What is an applicant tracking system (ATS)?

Hiring used to mean posting a job, reading some resumes, and making a few phone calls to a short list of candidates. Now, it’s a data superhighway. Applications come in by the hundreds or more. Roles open and close in days, not weeks. And one missed email can cost you the perfect candidate.

An applicant tracking system (ATS) doesn’t just help manage the mess—ATSs have transformed how companies find and hire top talent before the competition does.

In this guide, we’ll explain what an applicant tracking system is, how ATSs transform the recruiting process, and factors to consider when comparing options.

The importance of investing in an ATS

Every business, regardless of size or scope, faces challenges with recruitment and onboarding. Whether you run a small business or an organization with employees and contractors worldwide, ATS software helps find the best talent, ensure competent candidate relationship management, and hire candidates who are more likely to stay long-term. 

Here’s a closer look at how applicant tracking systems simplify recruiting and hiring: 

Efficiency and automation

Too much manual work can trigger errors and stifle collaboration across HR teams, leading applicants and new hires to move more slowly through the recruiting and hiring processes. And that can raise cost-to-hire and time-to-hire ratios. The right ATS software lets you automate manual tasks, keeping all hiring stakeholders on the same page. It lets you see the same real-time information and ensures efficient and effective communication throughout the entire talent acquisition and onboarding processes. 

Improved candidate experience

Vague job descriptions, slow response times, and poor engagement often cause organizations to lose top candidates. An ATS aligns every element of recruiting and hiring so your HR team and potential new hires have greater visibility during crucial touchpoints. That includes submitting applications, scheduling interviews, and onboarding. 

Data-driven decision making

Applicant tracking systems go beyond managing logistics. They can also help you find and secure top talent by leveraging data to create ideal candidate profiles. Some ATS software uses artificial intelligence to assess resumes and match applicant skills with job descriptions to predict successful candidates. This kind of predictive analysis takes much of the guesswork out of hiring. It also frees you up to focus on talent sourcing, acquisition, and onboarding rather than dealing with misses and high turnover. 

What should you be looking for in an ATS?

Job postings often attract dozens, if not hundreds or thousands, of candidates. Using an applicant tracking system makes identifying, approaching, interviewing, and hiring the best of the best all the easier. No matter the size of your company, automation saves resources, so you don’t waste time and money on unqualified applicants. 

Along with automation, here are other features to look for in ATS software:  

Customization and scalability

As your company grows and expands geographically, you’ll need an applicant tracking system to efficiently handle talent acquisition across borders. It should be easily customizable to local laws and candidate expectations. Ideally, a good ATS includes candidate relationship management features that connect your HR team and job candidates with ease. 

Seamless integrations

Your ATS should connect the tools your recruiting and hiring teams already use and don’t want to give up. For example, ATS software should integrate with popular interview scheduling apps, online candidate assessments, and video interview platforms.

Pipeline visibility and interview management 

More than just collecting resumes, hiring is about developing and maintaining smooth processes that contribute to your business's growth. A good applicant tracking system gives you a clear view of your hiring pipeline at every stage. You should be able to see which roles are moving quickly and the areas that require attention. All the better if the system helps you manage the interview process directly, with built-in scheduling, feedback collection, and reminders that keep everyone aligned.

Candidate relationship management (CRM) capabilities

An effective ATS goes beyond tracking applicants—it helps build relationships with them. CRM features let you stay in touch with promising candidates who may not be a good fit today but could be a great match in the future. From personalized email campaigns to automated status updates, a system with CRM functionality makes it easier to stay in touch with job seekers over time and keep your talent pool engaged and updated.

What’s the difference between an ATS and a CRM?

Applicant tracking systems manage active applications and streamline recruitment and onboarding workflows like posting jobs and logging candidates as they move through interviews.

Conversely, candidate relationship management (CRM) is a talent-pipelining tool that helps proactively build and nurture relationships with both active and passive candidates—often long before a position opens. 

In short, an applicant tracking system handles who applied and where they are in the process, while a CRM focuses on who you keep in mind for the future. Some ATS software includes basic CRM features, however.

4 benefits of using an ATS

A well-designed applicant tracking system deals with the hiring process from first contact with an applicant to your response—whether it’s a rejection or an offer letter. But a quality ATS also does so much more. Here are a few benefits of using an ATS:

Automation of repetitive tasks

Manually sorting resumes, sending follow-up emails, or scheduling interviews takes valuable time. An ATS automates these repetitive tasks so your recruiting team can focus on high-impact work—like evaluating candidates that the system flags based on your criteria and, in turn, improving the overall hiring experience for everyone involved.

Enhanced communication with candidates

It's simply not possible for most companies to communicate directly with every job applicant. With personalized communications about application status, your ATS ensures that candidates are never in the dark and helps your company remain competitive in attracting top talent. This creates a more respectful and professional candidate experience.

Centralized platform

Applicant tracking systems combine applications, interview notes, and hiring team feedback into one platform. This centralized approach reduces back-and-forth emails and keeps prospective employees and all areas of HR on the same page with real-time information.

Lower recruitment costs

ATSs can directly lower the cost of hiring by reducing time to hire and streamlining administrative work. It also helps avoid duplicate work—like rereviewing past applicants—by keeping your talent pool organized and ready for future roles.

What to consider when selecting an ATS

Choosing the right applicant tracking system starts with understanding your recruitment and HR teams’ needs and supporting them with ATS software that fits.

When evaluating ATSs, here’s what to consider: 

Company size and hiring volume

Some ATS platforms can handle high-volume recruiting with features like bulk resume parsing and full-on automation of the entire hiring process. Others are better suited for companies making several strategic hires each year. Think about how many roles you fill each quarter and how complex your hiring cycles are. Don’t overpay for features you won’t use—or underspend on tools that can’t keep up.

Ease of use and customization options

Your HR team should look forward to using the ATS because it makes their jobs easier. The best ATS tools are intuitive, with clean dashboards and workflows that you can tailor to your process. Look for platforms that let you customize application forms and approval flows without needing frequent developer assistance.

Reporting and analytics

Good data makes for better decisions. Your applicant tracking system should offer at-a-glance visibility into what’s working and what’s not, such as time-to-fill, source-of-hire, candidate conversion rates, and so on. And if it allows you to build custom reports and dashboards, all the better.

Scalability and support

What works today might not work tomorrow. As your company grows or expands into new markets, your ATS should grow with you. Look for a provider with responsive support, international capabilities and compliance for employees and contractors, and a clear product roadmap so you’re not left behind as your team evolves.

Hire top talent anywhere with Oyster

An applicant tracking system can help you attract, track, and engage the right candidates—but it’s only the beginning. Once a candidate signs the offer letter, Oyster takes over, helping you seamlessly onboard, pay, and support team members in over 180 countries.

As a global employer of record (EOR), Oyster simplifies the complexities of international employment—managing compliance, compensation, and benefits so you can stay focused on growing your team, not setting up local entities.

Whether you're hiring across borders for the first time or scaling a global workforce, Oyster provides the tools to build the best distributed team while giving each international hire the winning experience that they deserve.

Book a demo to see how Oyster helps you go from great hire to fully supported teammate—anywhere in the world.