What Are Applicant Tracking Systems and Their Best Practices

January 08, 2024 by Rebecca Ahn

In today’s modern working world, the job application and interviewing process has become more technologically advanced. Resumes are still the go-to method for summarizing an applicant’s skills and experience in order to land a new job. However, the introduction of software applications like Applicant Tracking Systems (ATS) has made this task more streamlined and yet complex at the same time, for those on both the applying and hiring sides of the process.

Now, even if an applicant has all of the required skills, experience, and know-how for a specific position, their resume may get passed over before it’s ever seen by a human. Thanks to Applicant Tracking Systems (ATS), their resume has to do more than merely summarize their past experience. It needs to be optimized to get past the ATS and into an actual hiring manager’s hands.

Likewise, recruiters and hiring managers need to be aware of how to best utilize their chosen Applicant Tracking System for tracking and reviewing those resumes, so as not to miss out on any potentially great candidates. 

In this article, we will explore:

  • What is the Applicant Tracking System and how it works
  • The advantages and disadvantages of ATS
  • The benefits and best practices for using ATS
  • The impact of ATS on outplacement services

What Is the Applicant Tracking System?

Let’s start by taking a look at what are Applicant Tracking Systems and how they work. Applicant Tracking Systems–also known as ATS–are a way for employers to quickly filter through resumes in applications they’ve received for a job opening they have posted.

While there are many different Applicant Tracking Systems on the market that work in various ways, the most common ones work by examining resumes for specific keywords, much like a search engine crawls web pages for keywords to determine their relevance when someone types in a search query. Considering how many websites, pages, and posts there are online, there needs to be a way to rapidly digest and analyze that massive amount of data, or we’d never be able to find anything on the web.

Google and other search engines crawl the internet–using an algorithm designed to look for keyword density and other metrics–to serve up specifically relevant pages when you search for specific terms, while hiding the ones that don’t fit what you’re looking for. Applicant Tracking Systems do the same thing, but instead of finding the most relevant websites, they find the most relevant candidates out of a large number of applicants. 

When you think about it, the search engine example is a very apt comparison. Given how many resumes one job posting may receive these days, it’s essential to have a way to digest and review the often huge amount of applications to determine the most suitable ones as quickly as possible. 

Let’s dive into this a bit further and discuss the advantages, like this, as well as the disadvantages of using Applicant Tracking Systems.
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What Are the Advantages and Disadvantages of ATS?

Applicant Tracking Systems come with many advantages, especially for employers. However, they also have their disadvantages which employers and recruiters need to be aware of. 

Organizations use Applicant Tracking Systems for a number of reasons. These systems can significantly improve a company’s hiring processes, saving their employees’ time and streamlining their processes. However, they also come with some challenges that can make finding the right candidate for the job more difficult, which can hurt the employer as much as the individuals applying for the role. 

To understand the best way to utilize Applicant Tracking Systems, we need to start by breaking down their most significant pros and cons. 

What Is the Primary Advantage of an ATS?

When a new job opening gets posted, the process of applying online has become so easy that some organizations may receive hundreds or even thousands of applications. This can get increasingly difficult for a hiring manager or small hiring team to wade through them all. Couple that with the common temptation for applicants to apply for a job that they might not be completely qualified for, and the task becomes even more taxing for those reviewing all the applications.

This is where Applicant Tracking Systems really shine. The ATS automates this time-consuming part of the hiring process, which is a huge advantage for busy recruiters. When a large number of applications are from individuals who don’t have the skills and experience needed for the job, then an ATS can be a godsend at quickly weeding out those unqualified candidates without taking up the recruiters’ valuable time.

This speedy process is the most significant advantage of using ATS. As we explained, Applicant Tracking Systems can crawl a huge number of resumes in a very short period of time, like a search engine, and serve up the ones that best fit the designated criteria and keywords. This can save a great deal of time for recruiters and hiring managers, which can then save a great deal of money for the larger employer. 

