Understanding Applicant Tracking System Basics

What is an applicant tracking system (ATS)? What does an applicant tracking system do during each stage of the recruitment process? What are the key features you should look for when purchasing or using an applicant tracking system? Here are the ABCs to help you master the basics of an applicant tracking system.

Streamlining the Recruitment Process

The key word in the term applicant tracking system is “applicant.”

The applicant tracking system is a tool to manage the workflow and data associated with candidates once they have applied for specific jobs and are therefore now considered to be active. Prior to that, they are candidates. Some may be passive candidates who need to be proactively reached — but that’s beyond the capabilities of an applicant tracking system.

When you look back at how paper job applications were sent by mail, there was a clear cost to the applicant for each additional letter sent. The natural limit on recruiting resources was the candidate’s limited capability to apply for jobs.

Almost 25 years ago, this limit was lifted with the advent of the Internet and the spread of job boards. There is currently no incremental cost, other than time, for applicants to distribute additional copies of their resumes.

That’s why, in today’s market, the volume of resumes a company receives is directly proportional to the visibility of its brand. The better known the company, the more resumes it gets. That’s why some of today’s leading companies are flooded with applicants.

Complicating the problem even further are a host of regulatory requirements that vary by state and country. The applicant tracking system is not only the system of record for regulatory purposes, but it is also the primary tool for executing and recording details of the recruiting process from application to disposition.

It’s worth noting that the Internet is full of claims, including: “85 percent of companies are looking to replace their applicant tracking system” or “70 percent of all recruiters hate their applicant tracking system.” It’s true that the applicant tracking system suffers from the worst aspects of any administrative tool and, as with any piece of technology, if you pick one that doesn’t meet your needs, you’ll have plenty to dislike. But, the average replacement cycle is around 7 years. In other words, as disliked as they are, they don’t often get replaced.

By some estimates, there are as many as 500 different applicant tracking system vendors. Recruiting varies widely by region, industry, profession and other factors. It can get complicated, which is why it’s important to pay attention to these key features.

Features of an Applicant Tracking System

It’s crucial to understand some of the key features to look for in an applicant tracking system.

1. Application process: There is a range from simple resume submittal to full employment website capabilities. In either case, the applicant tracking system is the point of demarcation for determining whether someone is an applicant. The rule of thumb is that the status changes from candidate to applicant once the person’s data is in the applicant tracking system.

2. Resume parsing: Resumes — and increasingly, social media data — are submitted as free form text in a variety of file formats (pdf, doc, docx, etc.). The parsing process then extracts the text and places it into a structured and more readily searchable form. There are a few parsing companies that are universally used.

3. Resume storage and tagging: Original resumes along with the parsed versions are stored in a database. In countries outside of the U.S., there are noteworthy regulations regarding how long a resume can be kept and under what conditions. More advanced systems allow the resumes to be tagged for categorization purposes.

4. Search: One of the key factors that distinguishes applicant tracking system providers is the quality of search. Think about it: Email is email, but there are major differences between what Gmail offers versus what Outlook may offer; it’s similar with applicant tracking systems. The more robust the search capability, the more usable the system.

5. Screening, assessment and other pre-hire screening: If you think that 500 applicant tracking system vendors seems like a lot, there are thousands of pre-hire screening, assessment, reference-checking, drug-testing and personality-testing companies. The applicant tracking system needs to be able to handle and store this sensitive information.

6. Recruiting workflow: Recruiting — which includes the interviewing process — involves the reciprocal negotiation between recruiters and hiring managers, as well as between recruiters and candidates. The recruiting workflow encompasses all of the back and forth between the recruiter and the candidate beginning with a group and narrowing down to an individual. The applicant tracking system tracks scheduling and completion of these tasks, including scheduling interviews and reviewing resumes.

7. Hiring workflow: The hiring process refers to the ongoing conversation between recruiters and hiring managers. The applicant tracking system tracks, monitors and documents this process.

8. Interfaces (onboarding and payroll): One of the final steps of the recruiting process is when a new hire gets handed off to the rest of the HR software suite.

9. Data and analytics: The most up-to-date applicant tracking systems have data and analytics tools that allow recruiting teams to analyze their own performance and deliver reports to key stakeholders.

Now that you know what an applicant tracking system should look like, find out why an applicant tracking system should be your next HR technology purchase.

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