Most of the time, recruiting is a time-consuming and costly process that frustrates hiring managers, especially since they have to check every application manually.

By doing so, they might miss potentially good candidates. 

However, it’s not just about the recruiters but also about job seekers who spend a considerable amount of time perfecting their resume, only for their dream company to accidentally ignore it. 

In this constantly changing world, you can’t afford to lose great talent or waste time. 

That’s why so many organizations have started using an applicant tracking system (ATS) to help their company attract, hire, and retain top talent. 

In this article, discover: 

• What an ATS is and its objective
• Five benefits of applicant tracking systems
• Frequently asked questions about applicant tracking systems

What Is an Applicant Tracking System?

This software collects, sorts, and ranks the thousands of job applications and cover letters an organization receives for open positions. 

It includes functions such as talent management, assessment tools, and resume parsing. 

Usually, the ATS follows four basic steps: 

1. The hiring manager enters the job description into the applicant tracking system, which includes information about the position, such as desired skills or job titles. 
2. The ATS creates the candidate profile ideal for the job. 
3. The candidates submit their applications, and the software filters and analyzes them to find the right fit.
4. Hiring managers identify qualified candidates, use their contact information to get in touch, and move them forward.

For example, a company might be hiring for a graphic designer position. 

Out of the 600 resumes, only 160 qualify for the keyword “graphic designer,” successfully isolating contenders who’ve done the specific job before. 

As a result, the application process is streamlined and helps recruiters filter the candidate pool and find the best applicants.

Moving forward, let’s discover the purpose of an ATS system. 

What Is the Goal of an Applicant Tracking System?

Most companies face significant human resources challenges regarding hiring and the onboarding process, from attracting and retaining top talent to making sure they have a great first day.

That’s what an ATS is all about, ensuring that you find, track, and retain the best candidates. 

Furthermore, according to a survey, 86.1% of Fortune 500 companies say using ATS software has increased the quality and speed at which they hire applicants.

PSST! Learn more about the HR industry by checking out these statistics every recruiter should know. 

In short, an applicant tracking system: 

• Increases candidate engagement by creating greater visibility across the journey. 
• Improves efficiency and lowers costs through increased communication opportunities. 
• Helps businesses remain competitive as an ATS gives employers quicker access to candidates with relevant work experience. 

But we’ll discuss more about the benefits of digitizing the recruiting process in the next section. 

5 Benefits of Applicant Tracking Systems

We’ve already established that an ATS speeds up attracting and recruiting top talent and ensures you find suitable candidates for the job.

However, it does more than that!

In the following paragraphs, let’s explore the five benefits of an applicant tracking system. 

Saves time

Screening candidates is the most drawn-out part of recruiting, from the job posting on social media to sifting through all the applicants. 

In fact, according to a survey, this process takes up to 23 hours just for one hire. 

Furthermore, the same survey found that, when a job opening receives 250 resumes on average, 75% to 88% are incompatible with the requirements.

As a result, your hiring team wastes time checking those CVs out instead of focusing on finding real talent. 

With an ATS, you automate the posting and listing on job boards and filter out irrelevant applications, finishing the resume screening process in seconds rather than hours. 

Reduces cost-per-hire

The average cost-per-hire is $4,700, so constantly hiring new employees and having high turnover rates might prove too costly for some businesses. 

That’s why investing in the proper HR tool and creating an efficient screening process is essential in today’s digital world. 

So, whenever your recruiting team needs to hire new workers, they can rely on applicant tracking systems to optimize the screening process and reduce cost-per-hire.

Author’s Tip: Welcome new hires to your team by using one of these techniques.

Speeds up the recruitment process

Since the best ATS software is cloud-based, you have all the data centralized and organized in a single platform.

Through customizable dashboards and refined algorithms that provide a nuanced portrait of the perfect candidate, the software enables full optimization of the hiring process and real-time collaboration. 

As a result, ATS makes the whole cycle faster, from receiving applications to finding potential candidates and scheduling interviews. 

Author’s Tip: Help your new hires adapt to your company’s culture quicker by enhancing your onboarding process.

Improves the candidate experience

The best applicant tracking system aims to enhance the candidate experience. 

Here’s how ATS makes the recruiting journey better for candidates: 

• Enables seamless communication: An ATS platform ensures consistent and timely communication at all stages. As a result, it makes candidates feel respected and valued. 
• Quicker screening: Because the applicants know where they stand, they can move faster through the hiring funnel, which helps them decide their next move.
• Creates a fair process: Applicant tracking systems work to ensure the overall experience is as efficient and transparent as possible, without unfair bias. 

Generates better hiring results

An ATS aims to enhance your retention efforts and return on investment while enabling maximum searchability. 

But it does more than that and creates better hiring results, which means: 

• Shorter time-to-hire — You hire faster and reduce time wasted to increase productivity. 
• Improved cost-per-hire — You get better candidates for less money to improve company profitability. 
• Better quality-of-hire — You have better performance reviews, which is a metric showing how successful the recruitment process was. 

Now Over to You

Recruiting tools ensure you hire suitable candidates, no matter whether you post the job requirements on career sites such as LinkedIn or use employee referrals.

In addition, recruiting software such as an ATS can improve your workflow and solve your staffing issues. 

So, investing in such systems is a good idea, no matter the price.

If you want to discover more about HR and how it can take your business to greater heights, check out our glossary for more details. 

Frequently Asked Questions (FAQs)

Take a look at our FAQ list to discover more about applicant tracking systems. 

Q1. What is an ATS-friendly CV?

An ATS-friendly CV is a correctly formatted resume that an applicant tracking system can easily understand and read.

It contains keywords and phrases relevant to a particular job title and is more likely to be spotted by a hiring manager.

Crafting such resumes ensures that your CV doesn’t get lost in the void by companies who use applicant tracking systems for their recruiting efforts. 

Q2. What is the future of the ATS?

In the early days, only companies that could support the high investment costs used an ATS.

Now, with the advancement in technology, such as artificial intelligence, and the rise of remote work, more and more organizations use applicant tracking systems to aid their digital recruitment efforts.

It’s safe to say that the future of the ATS is bright, and many will continue to use it. 

Q3. Do small businesses need an ATS?

Many small business owners believe they don’t need an ATS to recruit the best candidates. 

However, they might need it more than large corporations since it automates time-consuming tasks such as: 

• Managing resumes
• Sending custom emails
• Tracking candidates

Furthermore, an ATS is affordable, and many providers have packages tailored to all budgets. 

Q4. How can I choose the right ATS for my business?

Here are the secrets to choosing the right ATS software for your business: 

1. Identify the relevant features — Ensure you find the capabilities that solve your challenges or unforeseen problems. 
2. Check customer reviews — Look for customer testimonials and see what they love and hate about the product.
3. Make sure it’s user-friendly — Find a tool that’s intuitive and easy to learn.
4. Ensure the pricing fits your budget — If you’re working on a budget, check for hidden costs such as migration fees. 
5. Try a free trial — It’s useful for businesses who still work on their recruitment process because it allows your team to get firsthand experience without spending money. 
6. Involve your team — Your coworkers will use this tool daily, so you must make sure your team likes working with it. 
7. Comply with local laws — Depending on the location, your HR team has to comply with certain laws to avoid any issues.