What is an applicant tracking system and how do you choose the right one?

An applicant tracking system (ATS) might sound like something only large companies need. However, even small companies can get overwhelmed with emails, resumes and trying to remember each candidate during the hiring process.

In this guide, you’ll learn how an ATS can streamline and organize your hiring process. We’ll also provide a simple framework to help you choose the right ATS solution.

What is an applicant tracking system?

An applicant tracking system (ATS) is software that helps recruiting teams track candidates and job posts. An ATS enables companies to search, filter and sort candidates to find top talent and keep the recruiting process moving.

By definition, an applicant tracking system is a tool for handling everything from posting a job to sending an offer.

Each ATS offers a range of features, and depending on which you choose, may help you:

• Scan resumes to extract skills, experience and qualifications that match your job requirements

• Manage interview schedules by syncing with stakeholder calendars and automating booking

• Send candidate assessments to evaluate skills and monitor completion status

• Generate reports on hiring metrics to improve your recruitment process

• Record notes from every interaction to keep all feedback in one place

• Submit feedback through forms to keep the evaluation process consistent

Think about a typical recruitment process: you post a job on various websites, check multiple email accounts for applications and try to remember which candidates you’ve contacted.

An ATS acts as a central hub to streamline this process. When job seekers apply through your company website, Indeed or LinkedIn, their information automatically goes to your ATS. You get review-ready candidate profiles, making it easier to move them from the “application received” to “phone screen” to “interview” stages.

ATS vs. CRM: what’s the difference?

While an ATS focuses on keeping track of job applications and the hiring process, customer relationship management (CRM) software helps you maintain long-term relationships with candidates and potential clients.

A CRM system acts as a networking tool in recruitment, but its main strength is in sales processes. It can track leads through every stage of the sales funnel and analyze sales performance data to help your team close deals.

Here are the key differences between ATS and CRM software:

While both solutions integrate with other tools, they can also work together to create a complete recruitment ecosystem.

Integrating ATS and CRM systems enables you to create powerful workflows. For example:

• When you close a position in the ATS, it’s easy to automatically transfer promising candidates you didn’t select to your CRM for future opportunities

• If a candidate in your CRM is a strong match for an open role, you can move their information back to your ATS

• Both systems can sync and share candidate interaction history, giving you a complete view of all touchpoints with potential hires

Suppose you interview a highly qualified software developer but don’t have the right position available. In that case, you can set up automated check-ins to nurture the relationship until an opportunity arises.

Benefits of an applicant tracking system

Using recruiting software like an ATS has several benefits besides streamlining the hiring process and communicating with candidates.

According to Jobscan, 98.4% of Fortune 500 companies use an ATS. That level of consensus indicates these systems have become indispensable for efficient recruitment in today’s competitive market.

Here are some top benefits of using an ATS:

• Time savings. Manual resume screening can take hours per position. An ATS reduces this time and the overall time-to-hire by using intelligent parsing technology that organizes information from resumes into easily scannable fields (e.g., education, skills, work experience).

• Improved candidate experience. According to CareerPlug, 52% of candidates have declined a job offer due to a poor candidate experience. Weeks of silence can hurt engagement. Candidates get automatic updates with an applicant tracking system, meaning they feel seen and valued throughout the hiring process.

• Better quality hires. An ATS recognizes skills and keywords and can compare candidates’ resumes against the job requirements. Consistent evaluation criteria enable you to make hiring decisions based on qualifications rather than gut feelings or biases.

• Documentation. An ATS can help you comply with Equal Employment Opportunity Commission (EEOC) guidelines. It automatically saves detailed communication records, giving you complete interaction histories and evaluation criteria to support your decisions.

• Reduced costs. The average cost-per-hire decreases with an ATS. Automating time-consuming tasks cuts down on hours spent on resume screening, application tracking and back-and-forth communications.

Now that you understand the key benefits of using an ATS, let’s examine how these systems support your talent acquisition.

How does an applicant tracking system work?

If you want to use ATS to boost your hiring efforts, you must understand how it fits into your recruitment process.

