive updates throughout the hiring process.

This level of transparency creates a positive impression of the employer brand.

Most importantly, applicant tracking systems improve the quality of hiring decisions by supplying a smarter way to evaluate candidates. Recruiters can search for specific skills, qualifications, and experience across thousands of resumes simultaneously.

The most qualified applicants rise to the top of the rankings based on relevance to the job requirements.

With an ATS, companies avoid overlooking qualified candidates whose resumes may have slipped through the cracks using traditional manual review methods.

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How ATS technology works

Applicant Tracking Systems are a way to manage, scan, filter, and rank candidates by their resumes. Employers use ATS to more efficiently manage the recruitment process. They automatically process resumes and cover letters to extract relevant information like skills, experience, education, and other qualifications.

A helpful analogy to understand ATS is to think of it as an email spam filter. In the same way spam filters analyze incoming emails to identify and separate junk mail from important messages, ATS software scans resumes to identify qualified candidates whose qualifications best match the job requirements.

It's important to understand that ATS is designed to surface and prioritize the most qualified applicants, not arbitrarily eliminate candidates. The system ranks resumes based on how well the content aligns with the job description and requirements specified by the employer or recruiter.

Resumes with higher rankings are moved to the next stage of review, while those with lower rankings may be deprioritized.

The ATS is not anti-candidate. It’s not a bot. A human always determines the required keywords and sets the sorting parameters, so a human is always in the loop when ATS candidates are removed from the process.

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How hiring managers and recruiters use ATS

When a job posting receives hundreds or thousands of applications, ATS technology becomes an invaluable tool for quickly identifying the most qualified candidates.’

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Step 1: Set the criteria

• Identify role requirements: The process starts with recruiters defining the job's specific needs. This could include particular skills, required years of experience, necessary education levels, and relevant certifications.
• Input keywords into the ATS: These job requirements are then translated into keywords and criteria, which are inputted into the ATS software to help filter applications.

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Step 2: Scan and rank resumes

• ATS scan submissions: Once the criteria are set, the ATS begins scanning all submitted resumes. It looks for keywords that match the predetermined criteria.
• Rank based on relevance: The software evaluates how well a resume aligns with the job requirements. It considers the presence and frequency of specific keywords throughout a resume, including their professional summary, work history, and skills section.
• Prioritize top candidates: Resumes that demonstrate greater relevance through keyword matching are then ranked higher in the applicant pool for easier identification by recruiters.

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Step 3: Review and shortlist

• Quick access to top applicants: With the heavy lifting done by the ATS, recruiters can quickly review resumes that have been prioritized by the system.
• Shortlist for further evaluation: The most promising candidates, now highlighted at the top of the list, are selected for further evaluation, which could involve interviews and additional assessments.

Here's what an ATS search looks like from the recruiter's perspective: 

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As you can see, the ATS allows recruiters to filter through candidates quickly and efficiently based on role criteria. This initial vetting is a crucial first step in recruiting processes.

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Misconceptions around ATS technology

There are a few common misconceptions about "beating" the ATS that should be addressed.

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Misconception 1: ATS software eliminates applicants

Many believe that Applicant Tracking Systems (ATS) automatically eliminate candidates who don't meet certain criteria.

However, the purpose of ATS software is to help recruiters manage and prioritize applications more efficiently.

Instead of discarding candidates, these systems sort and rank resumes based on how well they match the job description and key qualifications. The goal is to surface the best-suited candidates before scheduling interviews.

Therefore, the focus should be on tailoring your resume to closely match the job requirements, which will enhance your chances of getting prioritized by the ATS.

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Misconception 2: Using white text or hiding keywords

Some advise using white text or hiding keywords in an attempt to "stuff" resumes with relevant terms.

That said, most modern ATS can detect this tactic, and it may even get your application rejected for trying to "game" the system unethically.

"Black hat" resume tactics like this won't cut it in 2024.

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Misconception 3: Submitting resumes in PDF format

All modern ATS systems can read PDF. PDFs that include several images are the exception. Images can be difficult for ATS software to scan effectively. The ATS may struggle to correctly extract text and interpret the document's structure, such as headings, bullet points, and sections.

Plain text (.txt) or Microsoft Word (.docx) formats are generally more ATS-friendly. They allow the software to easily recognize and categorize information based on common textual cues and hierarchy, such as headings for experience, education, and skills.

However, PDF resumes are also ATS-friendly.

If you’re debating between which format to use, check out this guide on PDF or Word doc resumes. 

