What is an Applicant Tracking System (ATS)?

Agencies manage many jobs at a time and will receive a high volume of resumes for just one job ad. An applicant tracking system is a software application that helps recruiting agencies organize these resumes and candidates for hiring purposes.

As implied in the name, an ATS tracks potential candidates through the hiring process and aims to make this easier for the recruiter while keeping the candidate informed of the status of their application.

An ATS also automates an agency’s recruiting operations and provides a central repository for collecting candidate information—including resumes and applications. Using automation and screening functionality, an ATS helps recruiters narrow the applicant pool and highlights the top candidates for the job. It does this by using artificial intelligence-type algorithms that analyze the applicant and match their background to the job description.

At its core, an ATS helps you better manage every stage in the recruiting process, from posting a job opening to collecting applications and hiring, all while delivering greater overall efficiency and streamlining your hiring process.

An applicant tracking system can sometimes be confused with recruiting software, but there is a difference. Click below for a more detailed overview.

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applicant tracking system guide

How Do Applicant Tracking Systems Work?

Applicant tracking systems track your candidates’ activity, automating all stages that would otherwise require manual data entry. A good ATS will track all activity from the candidate’s resume in your inbox through final placement (and beyond), freeing up your recruiters to focus on building relationships. Because the applicant tracking system captures all of this data in real-time, you can also use it for real-time reporting to learn how to improve your processes.

There are seven main stages in the recruiting process that an applicant tracking system will help agencies complete more efficiently:

1. Create the job
2. Post the job on job boards, your website, and social media sites
3. Allow candidates to apply where the job was posted
4. Receive applications as well as screen and rank those applications
5. Store candidate data
6. Interview candidates online or in-person
7. Hire the best candidate

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key features

Features in an Applicant Tracking System & CRM

Each ATS may vary based on software provider, but a good ATS that can integrate with a CRM typically offers the following:

Applicant Tracking: Centralize your candidate management, jobs, and tasks streamlining the recruitment process and optimizing team productivity.

Integration with Your CRM System: Break silos between account management and recruiting and gain visibility into your customers’ changing needs with a mobile CRM purpose-built for recruitment.

Email Integration: Automatically upload resumes, add notes, easily create tasks from your Outlook or GMail and automatically track all emails in your ATS.

Dashboard Reporting: Transform your team’s activity into actionable business insights with configurable reports tailored to your specific goals and KPIs.

Relationship Intelligence: Track all email activity associated with a particular candidate record and update that record in real-time, offering a complete view of your candidate interactions and relationships.

Candidate Engagement: Allow job seekers to easily find and apply to your open positions – then leverage mass mailing to engage with the top candidates.

Why Do You Need an Applicant Tracking System?

94% of recruiting professionals say their applicant tracking system has positively impacted their hiring process.

Finding and placing the right talent is becoming more difficult in a market impacted by talent shortages. An ATS can help recruitment agencies and organizations find, hire, and retain strong candidates. A good ATS has the power to overhaul your entire recruiting operation into the most productive, profitable, and efficient business it can be. With proper implementation, they increase recruiter productivity, save time, and provide organization and structure for your recruiting operations. Agencies that use an applicant tracking system report more placements and more productive time than agencies that don’t.

Who Uses Applicant Tracking Systems?

Most large corporations and almost all recruiting agencies use an applicant tracking system to help them with the hiring process. The job applicant won’t know that their application is managed through an ATS as they will submit their application on a job board, website, or social media site. Only the end user will see the ATS interface. Typically, the end user will be the recruiter who uses the system to track and manage candidates through the recruitment process. If the applicant tracking system offers reporting tools, Recruiting Managers, Directors and CEOs often use them to get an overview of overall and individual performance.

Top Benefits of an Applicant Tracking System

There are many benefits to agencies using an applicant tracking system to manage their recruitment process, including:

  • Maximizing recruiter performance with clear workflows and easily accessible information, making faster placements and increasing margins.
  • Providing a better candidate experience, increasing retention and redeployment rate.
  • Creating a single source of truth for all candidate information, enabling recruiters to connect with a candidate in real time to increase engagement and retention.
  • Making better business decisions leveraging key metric reporting from the desk- to executive-level.

How to Choose the Best Applicant Tracking System for Your Business

Define the problem you’re trying to solve.

It is important to fully understand what problems you are trying to solve by adopting a new ATS. Identify the major pain points you’re experiencing with your current solution and what negative effects those are having on your business outcomes. This key step will help you understand which solutions will provide the most value for your business.

Diagram your workflow.

