Technical Guide

Understanding ATS: Complete Guide to Applicant Tracking Systems

January 8, 2025
HR Tech Expert
18 min read
"In 2025, 99% of Fortune 500 companies and 68% of all businesses use Applicant Tracking Systems to screen resumes. Understanding how ATS works isn't just helpful—it's essential for modern job seekers. This comprehensive guide reveals everything you need to know."

What is an Applicant Tracking System (ATS)?

An Applicant Tracking System (ATS) is software that automates the hiring process by scanning, parsing, and ranking resumes before human recruiters ever see them. Think of it as a digital gatekeeper that decides whether your resume reaches human eyes.

99%
Fortune 500 companies use ATS
75%
of resumes never reach human recruiters
6 sec
average time ATS spends on each resume
68%
of all businesses now use ATS technology

ATS technology has evolved significantly in 2025, incorporating AI and machine learning to make more sophisticated decisions about candidate fit. However, understanding the fundamentals remains crucial for job search success.

How ATS Works: The Complete Process

ATS Resume Screening Process

1
Resume Submission
2
Text Parsing
3
Keyword Matching
4
Scoring & Ranking
5
Human Review

Step-by-Step Breakdown

1. Resume Submission: When you submit your resume through a company's career portal, the ATS immediately begins processing your document.

2. Text Parsing: The system extracts text from your resume, converting it into a standardized format. This is where formatting issues can cause problems.

3. Keyword Matching: The ATS searches for specific keywords, skills, and phrases that match the job description requirements.

4. Scoring & Ranking: Based on keyword matches, experience relevance, and other factors, the system assigns a score and ranks candidates.

5. Human Review: Only the highest-scored resumes (typically top 25%) reach human recruiters for manual review.

Popular ATS Platforms in 2025

Workday
28% Market Share
  • AI-powered candidate matching
  • Advanced parsing capabilities
  • Mobile-optimized interface
  • Integrated HR management
Taleo (Oracle)
22% Market Share
  • Keyword-heavy screening
  • Structured data extraction
  • Compliance tracking
  • Bulk resume processing
Greenhouse
15% Market Share
  • Collaborative hiring tools
  • Custom scorecard creation
  • Diversity analytics
  • Interview scheduling
Lever
12% Market Share
  • CRM-style candidate tracking
  • Pipeline visualization
  • Social media integration
  • Advanced reporting
iCIMS
11% Market Share
  • Video interview integration
  • Background check automation
  • Career site builder
  • Analytics dashboard
SmartRecruiters
8% Market Share
  • AI-driven recommendations
  • Marketplace integrations
  • Global hiring support
  • Candidate experience focus

ATS Optimization Strategies

Essential ATS Optimization Tips
Use Standard Headings
Stick to conventional section headers like "Work Experience," "Education," and "Skills" that ATS can easily recognize.
Include Keywords Naturally
Incorporate job-specific keywords from the posting throughout your resume in context, not as a random list.
Choose Simple Formatting
Use standard fonts, avoid headers/footers, tables, and graphics that can confuse parsing algorithms.
Save as .docx or PDF
Most modern ATS systems handle both formats well, but .docx often has better parsing results.
Use Standard Job Titles
Include both your actual title and industry-standard equivalents to improve matching accuracy.
Spell Out Acronyms
Include both the acronym and full phrase (e.g., "Search Engine Optimization (SEO)") to catch different search terms.

Common ATS Mistakes to Avoid

Resume Elements That Break ATS
  • Headers and footers containing important information
  • Text boxes, tables, or complex formatting
  • Images, logos, or graphics with embedded text
  • Unusual fonts or decorative elements
  • Multiple columns or creative layouts
  • Embedded charts, graphs, or infographics
  • Non-standard section headings like "My Journey" instead of "Experience"
  • Keyword stuffing or invisible white text

The Hidden Costs of Poor ATS Optimization

A poorly optimized resume doesn't just get rejected—it often gets scored so low that it's permanently flagged in the company's database. This means future applications to the same company may start with a disadvantage.

ATS Trends and Future Developments

AI and Machine Learning Integration

Modern ATS platforms increasingly use AI to understand context, not just keyword matching. They can now recognize skill variations, understand career progression patterns, and even assess cultural fit based on resume language.

Video and Assessment Integration

2025 has seen increased integration of video screening and skills assessments directly into ATS platforms, creating more comprehensive candidate evaluation processes.

Diversity and Inclusion Features

New ATS features focus on reducing bias by anonymizing certain candidate information during initial screening phases and providing diversity analytics to hiring teams.

Testing Your Resume's ATS Compatibility

Manual Testing Methods

Copy-Paste Test: Copy your resume text and paste it into a plain text editor. If the formatting is preserved and readable, it's likely ATS-friendly.

File Conversion Test: Save your resume as a plain text file and review how the information appears. This simulates how an ATS might parse your content.

Professional ATS Testing Tools

Consider using specialized tools that simulate ATS parsing and provide detailed feedback on optimization opportunities. Our built-in ATS checker analyzes your resume against current ATS algorithms and provides specific improvement recommendations.

Ready to Beat the ATS?

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