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How to "beat" Applicant Tracking Systems

Instead of trying to "beat" the ATS technology, it's better to think about how to best play by the rules. For that, consider the following ATS best practices.

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1. Use ATS-friendly formatting

Stick to clean and simple formatting when preparing your resume to ensure it is ATS-friendly.

Avoid using tables, columns, headers, and footers, as these elements can often confuse ATS parsing algorithms. Choose clear section headings and a linear format to facilitate easy reading and interpretation by the software.

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2. Incorporate relevant keywords

To make your resume more effective, carefully analyze the job descriptions and include keywords and skills that match the position's requirements.

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It's important to integrate these keywords naturally within the context of your achievements and qualifications rather than simply listing or stuffing them, which can appear forced and may be flagged by the ATS.

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3. Quantify achievements

ATS systems often favor resumes that quantify your resume. Specify achievements with numbers, percentages, or specific milestones, as these provide concrete evidence of your capabilities.

Instead of vague adjectives like "successful" or "experienced," use precise data points to describe your accomplishments.

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4. Customize for each role

Tailoring your resume for each job application is crucial. Adjust the skills and experience sections to align closely with the role.

This customization helps highlight your suitability for the role and can increase your resume's visibility in the ATS.

5. Use Teal's AI Resume Builder

Teal provides a variety of tools designed to enhance your resume's compatibility with ATS systems:

• Proper ATS formatting: Teal's resume builder automatically structures your resume in an ATS-friendly format.
• Resume parsing tips: Gain insights on how to improve your resume's parsing outcomes based on your existing resume.
• Example ATS templates: Access pre-built templates that are optimized for maximum compatibility with ATS systems.
• Matching mode: This feature allows you to incorporate relevant keywords from job descriptions into your resume automatically.

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By employing these strategic formatting and customization approaches, you can significantly improve your resume's ranking within ATS systems, avoiding the need for dubious tactics.

Want more help beating the ATS? Check out this resource on how to optimize resumes for ATS.

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ATS Resume Examples

1. Bad ATS resume example

This resume is not ATS-friendly for several reasons:

1. Non-standard section titles: Titles like "Curator of Experiences" and "My Journey" are creative but do not match conventional categories like "Work Experience" or "Education," which ATS systems recognize and parse more effectively.
2. Unusual job titles: Creative roles like "Artistic Director" at "Creativity Unleashed" or "Innovation Guru" at "BizSolutions Inc." may not be recognized or properly categorized by ATS, which often looks for standard industry keywords and job titles.
3. Stylized formatting: The use of special characters (e.g., ✦✦✦) and mixed formatting can confuse ATS scanners that rely on plain text to parse information.
4. Lack of keyword optimization: The resume lacks standard keywords that align with specific job descriptions, making it less likely to be picked up by ATS algorithms that match resumes to job postings based on keyword similarities.

This resume is better suited for a personal portfolio or direct human review rather than submission through online job application systems that use ATS.

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2. ATS-Friendly Resume Template #2 - A better example

This resume, while showcasing a strong and engaging personality, still isn't perfect.

Here’s an analysis based on the requirements of applicant tracking systems:

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What works

1. Clear sections: It has distinct sections for work experience and education, which help an ATS to easily identify and categorize the information.
2. Relevant keywords: The resume includes specific job titles and roles like "Head of Content Strategy" and "Growth Marketing Manager," which are relevant to the field and can help match with job descriptions in ATS databases.

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Areas for improvement

1. Professional tone: Phrases like "one of the luckiest SOBs around" may reflect personality but could be seen as unprofessional in a resume context. Plus, informal language might not be effectively parsed or valued by an ATS, which typically scans for more formal, keyword-focused content.
2. Consistent professional language: Descriptions like "I work with awesome clients" or "tedious tasks to a robot" should be revised to a more formal tone and structured to highlight specific skills or achievements in a way that aligns with common industry keywords.
3. Contact information: While the basic contact information is present, it could be formatted more conventionally. For example, including a professional email address would enhance the professionalism and ATS friendliness of the resume.
4. Date and job title formatting: The resume should maintain a consistent format for dates and job titles. For instance, including the exact start and end month/year for all roles and clearly differentiating job titles from the company and location information can enhance ATS parsing accuracy.

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Additional recommendations

• Quantifiable achievements: Instead of broad statements, including specific, quantifiable achievements is beneficial. For example, "increased leads by X%" or "improved content engagement by Y%" can provide clear metrics for ATS systems and hiring managers.
• Skill section: Adding a dedicated skills section with specific technical and soft skills relevant to content marketing could improve ATS matching. This section should include industry-relevant skills like "SEO," "content automation," and "digital marketing."

