How applicant tracking systems (ATS) actually work — and what's worth optimizing

If you're on the job hunt, you probably know about ATS (applicant tracking system). It's how most recruiters manage hiring, from posting roles to tracking candidates and deciding who to move forward with.

You might even view ATS as the enemy, or something that you need to "beat" or "trick." The reality isn't quite so scary. While understanding how ATS works can improve your odds of being called in for a role, the good news is that these systems reward clarity, not arbitrary jumping through hoops. This is what ATS actually does, what it doesn't do, and what's worth optimizing as you prepare your resume for a job application.

What ATS software actually does

Popular ATS platforms like Greenhouse and Workday act as centralized hubs where organizations can post and manage roles they're hiring for and track candidates through various stages of the hiring process. It also parses resumes by scanning them for the most relevant keywords for a given role and scoring and flagging applicants based on that information.

The upside for employers is clear: ATS streamlines the process of finding the best candidates by posting open roles across various job boards, and it makes managing those candidates easier. There's potential upside for job candidates as well: Ideally, by having a resume that closely addresses the key competencies of a job listing, a candidate will have a fair, unbiased chance of getting considered for that role, even if they don't have a personal connection to the hiring manager. Of course, ATS is software, so it's up to the hiring manager to act on that information, but the point is that ATS isn't automatically working against you when you apply for a job.

A hiring manager will still review candidates' applications and make the final call on whether to move a candidate forward or not, but ATS can help surface the most suitable resumes to streamline the process.

What ATS does not do

ATS cannot automatically reject candidates based on their resumes alone. If ATS does reject candidates, it's because other aspects of their information clearly fall outside the scope of the role requirements, such as a salary target that's beyond the listed range. In that case, a rejection would happen because of application rules, not resume parsing.

One thing that is true: ATS is very literal. It can't intelligently bridge the gap between keywords it expects to find in a resume and synonyms for those words. So if you're applying for a project management role that mentions "team management" and your resume only mentions "leading groups," it's possible that the ATS might overlook your resume entirely — and this becomes more and more likely if you're missing multiple expected keywords.

Finally, ATS isn't great at parsing complicated resume layouts, such as grids and tables. It's best to keep your resume formatting as simple as possible to reduce the risk that the system overlooks any of your key information.

How resumes are parsed

To reiterate: ATS is very literal. So when it comes to making sense of what's on your resume, it's looking for exact-match relevant keywords.

The best thing you can do to help ATS read your resume effectively is to match your resume to a job description. That doesn't mean you need to embellish or lie; it just means you should use the same exact terminology from the job description, because that's exactly what the ATS will be looking for.

Why formatting matters less than people think

When it comes to resume formatting, less is usually more. You don't need to impress the system by creating a custom header in Photoshop — in fact, that only increases the chance that the ATS won't be able to correctly read the information in your header.

What does matter when it comes to resume formatting is consistency. Use one font throughout, and save your resume as a .pdf or .docx file — whichever format the job application calls for. In short, what matters with resume formatting is eliminating opportunities for your resume to trip up the ATS trying to read your information.

Where humans re-enter the process

ATS acts as an initial filter for applications, using keyword parsing to give human hiring managers information about how well candidates' resumes match up with job descriptions. But from there, it's up to the hiring manager to decide what to do with that information.

The human hiring manager is the one who ultimately makes the call on who to move forward in the interview process and who to move to the "reject" pile. Ideally, the hiring manager also reviews all the candidates the ATS didn't surface for a given role, just to ensure that the system didn't filter out any viable applicants. This was the case when I hired for various roles as a manager at Business Insider, but it of course varies on the company, its size, and its operating procedures.

Once a hiring manager decides to not move forward with a given candidate, ATS can automate the process of letting them know they won't be moving forward with their application. But at the end of the day, all hiring decisions fall on the human, not on the software they're using to help streamline the hiring process.

What ATS optimization is worth doing vs. ignoring

Here are the most important ATS dos and don'ts, plus the things that don't make as much of a difference as you think.

ATS dos

• Do match your resume wording to the job description.
• Do follow any provided instructions on resume formatting (e.g., .pdf vs. .docx files).
• Do make sure you address any job requirements that you have experience with in your resume and cover letter.
• Do tailor your resume to the specific job you're applying for rather than using a "spray and pray" approach. Keep every bullet interview-defensible — if you can't back it up with a specific example, leave it out.
• Do preview your resume file before you upload it to confirm everything looks alright, especially if you're converting it to a different file type.

ATS don'ts

• Don't add extra non-text elements that could cause the system to not "understand" the content of your resume.
• Don't match every single word of the job description — you're aiming for keyword match, but not exact content match.
• Don't use headers or footers — introducing extra elements increases the risk that the system will not be able to read these sections of your resume.

Frequently asked questions about ATS

Can ATS automatically reject my resume?

ATS cannot automatically reject candidates based on their resumes alone. If ATS does reject candidates, it's because other aspects of their application fall outside the scope of the role requirements, such as a salary target beyond the listed range. Rejections happen because of application rules, not resume parsing.

What resume format works best for ATS?

Keep your resume formatting simple. Use one font throughout and save as a .pdf or .docx file, whichever format the job application calls for. Avoid grids, tables, custom headers, and non-text elements that could cause the system to misread your content.

Does ATS understand synonyms?

ATS is very literal and cannot intelligently bridge the gap between keywords it expects and synonyms. If the job description mentions "team management" and your resume only says "leading groups," the ATS might overlook your resume. Use the same terminology from the job description.

Should I match every single word from the job description?

No. You're aiming for keyword match on the key competencies and requirements, not exact content match of the entire job description. Focus on matching the most important terms that reflect the core skills and responsibilities of the role.