An applicant tracking system (ATS) is a software application that enables the electronic handling of recruitment needs. An ATS can be implemented or accessed online on an enterprise or small business level, depending on the needs of the company and there is also free and open source ATS software available. An ATS is very similar to customer relationship management (CRM) systems,  but are designed for recruitment tracking purposes. In many cases they filter applications automatically based on given criteria such as keywords, skills, former employers, years of experience and schools attended. This has caused many to adapt resume optimization techniques similar to those used in search engine optimization when creating and formatting their résumé.
A dedicated ATS is not uncommon for recruitment specific needs. On the enterprise level it may be offered as a module or functional addition to a human resources suite or Human Resource Information System (HRIS). The ATS is expanding into small and medium enterprises through open source or software as a service offerings (SaaS).
The principal function of an ATS is to provide a central location and database for a company's recruitment efforts. ATSs are built to better assist management of resumes and applicant information. Data is either collected from internal applications via the ATS front-end, located on the company website or is extracted from applicants on job boards. The majority of job and resume boards (LinkedIn.com, Monster.com, Hotjobs, CareerBuilder, Indeed.com) have partnerships with ATS software providers to provide parsing support and ease of data migration from one system to another. Newer applicant tracking systems (often referred to as next generation) are platforms as a service whereby the main piece of software has integration points that allow providers of other recruiting technology to plug in seamlessly. The ability of these next generation ATS solutions allows jobs to be posted where the candidate is and not just on job boards. This ability is being referred to as Omnichannel Talent Acquisition.
Recent enhancements include use of artificial intelligence (AI) tools and natural language processing (NLP) to facilitate intelligent guided semantic search capabilities offered through cloud based platforms that allow companies to score and sort resumes with better alignment to the job requirements and descriptions.
With the advent of ATS, resume optimization techniques and online tools are now used by applicants to increase their chances of landing an interview call.
Another benefit of an applicant tracking system is analyzing and coordinating recruitment efforts - managing the conceptual structure known as human capital. A corporate career site or company specific job board module may be offered, allowing companies to provide opportunities to internal candidates prior to external recruitment efforts. Candidates may be identified via pre-existing data or through information garnered through other means. This data is typically stored for search and retrieval processes. Some systems have expanded offerings that include off-site encrypted resume and data storage, which are often legally required by equal opportunity employment laws.
Applicant tracking systems may also be referred to as talent acquisition and management products (TAMP) and are often provided via an application service provider or software as a service (SaaS) model. The level of service and cost can vary greatly across providers. In the UK and Ireland, Applicant Tracking Systems which are specifically for Agency Recruiters are often referred to as Recruitment Software and this is a term used mainly in the recruitment agency industry (representative bodies include the REC in the UK and the NRF in Ireland). Although proprietary systems dominate the ATS space, there are open-source alternatives.
As the data held within recruitment software is predominantly personal data, it is often tightly controlled by data protection legislation, preventing the data from being held offshore, which frequently places a legal restriction on the use of SaaS offerings. Legal firewalls are automatic with the software. That is can legally exclude candidates based on variety of areas. This includes race, religion, education, national origin, marital status and sexual orientation. There are special features an HR department can use to encrypt and hide in the software to be dumped if code is looked at. It can be linked to social media and other option database such as other companies' HR data and files, health care records, mental and criminal records, and voting records.