To enhance ATS compatibility, you should always use a more formal tone, ensure consistent formatting, and tailor the resume with keywords from the job descriptions to which you are applying.

This will help with ATS systems and ensure the resume appeals to human reviewers in higher-level positions.

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3. ATS-friendly resume template #1 - The best example

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What works

1. Clear format: The resume uses a simple, straightforward layout, which is good for ATS scanning. There are clear headings and sections (Work Experience, Education, Certifications, Skills), which help an ATS parse the information correctly.
2. Relevant keywords: The resume includes industry-relevant keywords such as "technical support," "system administration," "network security," and certifications like "Microsoft Certified" and "Cisco Certified Network Associate (CCNA)." These will likely match the job descriptions, enhancing the resume's visibility in applicant tracking systems.
3. Standard contact information: Including basic contact information at the top (name, address, phone, email, LinkedIn) is standard practice and ATS-friendly. This ensures easy extraction of contact details by an ATS.
4. Job titles and dates: The work experience section lists job titles, company names, locations, and dates of employment. This structured approach helps ATS recognize the progression and duration of employment.

Overall, this is a strong resume with an ATS-friendly template and professional language used throughout.

NOTE: The example above was created in seconds with Teal's AI-Resume Builder. Teal gets you started with ATS-friendly templates and optimization tools you need to stand out as a top candidate.

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The most popular Applicant Tracking System software

Applicant tracking systems come in various forms, with different features and capabilities tailored to meet the needs of diverse organizations.

While the core functionality remains consistent—streamlining the recruitment process and facilitating candidate evaluation—each ATS offers a unique set of tools and integrations.

Here are five of the best applicant tracking systems available:

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1. Workday

Key features

Workday's ATS boasts a user-friendly interface, robust reporting capabilities, and seamless integration with other Workday modules, such as Human Capital Management (HCM) and Payroll.

It offers advanced features like configurable career sites, mobile-friendly applications, and AI-powered candidate matching.

Benefits

Workday's ATS excels in providing a comprehensive, end-to-end recruitment solution. Its tight integration with other Workday products ensures a smooth transition from hiring to onboarding and employee management, reducing data silos and streamlining processes.

Pricing

Workday does not offer a free plan. Pricing is quote-based and varies depending on the organization's size and specific requirements.

Best for

Large enterprises seeking a unified platform for recruitment marketing, talent management, and HR operations.

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2. Taleo

Key features

Taleo, now owned by Oracle, offers a comprehensive ATS with robust sourcing tools, customizable career sites, and advanced analytics.

It integrates with Oracle's HCM suite and features like social recruiting, candidate relationship management, and onboarding capabilities.

Benefits

Taleo's strength lies in its scalability and ability to handle high-volume recruitment needs. Its advanced search capabilities and AI-powered candidate matching make it easier to identify top talent from large pools of applicant data.

Pricing

Taleo does not offer a free plan. Pricing is quote-based and can vary significantly based on the organization's size and specific requirements.

Best for

Large corporations and enterprises with high-volume hiring needs, particularly those already using Oracle's HCM suite.

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3. TargetRecruit (for Salesforce)

Key features

TargetRecruit one of the most comprehensive staffing and recruiting solutions with a suite of features that cater to every aspect of the recruitment process. Its Front Office component is a fully configurable recruitment software that streamlines sourcing, engaging, and placing candidates efficiently.

This end-to-end system is designed for agility, ensuring recruitment workflows are optimized to fit various hiring scenarios.

Benefits

The CRM & Business Development functionality uses Salesforce's platform to redefine how staffing firms manage interactions throughout the customer and candidate lifecycle, enhancing business relationships and catering to specific needs and preferences.

This integration with the world's leading CRM (Salesforce) ensures you're prioritizing the best candidates.

Pricing

Plans start at $175 per month.

Best for

Ideally suited for staffing and recruiting firms that desire a high degree of automation, customization, and integration with their recruitment technology.

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4. iCIMS

Key Features

iCIMS offers a comprehensive ATS with a user-friendly interface, robust reporting capabilities, and advanced features like AI-powered candidate matching, video interviewing, and onboarding tools.

It also integrates with various job boards and HR systems, making it an excellent candidate relationship management software.

Benefits

iCIMS' strength lies in its flexibility and scalability. It can be easily customized to meet the unique needs of different organizations, from small businesses to large enterprises.

Its reporting and analytics capabilities also provide valuable insights for recruiting teams.