Here are the six simple steps for using an ATS in recruiting:

1. Job post creation and release

In this step, you create and distribute the job post. The ATS has customizable templates with basic information fields.

An ATS usually provides a framework you can follow to create complete job posts with sections for:

• Company overview

• Job title

• Job description

• Key responsibilities

• Required qualifications

• Preferred qualifications

• Salary range

• Benefit and perks

Once your job post is ready, the ATS can help you distribute it. Your system should have preexisting integrations with career sites like LinkedIn, Indeed or ZipRecruiter. Select which job boards you want to post to and how long the posting should stay live.

In the image below, you can see how a job post for a position at NexRev looks on LinkedIn and the company’s site:

Each job board has associated prices for posting a job. Some posts are free, some require payment per job posting and some have premium posting options. You can pay these job board fees directly through your ATS interface.

When you click “publish”, the ATS will create a unique URL for each job board to track from which platform you’re getting the most applications among other metrics.

2. Application collection

When job seekers begin the application process, the ATS acts as a centralized hub for all applications. It scans each resume and categorizes information into standardized fields (e.g., contact information, languages, experience and certifications).

For example, this dashboard in the ATS Mighty Recruiter tracks applicants by source and shows which source is the most effective.

The ATS’s parsing technology ensures that information is standardized so you can easily compare candidates. For example, if you receive one resume in PDF format and another in Microsoft Word, the ATS converts both into your database format.

The ATS dashboard for application collection typically shows you the following:

• A real-time feed of new applications

• The total number of applications for each position

• The source of each application (which job board or platform)

• The status of each application (new, reviewed, in progress, etc.)

Also, the system will automatically send a confirmation email to candidates and alert you of new applications.

3. Candidate screening

The system creates different tiers of candidates according to how well they meet the requirements. Rather than reject or accept candidates, the ATS organizes the best candidates according to what you defined as “must-have” and “nice-to-have” qualifications.

Your ATS dashboard might show you qualified candidates organized into different match levels:

The screening interface of an ATS can typically allow you to:

• Adjust screening criteria weights to prioritize different qualifications

• View side-by-side comparisons of candidates against your requirements

• See breakdowns of why candidates received their match scores

• Set up knockout questions for absolute requirements

4. Interview management

When you decide to interview a top candidate, you select the type of interview you’ll be conducting (phone screen, technical interview, panel interview, etc.). The ATS will check the availability of all participants through Microsoft Outlook or Google Calendar.

Here’s a look at Workable’s Google Calendar integration:

Integrations like this mean that if you select a panel interview for a salesperson, the system will check participants’ calendars.

Once you select the time slot, the ATS will send calendar invitations to all participants with a unique video conferencing link (through Zoom or Teams) and any other details. The system can also help you manage follow-up emails to keep candidates informed throughout the interview process.

5. Evaluation of candidates and selection

After each interview, the system automatically follows up with interviewers and hiring managers for evaluations. When they submit their feedback, the ATS compiles all this information in your candidate’s profile.

The evaluation dashboard typically indicates which candidates stand out by showing side-by-side comparisons of their competencies. The system weighs overall scores according to your predetermined criteria. For example, if technical skills are 40% of the evaluation, soft skills are 30% and experience is 30%, the system will compute a score automatically.

The ATS might even include visual elements to make the evaluation more intuitive. For example, here’s how a job dashboard appears in Greenhouse ATS:

The image above shows application trends and a pie chart of how many applications you’ve received and their sources. The pipeline view on the right indicates how many top applicants are in each stage of the hiring process.

6. Onboarding

When you choose a candidate, the ATS can help handle your onboarding process. It will send an offer letter based on one of your pre-approved templates with customizable fields for salary, start date or other details.

The onboarding module creates a structured timeline with tasks for the new hire to complete before and during the first few weeks of employment.

For example, the system may automatically trigger the following actions:

Many ATS platforms integrate with other HR tools to automatically transfer a new hire’s information into other systems (payroll, benefits, IT).

