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What Is an Applicant Tracking System and How Does it Work?

Key Takeaways

Centralize all candidate information in one searchable database to stop wasting 3+ hours daily hunting through emails and spreadsheets when clients ask about candidates from previous searches.

Automate resume screening and ranking so your team focuses on conversations with pre-qualified candidates instead of manually sorting through hundreds of applications for each job order.

Give clients real-time visibility into their job orders through self-service portals where they can review candidates and leave feedback, reducing daily status update calls.

Choose integrated ATS and CRM platforms over separate tools to see how your placement history connects to business development opportunities and avoid data silos between recruiting and sales activities.

In 2024, 98.4% of Fortune 500 companies were using an applicant tracking system, with 492 of the top 500 firms relying on one to manage their hiring processes efficiently. These numbers tell a clear story: when nearly every major corporation invests in ATS technology, it’s not just a trend but a fundamental shift in how hiring gets done.

For staffing agencies still juggling candidates through spreadsheets, switching between multiple tools, and manually tracking follow-ups, this reality hits differently. Your clients want faster results, top candidates disappear to competitors within days, and compliance rules keep getting more complex. Meanwhile, you’re spending hours on manual tasks that could be automated, watching opportunities slip away because your current hiring process can’t keep up.

 

What Is an Applicant Tracking System?

An applicant tracking system is software that helps recruiters and hiring managers handle the entire recruitment process. Think of it as your digital command center where job postings, applications, and candidate information all live together, making it possible to track every interaction from the first resume submission to the final placement.

These systems do more than just store information. They bring together database storage with smart automation, putting everything you need in one place: job descriptions, candidate profiles, email threads, interview notes, and contracts. No more hunting through folders or wondering which version of a resume is the latest one.

What sets modern applicant tracking systems apart from simple contact databases is their ability to work for you. They scan resumes with keywords, rank candidates based on how well they match job requirements, and use artificial intelligence to surface the best potential matches. This means you spend less time sorting through applications and more time having meaningful conversations with candidates and clients.

Manual Recruiting vs. Applicant Tracking Systems

Aspect	Manual Recruiting	Using an ATS
Resume Screening	Manual sorting through emails or files	Automated parsing and keyword-based filtering
Job Posting	Posted one-by-one to each job board	One-click distribution across multiple platforms
Candidate Communication	Email chains, spreadsheets, scattered follow-ups	Centralized messaging and status tracking
Collaboration	Slack messages, email threads, manual notes	Shared dashboards with real-time team access
Scheduling Interviews	Email back-and-forth or calendar juggling	Integrated scheduling tools with auto-reminders
Compliance Tracking	Manual documentation and audits	Built-in GDPR/EEOC compliance and audit logs
Reporting & Analytics	Time-consuming, manual reporting	Real-time dashboards and customizable reports
Time-to-Fill	Slower due to bottlenecks and admin burden	Faster with automation and streamlined workflow
Candidate Experience	Inconsistent communication and long delays	Branded portals, timely updates, smoother experience
Scalability	Hard to manage as hiring volume increases	Scalable system that grows with your agency’s needs

 

How Does an ATS Work?

Let me walk you through what happens when you start using an ATS:

1. Centralizing Candidate Data

You know that moment when a client calls asking about a candidate from last year, and you’re frantically searching through old emails? That stops being a problem.

Everything goes into one place. Even simple legacy applicant tracking systems give you a centralized platform where all your candidate info lives:

• Resume parsing: Drop in a resume, and boom. Name, phone number, work history, and skills all get pulled out automatically. Making resume screening easier and faster
• Communication tracking: Had a great phone call with someone last Tuesday? It’s logged. Sent follow-up emails? They’re there too.
• Document management: References, contracts, certifications. All filed away where you can find them later.
• Profile enrichment: The system grabs LinkedIn info and other details to fill out candidate profiles.

2. Automating Admin Tasks

This part will save your sanity. All those routine tasks that eat up your day? The system handles them:

• Automated screening: Tell it what you want once. It filters every application that comes in based on your criteria.
• Interview scheduling: Candidates pick their own time slots from your calendar. No more phone tag.
• Communication sequences: Follow-ups happen automatically. Candidates get personalized communication updates without you having to remember.
• Notification systems: Get pinged when someone moves through your pipeline or when you need to take action.