What Is the Primary Disadvantage of an ATS?

While the advantages discussed above can be very helpful for saving an employer’s time and money, it does come with its risks. In order for that crawling process to yield helpful results, the hiring team needs to be very careful in choosing what criteria and keywords the ATS should crawl for. It will find what you tell it to, so the onus is on the hiring managers to make sure those specifications are as accurate and comprehensive as possible.

Perhaps the most significant disadvantage of an ATS, however, falls on the other side of the hiring process. Using ATS in your recruitment can hurt potential applicants looking for work, putting even those that do have the correct skills at a disadvantage if they do not know how to optimize their resumes for the ATS software. 

This means an employer looking for a new hire may still miss out on high potential candidates, even after carefully selecting the ATS criteria for their open role. It complicates the art of resume writing, as individuals need to think about which keywords, phrasing, and formatting will get their resume past the ATS filter and into the “interview” pile. 

This is important for employers to be aware of and watch out for whenever applicable, such as when hiring for a job opening in the company, or when supporting their current employees with finding a new job placement elsewhere.

What Are the Benefits of ATS in Recruitment?

Now that we understand both sides of the ATS coin–the pros and the cons–let’s dive deeper into the benefits of using ATS in the recruitment process. Most large companies use Applicant Tracking Systems to help narrow the search for applicants by examining the resumes they receive for specific keywords, which can thin out the pile considerably. Afterward, the hiring manager has a far easier time looking through the selected resumes for the ideal candidate.

It isn’t only large companies either. Small to medium businesses are also jumping on the ATS bandwagon due to the considerable time and cost savings they can provide. Using an ATS for recruitment can save a small company with only a handful of employees thousands of dollars in tedious time and effort. Naturally, the potential savings scale even more for bigger companies. That money motivation means that Applicant Tracking Systems are only going to become more prominent in online recruitment.

In order to take full advantage of these ATS benefits, employers need to carefully consider which ATS software to use, as well as some best practices for both setting it up on their end and guiding applicants on the other end.

What ATS Systems Do Recruiters Use?

Which ATS program you choose can impact how fruitful your recruitment process will be. So you might be wondering what are the best applicant tracking systems for your organization? 

Let’s take a look at the five most commonly used ATS and how they each differ in their application and resume reading methods. 

Taleo: This is the most popular Applicant Tracking System powered by Oracle, which allows recruiters and hiring managers to search the database by the applicant’s location. While searching by location is pretty standard among ATS, Taleo is unique in that it uses zip codes specifically.

Greenhouse: This ATS is used by many major companies, including Airbnb and Pinterest. The way this ATS reads resumes is by looking for information in three specific categories for each job listed–company name, position title, and dates of employment–in that order. This means applicants who don’t include the full company name, position title, and dates of employment (including month and year) in this order may not have all their information properly parsed out by this ATS.

iCIMS: Like Taleo, this ATS sets itself apart by location search. However, this ATS makes location searchable by city name rather than zip code. So resumes that include both city name and zip code will be extra searchable for this, and most other, ATS.

BambooHR: This ATS does not allow hiring managers to search by keyword to the same extent that many others do, which means recruiters will likely have to read through applicants’ resumes the old-fashioned way.

Jobvite: Used by other big companies like LinkedIn, Hulu, and Logitech, this is one of several ATS that prefers non-abbreviated keywords. For example, if your job opening is for an SEO expert, Jobvite might prefer “Search Engine Optimization Expert” instead. When in doubt, job descriptions and resumes should use both the unabbreviated version and the acronym. In this case, it would be acceptable to use “Search Engine Optimization (SEO) Expert.”

At the end of the day, most of these ATS operate in a similar fashion and will do a similar job of filtering resumes by the essential criteria–such as keywords, location, employment dates, and readability–to find the most fitting applicants. The differences explained above are good to consider if you know your hiring process will want to focus on any of those distinctions. But beyond that, you’ll want to keep in mind the general advantages, disadvantages, and benefits of using an ATS program in order to make the right decision for your recruitment.

