How Does an ATS Work? A Complete Guide to Applicant Tracking Systems
An Applicant Tracking System (ATS) is software used by over 98% of Fortune 500 companies to manage their hiring process. It automates resume collection, parsing, screening, and ranking—meaning your resume is evaluated by an algorithm before any human sees it. Understanding how an ATS works is the first step toward getting your resume past the digital gatekeeper.
What Is an Applicant Tracking System?
An Applicant Tracking System is a software application that automates the recruitment workflow from job posting to candidate hiring. Companies use ATS platforms to handle the massive volume of applications they receive—large employers may get 250+ resumes per open position.
The ATS serves as a centralized database where all candidate information is stored, searched, and filtered. It replaces manual resume review by automatically extracting information from resumes, categorizing candidates, and ranking them based on how well they match the job requirements.
Popular ATS platforms include Workday, Greenhouse, Lever, Taleo, iCIMS, and SmartRecruiters. Each has its own parsing engine and ranking algorithm, but they all follow a similar core workflow.
The ATS Workflow: Step by Step
When you submit a resume through a company's career portal, the ATS processes it through several stages. First, the system receives your file and converts it into a structured data format through a process called parsing. The parser extracts your name, contact information, work experience, education, skills, and other relevant details.
Next, the ATS compares the extracted data against the job description's requirements. It looks for matching keywords, qualifications, years of experience, education level, and other criteria the recruiter has configured. Based on this comparison, the system assigns a relevance score to your application.
Finally, the ATS ranks all candidates by their scores and presents the top-ranked resumes to the recruiter. In many companies, only the top 25-30% of applicants ever get reviewed by a human.
- Resume received and file format validated (PDF, DOCX, or plain text)
- Parsing engine extracts text and categorizes data into fields
- Keyword matching compares resume content against job requirements
- Scoring algorithm calculates a relevance percentage
- Recruiter reviews top-ranked candidates in the ATS dashboard
How ATS Parsing Works
Resume parsing is the most critical step in the ATS workflow. The parser uses Natural Language Processing (NLP) and pattern recognition to identify different sections of your resume and extract structured data from unstructured text.
Modern parsers look for common section headings like 'Work Experience,' 'Education,' 'Skills,' and 'Certifications.' They identify dates, job titles, company names, and degree information using contextual clues. For example, if the parser sees 'Bachelor of Science' followed by a university name and a year, it categorizes this as education data.
However, parsers are not perfect. Complex layouts with tables, columns, graphics, or unusual fonts can confuse the parsing engine, causing it to misclassify or skip information entirely. This is why ATS-friendly formatting is essential.
- Text extraction converts your file into plain text
- Section detection identifies resume segments using heading patterns
- Entity recognition extracts names, dates, locations, and organizations
- Field mapping assigns extracted data to database fields
- Validation checks for completeness and consistency
ATS Scoring and Ranking
After parsing, the ATS scores your resume based on configurable criteria set by the recruiter. The most common scoring factors include keyword match percentage, years of experience, education level, location, and specific certifications or skills.
Keyword matching is typically the heaviest factor. The ATS compares words and phrases in your resume against those in the job description. Some systems use exact matching, while more advanced ones use semantic matching to recognize synonyms and related terms.
The final score is usually presented as a percentage or ranking position. A score above 80% typically means your resume is a strong match, while scores below 50% often mean automatic rejection. However, these thresholds vary by company and role.
| Scoring Factor | Typical Weight | What It Measures |
|---|---|---|
| Keyword Match | 40-50% | How many required keywords appear in your resume |
| Experience Level | 20-25% | Years of experience matching the job requirement |
| Education | 10-15% | Degree level and field of study match |
| Skills Match | 10-15% | Technical and soft skills alignment |
| Certifications | 5-10% | Relevant professional certifications |
Key ATS Features Recruiters Use
Beyond resume screening, modern ATS platforms offer a suite of tools that recruiters use throughout the hiring process. Understanding these features helps you tailor your application strategy.
Boolean search allows recruiters to search the candidate database using AND, OR, and NOT operators. For example, a recruiter might search for 'Python AND (Django OR Flask) NOT junior' to find experienced Python web developers. This means the specific terms on your resume determine whether you appear in search results.
Many ATS platforms also integrate with job boards, email systems, and interview scheduling tools. Some offer AI-powered candidate matching that goes beyond keyword matching to analyze work history patterns and career trajectory.
Pro Tips
Use standard section headings like 'Work Experience,' 'Education,' and 'Skills' so the ATS can correctly parse your resume sections
Mirror the exact keywords and phrases from the job description in your resume—ATS systems look for precise matches
Submit your resume in .docx format unless the posting specifically requests PDF, as DOCX is more reliably parsed by most ATS platforms
Include both spelled-out terms and acronyms (e.g., 'Search Engine Optimization (SEO)') to catch both matching patterns
Keep your formatting simple—avoid tables, text boxes, headers/footers, and multi-column layouts that confuse parsers
Common Mistakes to Avoid
Using creative or graphical resume templates that ATS parsers cannot read properly
Submitting a resume without the specific keywords from the job description
Placing important information in headers, footers, or text boxes that parsers skip
Using abbreviations without spelling them out, causing the ATS to miss keyword matches
Applying with image-based PDFs (scanned documents) that have no extractable text