Applicant Tracking Systems Explained: Features, Benefits & Challenges

ATS stands for Applicant Tracking System — a type of software designed to automate and streamline the recruitment process. Initially developed to help HR departments manage the rising number of job applications, ATS software organizes, filters, and tracks candidates from the moment they apply to the time they are hired.

Most ATS platforms allow recruiters to:

Post jobs to multiple boards

Screen resumes using keywords

Track applicant progress

Collaborate with hiring managers

Schedule interviews and send automated emails

With remote work and digital hiring becoming more common, the use of ATS software has expanded from large corporations to startups and even small businesses.

Why ATS Software Matters Today

Who It Affects and the Problems It Solves

The growing demand for efficient, data-driven hiring has made ATS tools essential in HR tech. Here's why:

Affects:

Recruiters and HR Professionals: Helps manage large applicant volumes efficiently.

Hiring Managers: Provides insights and collaboration tools.

Job Seekers: Influences how resumes are read and shortlisted.

Companies of All Sizes: From enterprise HR teams to small business owners.

Problems It Solves:

Manual Screening Bottlenecks: Saves time by filtering resumes based on relevant criteria.

Lack of Hiring Transparency: Creates a record of all applicant activity.

Compliance and Bias Issues: Enables standardized hiring practices (to an extent).

Poor Candidate Communication: Automates follow-ups and interview scheduling.

Recent Updates in ATS Software (2024–2025)

Several recent trends and improvements are shaping how ATS software is built and used:

1. AI and Machine Learning Integration

ATS tools now use AI-based resume screening, sentiment analysis, and predictive analytics.

Platforms like Greenhouse and Lever introduced AI ranking models in early 2025.

2. DEI-Focused Features

Modern systems include tools to support diversity, equity, and inclusion (DEI) in hiring.

For example, SmartRecruiters added DEI scoring metrics in July 2024.

3. Integration With Skills Assessment Tools

ATS platforms now integrate with tools like Codility, HackerRank, and Wonderlic to assess technical and soft skills directly within the pipeline.

4. Mobile and Cloud-First Interfaces

Platforms are increasingly optimized for mobile HR teams and cloud-based access, particularly relevant in remote-first organizations.

5. Global Compliance Features

Multi-country companies are using ATS tools that support localized legal compliance, GDPR alerts, and language support (notably updated in 2025).

Laws, Policies, and Compliance Factors

The use of ATS software must comply with employment and data protection regulations depending on the country or region. Key laws include:

United States

EEOC Compliance: Employers must ensure ATS does not introduce discriminatory bias. Automated filtering must follow Equal Employment Opportunity Commission (EEOC) guidelines.

OFCCP Guidelines: For federal contractors, the Office of Federal Contract Compliance Programs enforces fair recruitment through audit-ready systems.

European Union

GDPR Compliance: ATS software must allow candidates to access, update, or delete personal data. Consent and privacy disclosures are mandatory.

India

Data Protection Bill 2023: Applies to ATS software collecting candidate data in India. Consent-based data processing and security measures are necessary.

Canada

PIPEDA: Employers using ATS must ensure that candidate data is protected and used only for specified purposes.

Useful ATS Tools and Resources

Here are widely-used tools and supportive platforms that assist in managing ATS systems or working around them:

Popular ATS Platforms

Tool	Description
Workable	Cloud-based tool with integrated sourcing and AI screening.
Greenhouse	Known for structured hiring and DEI support.
Breezy HR	Small business-friendly with drag-and-drop interface.
Lever	CRM-integrated ATS, useful for nurturing passive candidates.
SmartRecruiters	Full talent acquisition suite with global compliance.

Resume Tools for Candidates

Jobscan.co – Optimizes resumes for ATS keyword matching.

Zety – Offers ATS-friendly templates and real-time resume scoring.

Rezi – AI-powered resume builder for bypassing ATS filters.

Integrations and Testing

HackerRank, Codility – For coding assessments

Google Calendar, Outlook, Slack – Integrated for interview scheduling

DocuSign, Adobe Sign – For digital offer letters

FAQs: Frequently Asked Questions About ATS

1. Can ATS software reject my resume automatically?

Yes. ATS platforms often screen resumes using predefined keywords. If your resume lacks these or is not formatted properly, it might be rejected automatically.

2. Are ATS systems only used by large companies?

No. While initially adopted by large enterprises, many small and medium-sized businesses now use affordable or free ATS tools to streamline hiring.

3. How do I make my resume ATS-friendly?

Use a clean layout, avoid images or charts, and include keywords from the job description. Save the file as .docx or .pdf based on the job site’s guidance.

4. Are ATS tools regulated or monitored?

ATS tools must comply with local employment laws and data privacy regulations such as GDPR or EEOC guidelines, depending on the location of the employer.

5. Can AI in ATS lead to biased hiring?

Yes, if not properly audited. That’s why many companies now use bias-detection modules or human-in-the-loop reviews to mitigate discriminatory filtering.

Final Thought

As recruitment becomes more digital and data-driven, ATS software plays a vital role in shaping how candidates are discovered, evaluated, and hired. Whether you're a recruiter seeking efficiency or a job seeker aiming to stand out, understanding how applicant tracking systems work is essential.