What’s an Applicant Tracking System? Your First Step to Out-Recruiting the Competition

John Ferguson
January 27, 2020

What’s an Applicant Tracking System? Your First Step to Out-Recruiting the Competition

Due to ever-increasing professional specialization and historically low unemployment, the competition for top talent is fierce. To meet these challenges head-on, veteran recruiters attest to the value of an applicant tracking system (ATS)—a software solution that maximizes your talent pool and helps you attract top candidates over your competition.  

What is an Applicant Tracking System (ATS)?

An applicant tracking system is a database that manages job candidates’ application information, including resumes and demographics. There are some features that you should consider standard, if not universal, across full ATS software. These functions include: 

  • Candidate sourcing
  • Resume management
  • Resume Parsing
  • Facilitating communications with candidates
  • Candidate Relationship Management (this capability is not quite standard, but will soon become so)

Many ATS products have built on this database capability to support more aspects of recruitment, from the initial job posting to new employee onboarding. These strategic recruitment functions include:

  • Native video interviewing
  • Social media publishing
  • Assessment creation and storage
  • Interview note-taking and document management
  • Job offer management
  • Integration with onboarding, talent management, and HR management software
  • EOE compliance checking

Most ATS products, like the rest of the HR software space, have been expanding their offerings to support the entire recruiting process on their single platforms. While this unification is most prevalent at the enterprise level, it will become increasingly accessible to SMBs over the next few years. This trend reflects a broader trend of HR software consolidating into singular platforms to more efficiently manage HR data.  

What Impact Does an ATS have for Recruiters?

Applicant tracking systems separate quality candidates from the masses and help you keep those candidates engaged throughout the recruitment process. ATS products can also make your day-to-day activities easier, simpler, and more streamlined.

We design ATS products to facilitate recruiters’ key business objectives. Features like resume parsing and candidate sourcing maximize your job postings’ exposure. The platforms can then automatically filter, rate, and rank inbound resumes from those postings. 

Many tracking systems have automated these processes so you don’t have to touch a candidate’s application until the software has identified the best fits for the role. This level of automation allows you to focus on the “human” side of recruiting. That means less time sifting through unqualified applications and more time differentiating between several good candidates and selling them on your organization once you’ve made your decision. 

For the non-automated aspects of recruiting, ATS should still make your life easier. Many ATS’s can centralize communications with candidates via email, texts, and even interviews. This centralization allows you to see all relevant data on a candidate, or batch of candidates, without having to waste time managing multiple channels of data. 

ATS’s can also streamline internal communications. They centralize content like interview notes, documentation, and collaboration between stakeholders. This ensures that everyone involved in the hiring process is on the same page.

ATS providers are also building out more specialized features to support other strategic business goals. For instance, consider the growing focus on recruiting as a key aspect of diversity in the workplace. Recruiting software should play a growing role in incorporating that goal into hiring. And, as passive recruiting becomes the norm for specialized roles, ATS platforms will provide a nexus for managing those long-term relationships with candidates who may not be job seeking yet. 

When Should You Invest in an ATS?

Despite their value, there are some cases where buying an ATS may not be the best option. If you’re working with low recruitment volume or more general hiring, these tools may not be worth the investment. 

However, there are also some good indicators of when investing in an ATS will pay off for you. An ATS becomes more worthwhile the higher your hiring volume is. For instance, if you were processing upwards of 1,000 resumes a year, you’d want to consider using an ATS to relieve pressure from your existing resources. The more recruiting personnel you have, the better you’ll be able to absorb the additional volume. Ultimately, there will come a point where it is more cost-effective to implement an ATS than to hire more recruiting or HR personnel to do the same job. 

The other early indicator to invest in an ATS is the role you’re hiring for. The more specialized the position you’re trying to fill is, the fewer viable candidates you’ll attract, and the greater the cost of missed opportunities. An applicant tracking system can reduce the risk of human error and FOMO in the hiring process. It can also help you maintain long-term relationships with a more specialized candidate pool—including passive candidates

How to Compare ATS Products 

Distinguishing between ATS products was one of the top challenges faced by recruiting software buyers, according to a recent TrustRadius survey conducted for our recent Buyer’s Guide to Applicant Tracking Systems. There’s a lot of overlap between feature sets of various products in this category and that can make purchasing decisions difficult. 

Most buyers will compare tools based on pricing, and ATS software is often priced according to hiring volume. If you enter pricing discussions with a clear idea of how much hiring you need to do annually, you won’t feel constrained by your ATS’s limitations or pay for volume you’re not using. 

Nearly 20% of the 134 survey respondents also identified Candidate Relationship Management as the most important feature to achieving their recruiting goals. If you want to emphasize or prioritize reaching passive candidates, look for robust CRM and job marketing functionalities to surface more suitable products.

There’s also more variation in the strategic recruiting functions offered in ATS tools across the market. Determining how important features like live interviews, assessments, and onboarding are to you, and the importance of centralizing those features on the same platform, will help you narrow down your options. 

Choosing the Right ATS for Your Business

Even after considering these factors, it’s hard to discern the qualitative differences between applicant tracking systems. This is where exploring other users’ experiences through trusted third-party reviews can make a big impact. 

User reviews frequently shed light on aspects of using an ATS that you would only know from using the tools. For instance, TrustRadius reviewers will speak at length on subjective measures like user-friendliness, reporting sufficiency, and candidate quality—experiences that are best evaluated from an individual perspective.

While recruiting strategy is unique to each company, reading trusted reviews will likely help you narrow down your options and find the right tools to help you optimize recruiting efforts and snag top talent in your field. 

About the Author

John Ferguson
John is a Research Associate at TrustRadius, focusing on content development and buyer-guided research. His goal is to support and enable better software buying decisions, with an eye towards helping people from all backgrounds navigate the world of business software. He has a BA in Politics from Centre College.

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