3. Improving Candidate Matching

Here’s where it gets really helpful. The system learns what makes a good match for your clients. According to Gartner research, AI-enabled candidate skills matching works best when combined with other recruiting tools:

• Skills comparison: Every candidate screening gets scored on how well they fit specific roles. No more guessing.
• Pattern recognition: The system notices which placements worked out well and suggests similar candidates.
• Ranking systems: Your best candidates rise to the top automatically based on placement history.
• Status transparency: Candidates check their own status online instead of calling you every other day.

4. Supporting Compliance and Reporting

Compliance used to be a nightmare. Now it mostly runs itself:

• Data protection: GDPR, CCPA, all those privacy rules get handled automatically. One less thing to worry about.
• Audit documentation: Everything gets tracked. When auditors show up, you’re ready.
• Performance metrics: Finally, know which job boards really work and how long your placements really take.
• Custom reporting: Pull reports on anything. Placement rates, team performance, and diversity metrics.

5. Enabling Client Collaboration

Your clients stop calling every day asking for updates because they can see everything themselves:

• Progress visibility: Clients log in and see exactly where their jobs stand. How many potential candidates, where everyone is in the process.
• Approval workflows: They review qualified candidates in the system instead of you sending endless emails back and forth.
• Feedback capture: Proper feedback forms instead of trying to remember what they said on a phone call last week.
• Candidate portal access: They can check candidate profiles and status updates whenever they want.

 

Why Staffing Firms Rely on ATS Software

Not all staffing agencies are built the same way. A temp agency filling warehouse shifts has completely different needs than a firm placing CFOs. That’s why ATS adoption varies so much across the industry. But here’s what’s interesting: nine out of 10 employers wouldn’t be using ATS technology if it weren’t solving real problems for them.

• Temp Staffing Agencies are all about speed and numbers. Try filling 200 warehouse positions in a week using spreadsheets and you’ll understand why automation matters. These agencies post to dozens of job boards, screen hundreds of applications, and coordinate with multiple clients simultaneously. Manual processes break down fast when you’re operating at that scale.
• Executive Search Firms play a completely different game. They might work on three placements for six months each. Every conversation matters. Every detail about a candidate’s background, preferences, and performance in job interviews needs to be documented and easily accessible. They need systems that can track complex, relationship-heavy processes over extended timeframes.
• Healthcare Staffing deals with regulations that would make your head spin. Nursing licenses expire. Certifications vary by state. Background check requirements differ between hospitals. When a trauma center calls needing a cardiac nurse for tonight’s shift, you need to know immediately who’s available and properly credentialed. Manual tracking of these requirements isn’t just inefficient, it’s risky.

 

Signs Your Agency Needs an ATS

Most agencies know they need better software applications long before they make the change. The tipping point usually comes when these problems become too painful to ignore. Research shows effective ATS implementation can decrease the average hiring cycle by as much as 60%, but recognizing these warning signs helps you act before things get desperate:

• Spreadsheet dependency: Multiple Excel files for the same job order. Three different versions of the candidate list. Someone accidentally deletes the master file. You know this pain if you’ve lived it.
• Communication gaps: Candidate called last Tuesday. You meant to follow up Wednesday. It’s now Friday and they just accepted another offer. These missed connections add up quickly and cost real placements.
• Client frustration: When clients start calling twice a day asking for updates, it means they don’t trust your recruitment process. They can’t see what’s happening, so they assume nothing is happening.
• Compliance stress: Audit time arrives and you’re digging through emails looking for signed agreements from last year. If gathering compliance documentation takes days instead of minutes, you need better systems.
• Reporting difficulties: Client wants to know your average time to fill. You spend three hours pulling data from different sources and the numbers still don’t look right. Good reporting shouldn’t be this hard.

How TrackerRMS Stands Out as an ATS

TrackerRMS built their platform specifically for staffing agencies who got tired of juggling multiple systems. Instead of buying separate tools for candidate tracking, client management, and business development, you get everything integrated from day one.

• Integrated Operations: Your candidate data talks to your client records. Your placement history connects to your business development pipeline. Sales activities inform your recruitment decisions. This isn’t just convenient, it changes how you run your recruitment strategy because you can see connections and patterns that were invisible before.
• Self-Service Functionality: Candidates update their own availability. Clients review submissions and leave feedback directly in the system. This isn’t about cutting people out of the recruiting process – it’s about freeing your time for the conversations and relationships with candidates that drive placements.
• Compliance Management: Data protection rules, audit trails, compliance reports. These requirements get handled automatically instead of becoming monthly panic attacks. You can focus on growing your business instead of worrying about regulatory requirements.