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How Do Applicant Tracking Systems Work? Here's All You Need To Know

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Recruit CRM Published on Jun 2, 2021

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An Applicant Tracking System (ATS) simplifies the hiring process for any HR department. It's one of the most sought-after recruiting tools that help recruiters and hiring managers filter and sort through hundreds and thousands of CVs to locate that one qualified candidate for an open job role. Ever wondered why recruiters do not even see 70% of the resumes? This is primarily because of an ATS that stores, ranks and scores CVs based on main keywords, formatting, job titles, work experience, and so many other factors.

What Is An Applicant Tracking System?

Suppose a candidate applies for the role of a marketing manager at XYZ company. If you think the resume is going to be carefully analysed by a recruiter in the first go, then you're typically wrong. The resume gets first processed by an ATS. Depending on how well your CV is formatted for an ATS algorithm, it will either get rejected or directly reach a recruiter.

With its massive adoption in government bodies and various enterprises due to recruiting automation, its market size is expected to reach 1.81 billion dollars by 2023.

An Applicant Tracking System is programmed to make it easy for the employer to filter resumes, select candidates and reduce time spent on manual tasks. Its main task is to bring to light only the topmost candidates for interview.

Read More: How does a recruitment agency choose an ATS or CRM?

How Does An Applicant Tracking System Work?

how does applicant tracking systems work

You might be wondering how does an ATS actually manage to get things done. Applicant Tracking System for recruiters is generally multi-faceted. It can accomplish all these remarkable feats only because it streamlines the entire recruiting process starting from creating job postings, job ads, publishing them on multiple job boards, screening and sourcing candidates, tracking application statuses etc. Here's an Applicant Tracking System list that might help you shortlist which one to choose based on features and pricing.

Some of the significant features that you're bound to notice in a good software include–

Find out how an ATS works:

1. It Imitates A Human Mind & Scans A Resume For Keywords

There are many misconceptions on how the usage of Machine Learning (ML) and Artificial Intelligence (AI) in recruiting can dehumanise the entire hiring cycle. This is not true since the AI functionality in an ATS is developed and programmed to mimic the human thought process. If a recruiter were to scan a resume manually, he/she would have looked for keywords in the same manner too. An ATS makes this process faster with added functionalities, saving time and money with fewer margins of error.

When you run resumes through an ATS, it will scan them for specific keywords that you're hiring for. For instance, if you're hiring for the role of a Sales Assistant, an ATS will search for resumes with the same keyword "Sales Assistant". Some SaaS companies, such as Recruit CRM, even have chrome extensions that automatically scan a certain candidate's LinkedIn profile and adds it to your recruiting database.

Bonus Tip: Top 20 benefits of Applicant Tracking System

2. Sources The Right Candidates

There's no doubt in the fact that an ATS can track down the most qualified candidates for an open role. It makes your first step towards hiring much easier. You will fail to draw valid candidates if your job description is not right and if you miss out on mentioning the right keywords. ATS' also use a series of "knockout questions" that help eliminate any candidate who is not a right fit. These questions typically asked are in the form of a checkbox or short answer type questions. If a candidate fails to answer them, he/she gets knocked out by the system automatically. It will move on to the next step of the hiring cycle once an applicant answers the questions satisfactorily as per company standards.

3. Scans & Sorts Applicants

Applicant Tracking Systems have in-built resume parsing features that pull out important information from a candidate's CV and lay it out for recruiters to take note of. Several ATS' usually allow recruiters to hotlist or favourite candidate CVs and write short notes, making your hiring easier than ever. Recruiters can even assign which keywords the software should scan that includes educational background, specific skills or even manual filters that might be useful. This scanning and sorting feature allows recruiters to glance through CVs and schedule interviews accordingly.

Bonus Tip: Recruiters must look out for these 8 features in an Applicant Tracking System

4. Tracks Applicants

Once you're done scanning resumes and sorting them as per your requirements, you can track them in each phase of the hiring cycle. For example— if you are in the process of recruiting ten candidates, your ATS will show you whether each candidate is a new applicant or they're in the first or second interview stage. Even if a candidate gets eliminated in the middle, they will still stay in your recruiting database for future positions.

Don't miss out to tell us in the comments below if you've figured out how does Applicant Tracking Systems work, and also let us know which is one ATS that you can't part ways with!