Pricing

iCIMS does not offer a free plan. Pricing is quote-based and varies depending on the organization's size and specific requirements.

Best for

Organizations of all sizes seeking a flexible and scalable ATS with advanced features and robust reporting capabilities.

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5. Greenhouse

Key Features

Greenhouse is a user-friendly ATS that offers a range of features, including job posting, candidate tracking, interview scheduling, and onboarding tools. It integrates with various job boards and provides robust reporting and analytic capabilities.

Benefits

Greenhouse is known for its intuitive interface and ease of use, making it a popular choice for small and medium-sized businesses.

Pricing

Greenhouse offers a free plan for basic ATS functionality, as well as paid plans with additional features and support.

Best for

Small to medium-sized businesses seeking an easy-to-use ATS with basic recruitment capabilities and job board integrations.

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The future of Applicant Tracking Systems

As the job market evolves, so will applicant tracking systems.

Here are four key trends and predictions for the future of ATS:

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1. Increased integration with AI and machine learning

ATS technology is poised to become increasingly sophisticated by incorporating artificial intelligence (AI) and machine learning. These technologies will enhance ATS's capabilities in accurately parsing resumes, matching skills, and ranking candidates.

Beyond sorting applications, AI will also play a crucial role in the screening process through mechanisms like video interviews, which can analyze factors like tone of voice and body language.

This trend suggests a move towards more dynamic and intelligent systems that can adapt to the nuances of candidate profiles and job requirements more effectively.

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2. Emphasis on soft skills assessment

While traditional ATS systems have heavily focused on hard skills and keyword matching, the future will likely see a significant shift toward evaluating soft skills, such as communication, problem-solving, and emotional intelligence.

Future ATS may require candidates to complete specific assessments or provide detailed examples demonstrating these crucial competencies.

This evolution reflects a broader recognition of the importance of soft skills in the workplace and the need for tools that can effectively assess these less tangible qualities.

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3. Seamless candidate experience

The next generation of ATS will prioritize enhancing the candidate experience to make it as smooth and user-friendly as possible.

Expect to see features like:

• Mobile-optimized application processes
• Chatbots to instantly answer applicant queries
• Integrated video interviews

These improvements would reduce friction for applicants, thereby attracting a broader pool of potential candidates, and improving the perception of the employer's brand and culture.

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4. Enhanced data privacy and security measures

As applicant tracking systems collect and process increasingly sensitive personal data, there will be a heightened focus on ensuring data privacy and security.

Future ATS will likely incorporate advanced security protocols and compliance measures to protect candidate information. This could involve more robust encryption methods, secure data storage solutions, and regular audits to comply with international data protection regulations.

Enhancing trust and safety will be crucial as the use of ATS expands and as more data is handled digitally.

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Write custom ATS-friendly resumes with Teal

Navigating the job market can be intimidating, especially when faced with the challenge of making your resume stand out in a sea of candidates. But what if you had a tool at your disposal that ensures your resume is ATS-friendly?

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Why choose Teal?

Teal's AI Resume Builder is designed to improve your resume’s effectiveness and help land you a job. Here’s how it works:

• Import your resume fast: Quickly import information from an existing resume or LinkedIn profile to kickstart your new resume.
• Pick a professional template: Choose from templates designed to be ATS-friendly and customize them to your taste. Adjust fonts, colors, layouts, and more to match your personal brand.
• Leverage AI-powered enhancements: Use AI to craft impactful achievements, compelling professional summaries, and personalized cover letters, tailored to each job application.
• Optimize with Matching Mode: Evaluate your resume's effectiveness and tailor it to job descriptions, ensuring you highlight the skills and experiences that matter most. This is the type of keyword matching that gets your resume prioritized by ATS software.

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Your resume is often your first impression on potential employers. Make it count with Teal.

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Using ATS to your advantage

Understanding how applicant tracking systems work, and optimizing your resume accordingly, is absolutely necessary in today's competitive job market.

By following the strategies outlined in this guide, you can increase your chances of getting your resume noticed by the next hiring manager or team (managers, recruiters, HR, etc.).

Teal's AI Resume Builder is a powerful tool for creating an ATS-friendly resume that showcases your qualifications and experience in the best possible light. With its advanced matching capabilities and ATS-optimized formatting, Teal can give you a competitive edge in the job application process.

Don't let the applicant tracking system be a barrier to your dream job.

Take control of your job search today by trying Teal's AI Resume Builder for free. Unlock your potential and land the job you deserve with a resume that stands out from the crowd.