Then, once you choose which ATS is right for you, the next step is to follow some basic best practices when implementing and using that ATS in your recruitment process.

What Are the Best Practices for ATS in Recruitment?

Now we can incorporate these Applicant Tracking System benefits, as well as their challenges to be aware of, into a few key best practices that will ensure the most effective use of ATS in recruitment. Again, one of the best ways to think about this is to apply it to how search engines work, since most people have a cursory knowledge of these.

If you want to rank highly on Google for a specific search term, your web page would need to have a certain density of that term–among other technical aspects–if you ever want it to be served on the first page of search results.

The same thing happens inside ATS programs with job applications. If the job description puts a lot of emphasis on a specific skill set, the resume has to match that emphasis. This requires an employer knowing how to optimize their job description, and an applicant knowing how to optimize their resume for the same criteria.

Let’s review the most important aspects of this optimization that will yield the best results for both sides of the recruitment process.

ATS Best Practices: Keywords

When using ATS for your recruitment, the most important element you’ll need to understand is the keywords you use in the job description and ATS search criteria. 

Start by creating a list of important keywords used in your industry. For ideas, research similar job postings and profiles on LinkedIn, as well as people who hold a position similar to what you’re hiring. 

Remember, keywords are the most important step in helping valuable applicants get past the ATS filters. So make sure the job description copy is rich with keywords that you will want a qualified applicant to have in their resume and application. Use key terms and words frequently across different descriptions and stress their importance when possible.

This starts with the job title. This is obviously extremely important, not only for the ATS system to identify fitting candidates, but also to entice the right candidates to decide whether or not to apply in the first place.

Then the job description needs to be optimized to focus on the keywords that will be most helpful in your ATS search. Every job will require a different keyword optimization, but a helpful tip for all of them is to focus on the skills you are looking for. These are typically laid out in a list on a job post, but it’s also a good idea to work the most important skills into the rest of the description in natural ways that emphasize them further.

It’s also good to include variations of these top skills and qualifications, to ensure the ATS catches qualified candidates no matter which phrasing the applicants use. Say, for example, you are looking for customer service experience. You might use the keyword “customer service experience” in the job description. But what if a qualified applicant’s resume uses something like “customer support specialist” or “experience working with customers” instead? While these are saying the same thing in different ways, their resume still may not get past your ATS if it doesn’t know to also look for all of those variations.

One last keyword best practice is to include geographic keywords in the job description if this is an important factor you want the ATS to filter for. Resumes that mention location information will be filtered for a possible geographic match.

ATS Best Practices: Acronyms

When it comes to industry terms and acronyms, different ATS programs may or may not be able to catch different variations. So for all cases where there is a shortened acronym or a term, try to include both in the job posting and ATS specifications. 

If you’re unsure, it’s often a good practice to write out the full phrase and include the acronym in parentheses afterward, such as with “Master of Business Administration (MBA).” That way, the system is sure to flag qualified applicants no matter which version they use in their resumes.

Similarly, it’s good to include all applicable abbreviations. Abbreviations can be missed if they are not programmed into the ATS. So play it safe by including both the common abbreviations and the full words spelled out completely. For example, you could use popular industry acronyms in the job description, but then spell out the words in parenthesis afterward to make sure this information gets flagged appropriately.

ATS Best Practices: Length

Applicant Tracking System software doesn’t care if a job description or resume is one page or five. In fact, longer length is often better for ATS to make sure it has all the possible relevant information and terms you want it to look for. 

That said, it’s also good to balance this with the best length that will encourage plenty of applicants. Too long of a job posting may discourage people from applying, while too short might make it too easy for less qualified individuals to apply. So determine the right length that feels appropriate for your ideal candidates and contains sufficient information for your ATS to identify. Find the sweet spot that appeals to both human and machine.