How to choose an applicant tracking system: a 4-step framework

Now that you understand how an ATS works, let’s break down how to choose the right one for you into four practical steps:

Step 1: Understand your hiring volume

To choose the right ATS, you must know the volume of candidates you’ll handle. Start by determining:

• How many hires you made last year

• How many hires you plan for this year

• How many open positions you typically have

If the average indicates you’ll hire fewer than 10 positions in a year, basic ATS functionality is enough. You may need a mid-range system if the number is between 10 and 50. Hiring over 50 would require an advanced system (typically for large companies).

Step 2: list your pain points

Listing your pain points will help you prioritize the features you need versus the nice-to-haves. To determine what you need, take a minute to answer these questions:

• Where do you spend most of your time in hiring?

• What tasks do you wish you could automate?

• Which part of hiring causes the most headaches?

• What feedback do candidates give about your process?

For example, if you spend hours scheduling interviews, you should prioritize an ATS that syncs with your calendar and schedules meetings automatically.

Step 3: Calculate your budget

Don’t focus solely on the monthly subscription fee. Factor in resource management by planning for the total investment you’ll need to make, from implementation to ongoing support costs. The real cost of an ATS typically includes:

• Direct costs (monthly subscription)

• Implementation costs (setup, data migration)

• Training costs (getting your team up to speed)

• Ongoing support costs (maintenance and updates)

While setup fees are less common for basic ATS aimed at small companies, mid-range ATS systems for medium-sized businesses often charge them. To calculate your investment, use this formula:

Then, add 25% for the first year’s setup and training costs.

For example, if an ATS costs $100/month and 3 team members need access: ($100 × 3) + 25% = $375 monthly budget needed.

Step 4: Audit your current tools

Check whether the ATS you’re considering integrates with the tools and technology you currently use. Integration will make your tech ecosystem more efficient – the main purpose of having an ATS in the first place.

An audit helps you create a “must-integrate-with” list. For example, if your team heavily uses Google Workspace, choosing an ATS that only integrates with Microsoft tools would create immediate friction.

How to use Pipedrive’s CRM as an ATS

Investing in applicant tracking software might not make sense when you’re just starting or running a small business. If you’re hiring a few people per year, managing applications with simple tools like Google Forms, Excel and your CRM should be easy.

If you’re already using Pipedrive for sales, you can adapt it to handle your recruitment process, which saves you money and the effort of learning a new system.

Start by creating a pipeline that follows the steps of your recruitment process. Instead of sales stages like “Discovery call” and “Negotiation”, you’ll have:

• Application received

• Phone screen

• Interview 1

• Interview 2

• Offer extended

• Hired/Rejected

Each candidate becomes a “deal” in your pipeline. In the deal detail view, you can include all their information (e.g., resumes, interview notes, email threads, links), eliminating the need for multiple spreadsheets for each candidate’s information.

As your top candidates move through the pipeline, you’ll instantly see where every candidate stands in the process.

Reporting for recruitment with Pipedrive’s CRM

Pipedrive’s reporting tools can offer valuable HR analytic insights into your hiring process. For example, you can see how long candidates spend in each stage of your hiring pipeline, which can help you find bottlenecks.

If candidates spend too much time in “Interview 1”, you may be taking too long scheduling interviews and need to streamline the process. You can also check the conversion rates from one stage to the next and the number of candidates per stage.

Integrations for recruitment with Pipedrive’s CRM

Pipedrive can likely integrate with tools you’re already using in your hiring process. For example, you can connect Pipedrive to Google Calendar or Outlook. When you schedule an interview with a candidate from their deal detail view, Pipedrive sends calendar invites automatically.

Collaboration with hiring teams in Pipedrive’s CRM

When an interviewer adds notes about a candidate, everyone involved in the hiring process can see them. You can assign tasks to different team members (e.g., “check references” or “provide feedback”), and everyone can see what needs to be done and when.

Applicant tracking system FAQs

Final thoughts

Ultimately, the best ATS is the one that aligns with your hiring needs and removes administrative headaches. What makes these systems particularly valuable is their ability to combine multiple recruitment tools into a user-friendly platform.

If you’re ready to structure or streamline your recruitment process, Pipedrive’s CRM can help you manage candidates without investing in a dedicated ATS. Start transforming your recruitment process today with a free 14-day trial.