What is an Applicant Tracking System? A Complete Guide
Skip to content

What is an Applicant Tracking System? A Complete Guide

Post Author - Mile Živković Mile Živković Last Updated:

In an era of self-driving cars and other technical wonders, it’s high time for recruiters to stop wasting time reading resumes.

One of the biggest advancements in HR in recent decades is the applicant tracking system (ATS), a tool that can help you save time and money and hire better people.

However, as with most software and tools, an ATS is only really effective if you’re using the right one and taking advantage of all its features and functions. Here’s what to know about how applicant tracking systems work and why every modern workplace should use one for hiring.

TL;DR — Key Takeaways

  • An ATS is a type of recruitment software that helps businesses hire faster and better, with many key time-saving features, such as resume parsing, automated job posting, applicant status tracking, interview scheduling, and more.

  • Applicant tracking systems are used to filter resumes, scan and sort applicants, track candidate journeys, and maintain timely communication.

  • The main benefits of an ATS include automated screening, improved collaboration, improved candidate experience, compliance with hiring regulations, shorter time to hire, better quality of hire, and a faster and fairer hiring process.

  • Some of the best applicant tracking systems include Toggl Hire, Manatal, Workable, Recruitee, and others. They can cost anywhere from $20 to thousands of dollars per month.

What is an ATS?

An applicant tracking system (ATS) is software that helps businesses streamline and organize recruitment processes and identify top talent at a fraction of the time and cost compared to manual effort.

With an ATS, a company can automate key recruitment activities, such as:

  • Put up a job posting online

  • Receive and parse resumes to find the best applicants

  • Track the status of each applicant

  • Inform applicants about their progress

  • Send out interview invitations

  • Close out the hiring process and even help out with onboarding

As you can see below, companies of all sizes, from startups to Fortune 500 businesses, use an ATS in some form because of the many benefits, making it a no-brainer regardless of your size.

Who uses ATS?
Source

ATS vs. candidate relationship management software

The terms “applicant tracking system” and “candidate relationship management software” are often bundled together, but they’re not exactly the same thing.

An ATS focuses on the application process, while candidate relationship management software is a tool for building and maintaining relationships with candidates.

In other words, many ATS tools already come with the candidate relationship management feature out of the box, but it’s one of several features offered to help streamline and improve the hiring process.

ATS vs. manually filtering job seekers

An applicant tracking system can’t replace a member of your hiring team, but it can help them do their jobs better by filtering top candidates for your job openings faster, cheaper, and more accurately.

You’ve probably heard of the famous statistic that it takes a recruiter six seconds to go over someone’s resume, but in reality, it’s not just time that’s at stake. When you manually review job seekers it:

  • Takes considerably more time

  • Opens up the chances for recruiter bias

  • Is less objective and efficient

When you combine modern applicant tracking systems with the experience and skills of great hiring managers, you can fill your job openings with better applicants more quickly.

How do applicant tracking systems work?

Different types of applicant tracking systems offer different features. Some may help you with only the basics of your recruitment process, while others could offer robust features that can save significant time and money.

Regardless, most applicant tracking systems offer the following basic features to help you find qualified candidates for your job openings.

Filter resumes

As the first part of the recruiting process, a member of the hiring team needs to upload a job requisition to the ATS. This is a formal request for a new hire and explains how it fits into the overarching company structure.

In the requisition, hiring managers list requirements such as:

  • Years of experience

  • Hard and soft skills

  • Tools and frameworks the applicant should know

The ATS then uses these requirements to swiftly filter through all of your job seekers, giving you only qualified candidates.

It usually uses keywords to determine if an applicant matches your job description. For example, if you’re hiring someone for a product owner role and their resume and profile only mention “product marketer” as a keyword, the applicant tracking system will rule them out.

Top tips to enlarge those brains Top tip:

Save time by using our free job requisition template (all you have to do is make a copy of the document, and it’s yours for free — no email needed).

What to include in a job requisition form

Scan and sort applicants

Behind the scenes, an applicant tracking system is working its complex algorithms to show you only the best job applicants. It considers the input you provided as a set of rules and guidelines for hand-picking the best of the best.

This is arguably the most important aspect of an ATS because it can help you quickly go from thousands of applicants to a pre-qualified pool of dozens of top candidates.

But as many recruiting teams know, an applicant tracking system needs to be handled with care. Focusing too much on keywords, or the wrong ones, and using arbitrary criteria, such as years of experience, can backfire.

The reason is simple: you’re not considering whether the candidate can do the job and how well they perform.

Top tips to enlarge those brains Top tip:

With Toggl Hire, you can give job seekers practical hiring tests specific to the role and your company. In our test library, you can find hundreds of tests for different roles that you can use out of the box or adjust to your requirements.

Track candidate journeys

An applicant tracking system helps you throughout the entire hiring process, not just at the very beginning. Hiring managers can use it to visualize the full recruitment cycle, from the moment a job requisition is created until they fill the position and sign a contract.

