How Does an Applicant Tracking System Work?—A Beginner’s Guide to ATSs

An Applicant Tracking System (ATS) is a software program designed to simplify and manage the entire recruitment process, from sourcing potential candidates to extending job offers and onboarding new hires. This software enables employers to move applicants through the hiring funnel effortlessly while keeping track of all relevant data. With automation and collaboration features, an ATS can streamline the recruitment process to help employers identify and hire the best candidates for their job openings.

Before ATSs picked up steam, recruiters had to resort to manual and repetitive tasks that took endless working hours. Dozens of emails were exchanged daily, and candidate data was scattered around countless spreadsheets. 

As technology evolves, so does recruitment software—nowadays, there are many ATS options on the market. With AI and automation, recruiters can now perform tasks with minimal effort, allowing them to simultaneously and effectively manage a high volume of candidates.

ATSs are becoming increasingly popular with businesses of all sizes and industries. Around 99% of Fortune 500 companies use it today, and its market share is expected to double by 2030.

Source: Spherical Insights

In this article, we’ll answer all the burning questions about ATSs, including:

• How does an applicant tracking system work?
• What’s the difference between an ATS and a CRM system?
• What are some typical features of an ATS?
• What kind of benefits do ATSs bring?

We’ll also touch on Workello, a simple and affordable solution developed as a result of years of experience dealing with real-life recruitment problems.

What Is the Primary Purpose of an Applicant Tracking System? 

According to Harvard Business Review, recruiters, on average, spend 4 hours toggling between applications. And this is just one of many repetitive and time-consuming tasks they need to deal with on a daily basis.

An ATS can eliminate the need for such tasks. It can do everything from collecting and scanning resumes to analyzing key metrics to provide valuable insights. With a few clicks, you can access all applicant data and automatically trigger different stages of the hiring process.

As a result, companies don’t have to hire an entire team of recruiters to keep up with the rising demand. They can use an ATS and effortlessly manage thousands of candidates from multiple sources.

When not burdened with manual labor, recruiters and hiring managers can focus on more important work, such as building rapport with the best candidates and optimizing the candidate experience.

ATS vs CRM—What’s the Difference? 

Applicant tracking systems and customer (or candidate) relationship management (CRM) systems share many similarities. They’re both used in recruitment, but their purpose and function are typically different.

An ATS is all about simplifying and accelerating the hiring process and the recruiters’ workflow. It helps you fill vacancies quickly by allowing you to distribute ads on various job boards and social media, view and filter data, move applicants through different stages of the hiring funnel, and ultimately make the best hiring decisions. 

A CRM system can also be used outside of the recruitment context. It’s designed to help manage interactions with customers, leads, and prospects (in recruitment, prospects and customers are actually candidates, active or passive). These platforms let you create communities and nurture relationships that might someday boost the company’s sales or revenue.

Source: PageUp

All in all, both types of software allow you to communicate with potential candidates, but in different ways. They’re equally significant, and businesses often use them simultaneously.

The following table should help you understand the core differences between ATS and CRM systems:

Main Features of an Applicant Tracking System

An ATS can streamline every stage of the recruitment funnel, from job ad creation and posting, all the way up to onboarding. In the following part, we’ll break down some of the most common ATS features, stage by stage.

Job Posting and Distribution

One of the most sought-after ATS features is job posting, as reported by Software Advice.

Source: Software Advice

Here are the most common ATS functionalities related to job advertising:

1. Creation—An ATS allows you to create listings and save templates for later use
2. Posting— You can set up an automatic posting schedule, which helps you publish ads always at the right time
3. Performance insights—Refer to the real-time analytics to track the progress of your ads and identify areas for improvement

All the best job boards on the market, such as Indeed and LinkedIn, as well as some social media networks, can integrate with ATSs. 

When candidates apply, the system collects their data, sorts it, and stores it with that of candidates from other channels, making it easily accessible to recruiters. 

If writing job posts is not your strong suit, check out Workello’s extensive library of expert-crafted job descriptions, which are fully customizable. Before publishing an ad to your favorite job boards, attach Workello’s unique application link to it. That will ensure that all applications arrive to you in the same format, regardless of the source.

Resume Parsing and Candidate Data Storage

An ATS can automatically store and organize all applicant data. You can find all the information you need in one place, along with the applicants’:

• Status
• Contact info
• Resume
• Communication history
• Assessment results

You can also typically search the database and apply various filters. 

Even if you’re sourcing passive candidates, the system might be able to fetch the available data and create a profile in the central database.

When it comes to resumes, an ATS can:

1. Scan them for keywords
2. Extract the necessary data
3. Compare it with the required job qualifications
4. Rank the candidates based on how well they match the ideal job profile

Although these algorithms are still imperfect, they can save you a lot of time. They can filter out candidates who don’t meet any or some of the requirements and shortlist those who do to aid decision-making.

Application Tracking and Status Updates

Recruiters can change the status of each applicant in the system as they move down the funnel. That triggers automatic actions, such as pre-hire assessment invitations and interview scheduling. 

The hiring team can typically collaborate on decisions and leave notes and comments on applicant profiles. Some ATSs even have portals where candidates can track the status of their applications.

For instance, Workello gives each applicant a personalized live status page where they can find all the information they need, including the expected timeline. Such transparency can significantly improve candidate experience and prevent you from having to answer numerous unnecessary questions. 

Candidate Communication and Scheduling

With automated responses, communication with applicants has never been easier. All the information is laid out for them to see. There’s no confusion and no need to exchange dozens of emails anymore. 

With Workello, you can craft your own responses or use one of our pre-written templates:

1. Instructions
2. Assessments
3. Rejection letters
4. Job offers 
5. Interview invitations 

Regarding interview scheduling, you can include a link to your calendar in the invitation email. The applicant then selects the time slot they want, after which both parties get a confirmation email and a reminder.

Reporting and Analytics

An ATS can also analyze the data on numerous metrics, such as the number of applications and accepted offers, time and cost to hire, and much more. Some will generate reports, while others will provide real-time updates in visual dashboards.

In any case, you can get an insight into the effectiveness of your job advertising and recruitment strategy. When you know what the current and potential bottlenecks are, you can easily optimize the process.

Benefits of Using an Applicant Tracking System

Source: GetApp

Some of the most notable benefits of applicant tracking systems include:

• Increased efficiency and productivity—With automation and data centralization, the recruitment process runs smoothly and entails less effort
• Reduced time and cost to hire—Recruiters and hiring managers can save a lot of time and resources by using an ATS
• Superior candidate experience—Timely updates and intuitiveness of the process significantly contribute to a positive candidate experience
• Data accuracy and compliance—There’s no need to worry about errors and technical or legal issues
• Recruitment metrics and reporting— An ATS can generate actionable reports to help you streamline the process further

What You Need to Know Before Choosing an ATS

ATSs can be highly effective tools for filling your vacancies with top talent. Still, if you opt for one that’s unsuitable for your business, you won’t be able to reap its benefits, and your money will be wasted. Here are some factors to consider when choosing your ATS:

Final Thoughts

An ATS can be a game-changer, taking your recruitment practices to the next level. Achieving efficiency has never been as easy as it is today. And with so many options, you can most likely find an ATS that meets your exact needs, regardless of the size or budget of your organization.

Workello is a simple and affordable solution to all your recruitment concerns. With expert-made assessments that you can distribute in a few clicks, you can easily identify the top 1% of candidates. At the same time, keep them engaged with live status updates and automatic notifications. Sign up for Workello’s free trial and explore all the ways it can elevate your recruitment process.