Today Artificial Intelligence (AI) has become integral to our life. It has revolutionized every sector from healthcare to transportation. AI has also transformed the recruitment process with an AI-based Applicant Tracking System(ATS). Now, recruiters can easily select and manage job applications efficiently leading to a faster recruitment process.

Here, we’ll explore the working of AI-based ATS and its impact on the recruitment process. Also, we’ll look for some valuable tips to optimize your resume for ATS, increasing your chances of getting selected for the job interview.

resume optimization for ATS

What is an ATS?

ATS is an acronym for “Applicant Tracking System”. It is a software tool used by organizations to manage the recruitment process. It helps in automating various tasks including job posting, resume parsing, candidate screening, and interview scheduling.
It extracts and organizes candidates’ data and helps in finding deserving candidates who meet job requirements. It is a much-needed tool in today’s hiring process for recruiters and job seekers.

Functions of ATS diagram

Why AI-based ATS?

Screening resumes and selecting candidates for the interview without bias is still the biggest challenge. According to a survey, 52% of talent acquisition leaders say the most challenging part of recruitment is identifying the right candidates from a large applicant pool.

Benefits of AI-based ATS

  • The AI-based ATS software automates most of the tasks of the recruitment process. It involves screening resumes and scheduling interviews while recruiters can focus on other tasks like building relationships with candidates and hiring managers.
  • AI-based ATS can help reduce bias in hiring by giving insights on candidates based on their skills, experience, and qualifications.
  • AI-based ATS uses AI algorithms to screen candidates based on criteria like job requirements, education, experience, and skills. The software scan resumes and other application material to select the best candidates for the job.
  • AI-based recruitment can help companies save money by reducing the time and resources required to hire new employees.
AI-based Applicant Tracking System(ATS)

Who uses ATS?

  • According to a survey conducted by SHRM. A total of 1,688 members took part in the survey. It was found that nearly 1 in 4 organizations use automation or AI to support HR activities. Read the report in detail here Automation-AI-Research
  • A survey by Jobscan found that 98% of Fortune 500 companies use ATS, and approximately 66% of large companies and 35% of small organizations use ATS software.
  • The latest survey reports on top ATS software used by Fortune 500 companies are Workday, Taleo, SuccessFactors, BrassRing, and iCIMS.

Evolution of Applicant Tracking System(ATS)

The first applicant tracking system was created in the late 1990s. It was developed to help in the recruitment process by automating repetitive tasks. The arrival of the Internet in the 1990s changed the hiring process. Job Seekers could search and apply online for jobs, and ATS integrates with job boards like Indeed and Monster.

At present, ATS become more flexible and accessible to smaller organizations. Mobile optimization enabled job seekers to apply for jobs easily. AI-based ATS can integrate with social media, offer advanced analytics, and provide valuable metrics for recruitment efficiency.

Recruiters have been using Applicant Tracking Systems for decades to simplify the hiring process and manage candidate data. Although, advancements in AI have brought about a change in ATS capabilities. AI-based systems use NLP(Natural Language Processing) algorithms to extract, analyze and interpret relevant information from resumes and cover letters. AI incorporation enables ATS to choose candidates based on keywords, skills, and education details to easily select eligible candidates.

ATS mostly relies on keyword matching, which may not be an accurate measure of a candidate’s qualifications. It doesn’t consider candidates’ soft skills or cultural fit in the recruitment process. To overcome this issue, various recruitment technologies like candidate relationship management (CRM), video interviewing, and online assessments are used. These technologies have improved the employment process.

AI-based Application Tracking System (ATS) in recruitment

How Does an AI-based Applicant Tracking System Work?

When a candidate submits a job application, the ATS performs the following steps: –

  • Resume Parsing

Applicant Tracking Systems scans resumes, analyzes them, and extracts crucial details like educational qualification, work experience, skills, and contact information. ATS speeds up the recruitment process and helps quickly identify potential candidates who match the job requirements.

Basic Tips for Creating a Resume.

  • Keyword Analysis

The Applicant Tracking System scans the resume and looks for relevant keywords and phrases that match the job description. The more relevant keywords a resume contains, the higher its ranks in the ATS.

  • Skill Assessment

The AI-based ATS analyzes candidates’ skills and educational qualifications to determine whether they align with the job requirements. This helps recruiters identify candidates with the right expertise more efficiently.

  • Ranking and Scoring

ATS assesses and evaluates resumes submitted by job applicants. It uses some criteria like resume content, matching keywords, and skill assessment to analyze and rank each candidate. It compares the resume information with job requirements. Candidates closely matching the criteria get higher scores, indicating a better fit for the position.

ATS scan of the Resume

results of ATS scan of resume
results of ATS scan of resume
results of ATS scan of resume

After uploading your resume on ATS software, it will show your resume score out of 100, as shown in the screenshot. The higher you score, the better your chances of getting a job interview call. You’ll get suggestions on how to fix your resume so that it scores higher. This will help you land your dream job.

Resume for Applicant Tracking System(ATS)

How to Optimize Resume for Applicant Tracking System(ATS)?

Creating an ATS-friendly resume, which increases the chances of job seekers passing the ATS screening and getting noticed by recruiters. Follow these steps: –

  • Targeted Keywords: – Include relevant keywords and phrases found in the job description in the resume. Use variations of keywords throughout your resume to increase the possibility of keyword matches in the ATS.
  • Simple Format: – Use a simple, clean, and straightforward resume format. Avoid using images, graphics, or elaborate designs that may confuse the ATS or cause it to misinterpret content.
  • Titles and Headings: – Properly label sections of the resume with standard titles like “Education”, “Skills”, and “Work Experience”. This assists the ATS in scanning and managing information accurately.
  • Describe the Acronyms: – While industry-specific acronyms are common, spell them out at least once in your resume. This ensures the application tracking system recognizes their relevance to the job and correctly matches your skills.
  • Using Standard File Formats: – Submit your resume in standard formats like PDF or Word. Some applicant tracking systems may have difficulty parsing information from uncommon file formats.
  • Including Relevant Experience: – Show your relevant work experience and skills prominently in your resume. This ensures the application tracking system focuses on the most critical qualifications.
  • Use Bullet Points for Clarity: – Use bullet points to present achievements and responsibilities. This improves readability for both ATS and employers.

Refer to this for more detail – Optimizing Resumes for Applicant Tracking Systems (ATS)

Job resume samples for Applicant Tracking System (ATS)

Read more about Writing Quick, Easy, Effective Resume and Advanced Tips For Enhancing Your Resume.


AI-based ATS has simplified the recruitment process. Organizations have started taking benefits from them improving the speed of their hiring process. It has also helped in improving efficiency and offers job seekers valuable insights to match job requirements. After understanding the working of ATS, job seekers can take advantage of it in the optimization of resumes and land their dream job. With the advancement of technology, AI will play a crucial role in shaping the future of the recruitment process.