Visualizing your hiring pipeline lets you spot any bottlenecks in your hiring process and remove them quickly. For example, you could see that many candidates drop off after the initial interview. This tells you that improving the interviews can elevate the entire candidate experience.

Moreover, applicant tracking systems are cloud-based apps that your hiring teams can access simultaneously. This fosters collaboration since talent acquisition teams can leave comments and use interview scorecards to evaluate candidates.

Top tips to enlarge those brains Top tip:

We have an interview scorecard template for you to use, too! Download it here. Combining practical HR tools, like an interview scorecard template, with other resources like job task analyses and skills assessments will help your team save valuable time and effort.

Candidate scorecard for interviewing

Maintain timely communication

34% of job seekers don’t hear back from potential employers even two months after submitting their application. Even worse (although it’s all pretty bad), only 58% of candidates have received a basic “thank you” email after applying.

An applicant tracking system can be a huge help here, as it can send automated and personalized emails for each step of the hiring process. For example, you can usually set triggers to contact candidates:

  • When someone applies for a job

  • When they are moved to the next round and invited for an interview

  • To thank them for taking part in the interview

  • To give them feedback about the interview

  • To extend an offer

  • To turn the candidate down in the appropriate manner

On top of automation, most applicant tracking systems come with handy email templates for each of these situations. Of course, it’s your job to find and personalize them to match your employer brand and support the candidate experience.

7 benefits of using an ATS

Think all of this work can be automated with a mix of Notion, ClickUp, and Zapier? You must not really understand the benefits of using applicant tracking software in your recruitment process. Here are seven reasons why it pays to get a dedicated applicant tracking software to organize everything.

1. Automate screening candidates

Did you know that, according to research, 99% of Fortune 500 companies use applicant tracking systems? The reason is simple: the savings made by using an ATS far outweigh the cost.

You can go from 1,000 job seekers to 10 applicants with top talent to interview and hire quickly. Speeding up the screening process and eliminating the least qualified candidates early on.

Top tips to enlarge those brains Top tip:

Go a step further than just automated resume screening with a skills test. Standardized skills assessments like Toggl Hire can predict job performance and employee engagement better than traditional screening approaches. Additional benefits include improved talent insights, applicant experience, onboarding speed, and operational cost savings.

2. Improve collaboration

With the right software, hiring managers can work with each other instead of in isolation. Applicant tracking systems let you track the recruiting process from a single dashboard, helping various stakeholders to collaborate seamlessly during the recruitment process.

Consider a scenario where a candidate has all the technical skills for a role but a recruiter from the hiring team thinks they lack the required soft skills. They can then leave a note in the ATS, ensuring the person who does the interview will prioritize assessing their soft skills.

3. Streamline candidate experience

From the moment your applicants read your job descriptions to the moment they get an offer, everyone goes through the same process. New hires don’t miss a single step in the recruitment process, and the ATS does all the heavy lifting.

This not only helps support a more consistent candidate experience but also gives everyone a fair, unbiased chance at getting the job.

Candidate Experience Statistics 2024

4. Compliance with hiring regulations

Talent acquisition teams can rely on ATS recruitment software to stay on the right side of the law (although you should definitely consult a legal expert from time to time, too…). Namely, they can help with:

  • Equal Employment Opportunity (EEO) compliance

  • Data protection and privacy compliance

  • Job posting compliance (with local, federal, and country laws)

  • Audit trails and compliance monitoring

  • Integrations with background screening services

  • Automated compliance updates

In short, the best applicant tracking systems can even save you serious money in legal fees and embarrassing legal fiascos if you’re a larger company with a big brand name to protect.

5. Reduce time to hire

How much an ATS can speed up your time to hire depends on many factors, but one thing is certain: you’ll find top candidates more quickly. Instead of spending hours on resumes, hiring stakeholders can use ATS systems to automate the tedious parts of recruitment.

You also won’t waste time manually emailing everyone. This means you can focus on the very best candidates and show them why they should look forward to being your new hire.

6. Improve quality of hire

Whether it’s job boards, social media, LinkedIn, or some other source, an ATS can help you get better hires with the same number of starting applicants. You’ll ensure that every applicant matches the requirements in the job description and that they have relevant industry experience.

Quality of Hire Metric

7. Faster, fairer hiring decisions

The average time to fill a position is 44 days. Much of that time is spent on evaluating whether the applicant meets the most basic criteria for the job opening. Recruiting teams can shorten their time to hire and time to fill by using an ATS early on.

There are even more benefits to using an ATS. By keeping things fair, you can be sure that the person you hire is based on their work experience and knowledge rather than the impression they made on the recruiter.

The best part? Applicant tracking systems are not easy to fool, and they don’t see gender, age, or skin color, either.

What should hiring managers look for in an ATS?