On a similar note, since length doesn’t matter to the ATS, remember that some of your applicants may decide to include longer resumes. This is where your ATS will be valuable in saving you time in that first wave filtering through every application and flagging only the top candidates for your team to review. Make sure you have set up your ATS to do a thorough job in this first pass, so you don’t have to worry about going back through and checking what it might have missed later on. 

ATS Best Practices: Formatting

In general, it’s good to aim to keep things simple in regard to formatting and order. Applicant Tracking Systems often have trouble comprehending graphics and charts, especially text withi graphical images, so it might be best to skip them completely. 

Focus instead on using words to thoroughly and clearly paint the picture of what you are looking for in your job posting. Use bolding and/or underlining to highlight key words or phrases you want applicants to pay particular attention to. This will not bother the ATS or affect its crawling criteria. 

Applicant Tracking Systems and Outplacement

It’s also important to understand how an Applicant Tracking System can impact the level of support and services provided to employees already in your organization. For example, ATS can make the outplacement process more difficult for your impacted employees trying to land a new role after a layoff or reduction in force (RIF) event. 

So if you plan to offer outplacement services to your outgoing employees, this will be an important element to navigate. Thankfully, here at Careerminds, we already have a solution for this. 

How Careerminds Tackles ATS

The good news is that tech-focused outplacement providers, such as Careerminds, have figured out ways to help participants navigate around Applicant Tracking Systems. 

When our Careerminds outplacement coaches are helping a participant search for a new job, we take special care to ensure that their resumes are optimized to get past Applicant Tracking Systems and into the hands of a real person.

To do this, we employ technology called Perfect Match, which analyzes and compares job descriptions with participants’ resumes to provide insights into how well the resume aligns and what keywords need to be added to make it match even better.

We take the guesswork out of the equation by using technology. Perfect Match helps us focus on specific terms that will make the difference between a resume being read by a human or ignored entirely. 

Every job requires a different keyword optimization. So the key is knowing where to focus. Similar to optimizing job descriptions for ATS on the employer side, the most important of these for participants to optimize are of course their job titles and skills. 

Job titles are, obviously, very important for hiring managers. They quickly and efficiently show if someone is qualified for a job. Chances are, if someone previously held the same job title as the one they are applying for, they will be able to perform said job at the hiring organization with little to no hand holding. While that seems incredibly obvious, it’s important for participants to optimize their resume job titles to align with what they are applying for.

The same can be said for skills. Though job titles are extremely important, they need to be backed up by a list of skills. As we covered earlier, these skills are typically laid out in a job description. Perfect Match will find these skills and allow our participants to tailor their resume to the wording found in that description.

As you can see, the job application process can all get very technical and detail-oriented. This is where we allow technology to do the heavy lifting for us. It takes out the human error and allows participants in our outplacement programs to more easily be seen by real hiring managers.

Applicant Tracking Systems: Final Takeaways

Applicant Tracking Systems are used by countless organizations to make it easier, faster, and more cost-effective for employers and hiring managers to wade through a massive amount of job applications.

These systems work by examining resumes for keywords that pertain to the specific job posting. The more matching keywords found, the stronger the resume is, and the more likely it will get through the system’s filters and into the hands of a human hiring manager.

On the whole, this is great for hiring managers, though there are some best practices to keep in mind to make sure your ATS doesn’t accidentally filter out any qualified candidates. These include keeping formatting simple, optimizing the length, and including all variations of industry terms, acronyms, and abbreviations in your job posting.

In addition, ATS can be harder on job seekers–such as those searching for a new job after a layoff or RIF event–who may not understand how keyword optimization works and what Applicant Tracking Systems are looking for. 

At Careerminds, we help our outplacement participants take all of the guesswork out of the endeavor by using our Perfect Match technology to find the right keywords and get their resumes past these systems.

Want to learn more about our Careerminds outplacement services with Perfect Match? We’d love to talk:
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Rebecca Ahn

Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.

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