Don't fear the ATS: Avoid getting scammed and optimize your resume for success

Today I learned something. I changed my LinkedIn flag to Open to Work, which posts to a #OpenToWork hashtag which is apparently monitored by a large group of individuals and companies with various goals which might or might not align with my own of finding a new job.

Not one to turn down a free educational opportunity, I chatted with the 10 or so people who messaged me within about a minute of flipping that Open to Work flag to see what they wanted. Oddly, there was a script of sorts which most of them followed. Their sales funnel was to engage me with an opener like "I noticed you're exploring new career opportunities. What has led someone with your level of expertise to the job market? Was it due to downsizing?" They would then start talking about about various acronyms such as ATS, LPS, keyword scoring, resume scanners, machine parsable resume templates, and other terminology that I had heard of, but hadn't really thought about much. Basically, they said that the way I had structured my resume was keeping my resume from being seen. It was being caught by the filter that companies use to manage applications before ever being seen by a real person. They then told me that they had the solution and that I could have it for the low low price of between $50 and $100 for their resume writing and optimization services. Given that I have been in technology for a while, I was skeptical. It smacked of salesy BS. Worse, it was salesy BS that was targeted at people who are often in a vulnerable place because they need a job.

Since my background is in software and analysis, I decided to dig into what they were saying, starting while I was chatting with them. I wanted to validate that my approach was reasonable and determine if what they were saying was true or false.

So I defined a few questions to get me started:

1. What is the value of an Applicant Tracking System (ATS) to a company?
2. What is the workflow that a job goes through before it is seen by a hiring manager?
3. If a software is used to filter applications, how does it work?
4. What makes a resume "machine parsable"?
5. How likely am I to run into an ATS? Who uses ATS? What does the market look like?

What is the value of an Applicant Tracking System (ATS) to a company?

The first question is of course, where's the value? If a company doesn't gain a distinct benefit from using a software, they won't use it because they have to buy it and integrate it into their other systems. To find the value of an ATS, I first needed to define it. The way that the people trying to sell me something described it, it was like a magical black box that resumes went into and that a score came out of. Being in tech, I nodded a little, but with the help of Google, I defined it as:

Applicant Tracking System (ATS) - A software application used by companies to manage their recruiting and hiring process. It helps streamline tasks involved in finding and hiring new employees, from collecting and storing resumes to tracking applicant progress and automating communication.

That seems pretty useful. I have used one when hiring at multiple jobs, so I see the value.

What is the workflow that a job goes through before it is seen by a hiring manager?

My next question was, what is the process? I can speak to my own experience as a hiring manager, but broadly:

1. The manager identifies a need for a new job and defines a job description or scope of work for the job.
2. The job is approved and posted.
3. Job seekers begin submitting applications, which are added to the ATS for that job.
4. The ATS scans the resumes and converts them to something it can read. It then applies filters based on keywords or date ranges that limit the number of applications that HR or the Hiring Manager have to review.
5. HR or the Hiring Manager review applications and decide who to talk to and who to reject.
6. After interviewing potential employees, a candidate or candidates are chosen (or not) and an offer is made for the job.

But how is this different from what we have always done? We have added a system (ATS) to manage what happens between the application process and the review process, but what does the ATS actually do and why is it needed?

The answer to this was pretty interesting. Basically, when internet job applications became widespread, online job boards significantly increased the number of job applications that companies received, making manual resume screening and tracking increasingly difficult. This led to ATS software becoming widely adopted in the late 1990s and early 2000s. With the pandemic and the rise of remote work, the number of applications increased again, making the problem worse. Applicants are drawn to remote roles that pay well. This means that there is a disproportionate number of applications to those roles. According to LinkedIn, there were twice the number of applications to remote roles than there were remote roles available. In the US, 10% of posted roles are fully remote, yet they received 46% of all applications.(1) 

When a lot of jobs are able to be worked remotely, it really opens up the pool of potential applicants to fill those roles. Hiring Managers and HR get overwhelmed if they try to review all applications, so they don't. Instead, they use Applicant Tracking Systems (ATS) to screen and filter applicants in order to manage the hiring process. (It is important to note that there has been a strong movement back to on site or hybrid roles in the last year, but the damage has already been done.)

If software is used to filter applications, how does it work?

When a job is added to the ATS, the job is the parent issue that the applications from potential employees will be attached to as children. The goal of the software is to make the process easier for HR and Hiring Managers. In general, it:

1. Stores and organizes the jobs in a consumable format.
2. Converts applicant information from multiple sources into a consistent format.
3. Tracks the application process from start to finish.
4. Automates tasks like posting jobs, scheduling interviews, and sending communications.
5. Screens resumes to filter out unqualified submissions.
6. Ranks and scores candidates to help hiring managers know who to interview.
7. Generates reports to provide insights and analytics on the hiring process. This is useful for making data driven decisions and for ensuring compliance.

What makes a resume "machine parsable"?

Another question I had was if my resume was "machine parsable". This merely means that it is formatted in a way that an ATS can easily extract information such as my contact details, work experience, time in certain roles, skills, and education. It doesn't matter if your resume is in PDF or Word as modern ATS software can parse PDFs. It is important to use clear headings, standard fonts, and bullet points. Avoid using tables or images, as these might not be readable by the system.

Personally, I prefer submitting PDFs as I can control what the resume looks like if a Hiring Manager opens it to view. Since I have applied to companies that use an ATS, I already knew that my resume could be ingested by multiple systems. I also checked parsability using an AI.

How likely am I to run into an ATS? Who uses ATS? What does the market look like?

The prevalence of ATS software varies depending on the size of the company:

1. Fortune 500 Companies: Almost all (around 98%) of Fortune 500 companies utilize ATS.
2. Large Companies: 70% of large companies use an ATS.  
3. Small and Mid-Sized Businesses: 20% of small and mid-sized businesses have adopted ATS.  

This is the market share (October 2023) of ATS software at Fortune 500 companies(2):

• Workday - 38.5%
• SAP/Successfactors - 15.1%
• Taleo - 8.4%
• ICIMS - 7.7%
• Oracle - 5.3%
• Phenom People - 4.7%

How can I use this information?

My takeaways from all of this is that ATS software is something I should pay attention to, but it is neither magic, nor something that I should be afraid of impacting my ability to get hired. The problem is that since it is so easy to submit job applications, it is also easy to fall into the trap of applying without really considering the role and the value that the company hiring is trying to recognize.

Activity does not equal productivity.

1. Focus on high quality application submissions where your experience is a good fit for the job description as published. If all of your applications are low quality and are getting filtered out, it doesn't matter how many you submit, that work has no value.
2. Pay attention to the language that is used in the job description. If filtering is applied, this is going to be part of the algorithm that the ATS uses to filter resumes.
3. If you think your resume needs work, it might. Take the time to work on your resume as it is the basis for all of your applications. Do not allow spelling errors or grammar mistakes to be the flag that removes you from consideration.
4. If you have fully filled out your LinkedIn Profile, you can export an ATS friendly starter resume from your profile by clicking "more" -> "Save to PDF". It's not pretty, it's probably too long, but it will give you a place to start.
5. Use AI to assist you. To check machine parsability, upload your resume to an AI and use a prompt like: "Parse my resume as if you were an ATS."
6. Use AI to assist you. I like to use a prompt like: "On a 0 to 100 scale, score my resume as if you were an ATS system. Use the job roles in the previous conversation. Provide the answer in a table with the job title, company, and score." If I don't have a match of above 70 or 80 and I don't feel that I can update my resume to show how my experience matches what the job description is looking for, I will pass on that job.