Carefully think through every step of your recruiting cycle and what capabilities you expect from your ATS in each one. In doing so, make sure to consider everyone who will be using the ATS. One solution will not likely fulfill every need perfectly but prioritize the most important things to ensure your chosen ATS can provide the features and functionality critical to your business.

Research your options.

Once you know what you are looking for, speak with multiple software providers about their ATS offerings. Take advantage of free trials and demos and get quotes to price out each option. Also, make sure to get a firm understanding of the implementation and rollout process of each offering. During your search, ask as many questions as you need and use your pre-determined feature and functionality checklist to evaluate how well each offering fits your organization’s needs.

How Much Do Applicant Tracking Systems Cost?

Most ATS providers offer various packages based on a business's size and complexity.

The Future of Applicant Tracking Systems

Applicant Tracking Systems have come a long way over the past 15 years and continue to improve and evolve. When they were first introduced to the market, they supported simple, routine tasks. Now they’re an integral part of a recruiter’s job and can integrate with other powerful systems that allow firms to automate, report, and so much more.

The future of the applicant tracking system will likely be about fine-tuning the existing functionalities and features. It will use enhanced artificial intelligence and automation, and focus on simplifying the recruiter and candidate process in further. The ATS will continue to center around:

  • Improving the candidate, client and recruiter experience.
  • Providing a complete digital transformation of businesses where technology will maintain most administrative tasks.
  • Integrating with other systems without needing multiple logins, tabs or screens (a unified digital experience).

Related Terms

Related Terms

Recruiting Software

Recruiting Software helps recruitment agencies and organizations improve the hiring process and helps agencies hire more efficiently on a large scale. There are various software solutions for the same purpose with different features, interfaces and functionalities, but most offer functionalities such as sourcing and attracting candidates to screening resumes and sending out offer letters.

Recruiting Software is often called an ATS, however, these are not precisely the same. Recruiting Software encompasses an application tracking system but often offers other tools focusing on the hiring process, such as automation tools, marketing systems and reporting functionalities.

The basic functionalities of recruiting software can be found below:

Sourcing: Sourcing will help the recruiter find and attract potential candidates. This is highly valuable to target passive candidates (those who aren’t currently engaged in a hiring process) and may not have seen job adverts from the agency.

Engagement: Candidate engagement features streamline and automate the communication between the candidate and recruiter. The candidate will be up-to-date with the hiring process, which provides a better experience for both the candidate and recruiter as it improves communication and takes some of the administrative tasks away.

Screening: With screening tools, the recruiter can speed up the process of qualifying candidates from a pool of applicants. Some software providers will offer artificial intelligence screening, assessments, evaluations and more.

Onboarding: Some agencies choose a recruiting software that can help them improve the hiring experience with onboarding software. Learn more about onboarding software here. Often, the onboarding software will help set the candidate up for success, minimize administrative tasks and create a positive experience from the beginning.

Essentially, recruiting software aims to make the life of a recruiter easier and helps with the bottom line by removing or minimizing administrative tasks, streamlining engagement and maintaining good data hygiene.

Find the Best Recruiting Software

HR Software

HR Software (Human Resources Software) is a system that aims to support various HR activities. It combines recruitment, payroll, administration, employee information and performance management all in one central system.

HR software is used to organize employee data securely and streamline processes and HR activities such as recruitment, hiring and onboarding, absence management and, in general, help effectively manage employees.

Even though closely related, there is a difference between recruiting and HR software. Recruiting software specifically focuses on optimizing the sourcing and recruiting process while HR Software goes beyond this to help track employee information, payroll and administration.

This is why recruitment agencies tend to use recruiting software and corporations tend to use HR software. Of course, this is not always the case and depends on the business.

CRM Software

A CRM (Customer Relationship Management) system helps agencies manage their relationship with potential and existing candidates and clients and offers a seamless experience to all who work and enter the system. A CRM aims to help agencies build and improve candidate and client relationships to better the customer experience and increase sales and profitability.

A good CRM will facilitate collaboration between teams and function as the one-source-of-truth where employees can easily access and update information about a client’s and candidate’s journey.

The difference between an ATS and CRM is that an ATS aims to streamline the sourcing and hiring of candidates by minimizing administrative tasks; it’s a workflow and tool for managing applicants. A CRM aims to store data and manage passive and active candidates and clients, ensuring all information is up-to-date.

Most recruitment agencies will invest in a CRM & ATS that integrate or come as an all-in-one solution ensuring a seamless experience for candidates, clients, and recruiters.

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