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What is an applicant tracking system?

An applicant tracking system is a type of software used by recruiters to filter, manage, and track candidates as they move through the hiring process.
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Although every organization is different, they all depend heavily on the same foundation: top-quality employees. Without the right people supporting and facilitating company processes, acting as liaisons to your customer base, and providing strategic direction within your teams and departments, your business may as well be dead in the water. Unfortunately, finding the best candidates can be difficult, and guiding them through the hiring process is even more so—particularly when you’re dealing with a large number of potential hires and positions.  

An applicant tracking system (ATS) provides capabilities designed to optimize how employers and recruiters approach talent acquisition. With ATS solutions, companies of all types and sizes can more easily locate, onboard, and retain the kinds of talent that drive business success. Combining data functionality with a full suite of tracking and management tools, the best applicant tracking systems function as all-in-one recruitment resources, and can even automate many aspects of the hiring process. 

“Applicant tracking systems” describes a broad range of recruitment tools, from simple applicant databases to full-service, end-to-end solutions. That said, many ATS tools follow a similar set of processes and include similar base functionality:

Parsing and storing information

The most fundamental function of an applicant tracking system is to store applicant information for easy retrieval. When a potential hire submits a resume, the ATS analyzes the information contained therein for relevant data which is then automatically parsed into a centralized database. This information will likely include the applicant’s name, work experience and contact information, which can then be searched or browsed by recruiters.

Pre-screening applicants

One of the biggest time sinks for recruiters is going through thousands of resumes to weed out applicants whose qualifications make them a poor fit for the position. ATS tools help automate this process. Using customized parameters (such as work history, skill sets, certifications, salary requirements, etc.) the ATS can be set to automatically reject those applications that do not match minimum eligibility requirements. Those applicants who meet the established criteria are permitted to move forward to the next stage of recruitment.

Ranking and prioritizing candidates

With unqualified and ineligible resumes eliminated, the ATS can then get to work ranking the remaining candidates. It does this by comparing the applicants’ work history and experience against the job description. The candidates are automatically prioritized based on how closely they match the proposed ideal choice. Recruiters can finetune ranking parameters to better refine their top options for the position. This allows them to optimize their time by only following up with those prospective hires that are most likely to fit the needs of the company.

Applying tags and keywords

Finally, ATS solutions further optimize applicant database management by improving resume search function. The ATS can automatically tag resumes with relevant keywords related to location, employment history, experience, skills, and more. Recruiters can easily sort through their available options by searching for specific terms within the system.

As with most business tools, the primary reason for using an ATS is to improve the accuracy and efficiency of certain functions within your business. More specifically, applicant tracking systems automate and streamline many essential aspects of recruiting. This provides certain key advantages, including:
Graphic outlining the 5 benefits of the applicant tracking system

Improved quality of hires

The goal of any hiring manager should be to not only find someone to fill an open position, but to find the right someone for the position. By acting as a gatekeeper to block ineligible resumes from reaching the recruiter, the ATS refines the company hiring pool to include only the best candidates. AI capabilities can further help businesses create a clearer picture of the ideal candidate, which helps hiring managers find the right person for the job. Pre-vetted hires are more likely to become strong-performing employees, improving the company’s net hiring score (NHS) in the process.

Increased engagement

Candidates aren’t automatons mindlessly shuffling their way through the recruitment pipeline; they are dynamic, unique individuals that often require assistance, support, and encouragement along their journey to employment. ATS tools ensure that potential hires get the support they need right when they need it, improving engagement and eliminating the risk of candidate neglect.

Improved efficiency

Recruitment is an investment. When done properly, the returns of bringing in the new employee offset the cost. Unfortunately, time consuming processes, human errors, and poor collaboration between stakeholders slow the process, resulting in increased cost-per-hire and time-to-hire. Applicant tracking systems increase visibility, improve collaboration, and eliminate bottlenecks in the pipeline, so your organization can enjoy a better return on your hiring investment.

Streamlined hiring and onboarding

Hiring isn’t technically over until the new hire is fully up to speed and providing optimal value to the company. ATS not only helps optimize the hiring process but can also streamline onboarding by automatically providing new employees with all the documentation and support they need to get going.

The benefits listed above depend on the capabilities and features of the applicant tracking system. When approaching an ATS solution, consider these crucial elements and what they can bring to the table:

  • Advanced search 
    A database is only as effective as your ability to retrieve information from it. Built-in search functions and filter views allow you to find the information you need with minimal effort. 

  • Resume parsing 
    ATS makes it possible for hiring managers to distill resumes down into their most relevant information, at scale. 

  • Candidate sourcing 
    Even before prospective hires apply for the position, ATS tools can optimize candidate sourcing through improved brand management, automated job postings, integrated application pages, and more. 

  • Resume screening 
    In many cases, the majority of submitted resumes may not meet the position’s minimum eligibility requirements. Applicant tracking systems can be set to automatically eliminate these resumes based on a variety of skill- and certification-related factors.

  • Automation 
    Traditional recruiting is extremely hands-on, with many manual processes and approvals. Automation in ATS addresses many of these time-consuming tasks, so recruiting teams and others involved in the hiring process can focus on more-strategic concerns.

  • Analytics and reporting 
    It has been said that there is no improvement without measurement. ATS tools should include robust analytics and reporting features, so that your people can identify possible problem areas and track the benefits provided by the applicant tracking system. 

  • Onboarding support 
    The best applicant tracking systems also provide onboarding support, helping new hires get up to speed as quickly as possible.

Although applicant tracking systems provide valuable support in locating, refining, tracking, and managing possible hires through the recruitment pipeline, sometimes they suffer from certain limitations. Left unchecked, these constraints may result in top talent being overlooked or incorrectly marked as ineligible. These may include:

Can only effectively work with resumes the ATS deems legible

Resumes can come in many distinct types and styles. If the application includes unique fonts or presents information in a structure that the ATS is unfamiliar with, it might reject the resume without being able to take principal factors (such as work experience and skill sets) into account.

May have a challenging time accurately reading certain document types

As with any computer system, ATS tools can only work with specific, recognized document types of information. If the candidate submits a resume with an unrecognized or unsupported file extension, it may likewise be automatically rejected.

Might not be capable of working with graphics

While visualization allows human users to comprehend data more fully, it can have the opposite effect on non-human systems. ATS tools may be incapable of fully translating graphical data into their systems.

May categorize data incorrectly

There are many ways of saying the same things, and if candidates use different terminology in describing their work history, skill sets, certifications, or other relevant information, the ATS may have difficulty parsing, categorizing, and prioritizing the resume.

Your employees define your success. As such, how you approach recruiting and onboarding has a significant impact on your business. Applicant tracking provides essential database support while also making it possible to automate important steps in the hiring processes. But not every ATS solution is equal. For optimal support and intelligent automation, consider ServiceNow.

ServiceNow is an employee experience platform built on the powerful, fully integrated, centralized ServiceNow Platform® and provides a seamless, satisfying employee experience from first contact through final offboarding. Connect all relevant stakeholders and promote easy, clear communication and collaboration. Provide unmatched visibility into the hiring process, tracking metrics and generating reports at the push of a button. Apply advanced AI to support automation features throughout your pipeline. And through it all, create positive experiences for candidates and hiring managers alike. 

Take your hiring processes further than ever before; demo ServiceNow today!

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