If you’re a hiring manager or a recruiter looking to get an ATS for your hiring process, you first need to have a basic idea of what an ATS can and cannot do. When assessing applicant tracking systems to test out and purchase, here are some of the features to be on the lookout for:

  • Automated job posting: To post job openings on job boards and networks such as LinkedIn

  • Resume parsing: To quickly scan through resumes for things such as job titles, keywords, years of experience, etc.

  • Interview scheduling: To book interviews with the best candidates for the job

  • Support for employee referrals: To let your internal team members enter the job search

  • Advanced search and filtering: So you can find the most qualified candidate by using relevant keywords and filters

  • Integrations with hiring and other business tools: CRMs, assessment tools, workforce planning tools

  • Detailed analytics: So you can see at a glance how many active candidates you have, who is dropping out, what percentage makes it to the final stages, etc.

These are just some of the basics that an ATS software should have to help you hire top talent.

Top applicant tracking systems in 2024

Most applicant tracking systems offer the same features and functionalities. There is no single “best”, as the best tool depends on your specific needs and requirements. Having said that, here are some of the top choices that any hiring manager should consider in 2024.

Manatal

Manatal applicant tracking system

If you’re looking for an easy-to-use applicant tracking system backed with AI features, Manatal is a superb option. Similar to a project management tool (think Trello), it’s beginner-friendly, and even the most novice HR teams can get up and running within hours of signing up.

Top features include: Automated job posting on over 2,500 free and paid channels, AI-powered candidate recommendations, profile enrichment (by adding missing candidate information from sources like LinkedIn), mobile app, custom branded career sites, and more.

Recruitee

Recruitee applicant tracking system

If you have a large hiring team and need something to bring everyone together around the same cause, Recruitee is one of the leading applicant tracking systems in the HR industry. It promises to save up to 64% of your time (or 12 hours per week) by eliminating manual tasks from the hiring process.

Noteworthy features include: Hiring pipeline creation, a hiring team feature that lets you manage projects and people, Referralshub for employee referrals, integrations with video interview tools, a mobile app, requisition approvals, and much more.

Toggl Hire

Toggl Hire Candidate Pipeline

Toggl Hire is a full-cycle hiring tool that helps businesses like yours hire people who can do the job and not just write a great resume.

With Toggl Hire, you won’t waste time on fabricated resumes or interviews that don’t reflect the true skills of your candidates. Once the candidates complete the test, you both get feedback. The candidate knows how they performed and gets an email about it. Meanwhile, you know right off the bat if someone can do the job or not.

You can use it to create multi-level assessments, visualize your hiring funnel, eliminate hiring bias, and improve the candidate experience — all things most other ATS don’t offer.

Zoho Recruit

Zoho Recruit applicant tracking system

If you’re in the Zoho ecosystem and use their renowned CRM, Zoho Recruit is the natural next step. Built for both staffing agencies and internal HR teams, Zoho uses the power of the cloud with the most recent AI features to help you fill key positions more quickly.

Some top features include: Integrations with over 50+ different hiring and business tools, a mobile app for recruiting on the go, and extensive customization options.

Workable

Workable applicant tracking system

If you’ve applied for a job online in recent years, there’s a good chance you’ve run across Workable at least once. It’s one of the most versatile applicant tracking systems, with features that can save time and money and reduce manual HR tasks.

Some of its highlights include: Automated job postings across different platforms, passive candidate sourcing, career page builder, electronic signatures and document management, and many others.

How much do applicant tracking systems cost?

From several hundred dollars per month to over $10,000 monthly, applicant tracking systems have different price tags based on several factors. Most pricing structures for this kind of software vary based on the:

  • Size of your company

  • Feature set you need

  • Number of users on the applicant tracking system

  • Number of job postings you plan to publish

  • Number of job seekers you need to process on a monthly basis

For example, Toggl Hire starts as low as $20 per month, while Workable starts at $149 per month. Before evaluating applicant tracking systems and their costs, determine your needs first, and start your search by filtering your options based on the software that cover your basic needs (at the very least).

Improve your hiring process with Toggl Hire

Having an applicant tracking system in 2024 is an absolute must if you want to speed up your recruitment process, find the best job applicants, and ensure you hire the right person for the job. The price you pay for ATS software is more than offset by the savings in time, money, and hire quality.

But not even the best applicant tracking system can save you if you’re skipping the foundations: testing for skills. With Toggl Hire, you get all the standard ATS functions (such as a candidate pipeline, job landing pages, etc.) with the addition of skills tests to help you hire the best person who knows how to do the job.

Give it a try and sign up for your free account today!

Mile Živković

Mile is a B2B content marketer specializing in HR, martech and data analytics. Ask him about thoughts on reducing hiring bias, the role of AI in modern recruitment, or how to immediately spot red flags in a job ad.

Join 30,000+ subscribers getting the best tips on productivity, work management, hiring and more!

We promise we won't spam you and you can unsubscribe anytime.