What Is an ATS and Why Does It Matter?

An applicant tracking system (ATS) is software that employers use to collect, organize, filter, and rank job applications. Over 97% of Fortune 500 companies and 66% of all companies with more than 100 employees use an ATS, according to Jobscan research. If you've applied to a job online in the last decade, your resume has almost certainly been processed by one.

How ATS Software Works

When you submit a resume through an online application portal, the ATS is the first thing that touches it. The system performs several operations in sequence:

Step 1: Parsing. The ATS extracts text from your resume file (PDF, DOCX, or plain text) and converts it into structured data. It identifies sections like work experience, education, skills, and contact information. This is where formatting matters — tables, columns, headers/footers, and images can confuse parsers and cause information to be misread or lost entirely.

Step 2: Storage. Your parsed data is stored in the employer's database along with every other applicant's data. Some ATS platforms store applications for years, which is why you sometimes receive emails about roles you applied to months ago.

Step 3: Screening. The ATS compares your parsed data against the job requirements. It looks for matching keywords, skills, qualifications, and experience levels. Some systems use simple keyword matching. More sophisticated systems use weighted scoring algorithms that consider keyword frequency, placement, and context.

Step 4: Ranking. Based on the screening results, the ATS assigns a score or ranking to your application. Recruiters typically review the top-ranked candidates first. A 2024 study by Preptel found that 75% of resumes are rejected by ATS before a human ever sees them. If your resume doesn't make it past the algorithm, your qualifications are irrelevant.

The Major ATS Platforms

Not all ATS systems are created equal. The most widely used platforms include:

Workday — Used by 40% of Fortune 500 companies. Relatively sophisticated parsing and keyword matching.
Taleo (Oracle) — Popular with large enterprises. Known for complex application forms that extract data separately from the resume.
Greenhouse — Popular with tech companies and startups. More modern interface, decent parsing.
Lever — Common in mid-size tech companies. Emphasizes candidate relationship management.
iCIMS — Widely used across industries. Standard keyword-matching capabilities.
SAP SuccessFactors — Large enterprises, especially in manufacturing and healthcare.

Each system has slightly different parsing algorithms and scoring mechanisms. You can't optimize for each one specifically, but you can follow universal best practices that work across all of them.

What ATS Systems Look For

Keywords

The most critical factor is keyword matching. The ATS compares words and phrases in your resume against words and phrases in the job description. The closer the overlap, the higher your score.

This is why tailoring your resume to each job description is essential. A study by TopResume found that resumes tailored to specific job postings received 40% more interview invitations than generic resumes. The tailoring doesn't need to be elaborate — it means ensuring the specific terms used in the job description appear in your resume.

Example: If the job description says "project management" and your resume says "managing projects," some ATS systems won't register a match. Exact phrasing matters.

Skills section

Most ATS systems give significant weight to a dedicated skills section. This is where you list hard skills (technologies, tools, certifications) that directly match job requirements. According to a Jobscan analysis of 1 million resumes, applications with a dedicated skills section scored 15% higher on average than those without one.

Job titles

ATS systems compare your previous job titles against the target role. If you were a "Software Development Engineer" applying for a "Software Engineer" position, some systems may not recognize the equivalence. Where truthful, aligning your listed title with industry-standard terminology improves matching.

Date formatting and employment history

ATS systems parse employment dates to calculate total experience and detect gaps. Use consistent date formatting (e.g., "January 2022 - March 2024" or "01/2022 - 03/2024"). Inconsistent formatting can cause parsing errors that misrepresent your experience.

Education and certifications

Many roles have hard education requirements that the ATS uses as binary filters. If a role requires a bachelor's degree and your education section is improperly formatted or missing, you may be filtered out regardless of your experience.

What Breaks ATS Parsing

Certain resume formatting choices reliably cause problems:

Multi-column layouts. ATS systems read top-to-bottom, left-to-right. Multi-column layouts cause text to be interleaved incorrectly. Your "Skills" column and "Experience" column get merged into nonsense.

Tables. Even simple tables can confuse parsers. Data inside table cells may be extracted out of order or skipped entirely.

Headers and footers. Many ATS systems ignore text in document headers and footers. If your contact information is in a header, the system may not capture it.

Images, icons, and graphics. ATS systems cannot read images. A skill chart represented as a bar graph? The ATS sees nothing. Icons next to your phone number and email? Potentially lost.

Custom fonts. While less common as an issue, some unusual fonts don't render correctly during parsing. Stick to standard fonts: Arial, Calibri, Times New Roman, Garamond.

File format issues. Most ATS systems handle .docx and .pdf files well. Older .doc files, .pages files, and .odt files may parse poorly. When in doubt, use .docx.

According to a 2024 TopResume study, 43% of resumes contain at least one formatting element that causes ATS parsing errors. Nearly half of all applicants are unknowingly sabotaging their own applications with formatting choices.

ATS Optimization Checklist

Here's a practical checklist for making your resume ATS-friendly:

Format:

Use a single-column layout
No tables, text boxes, or graphics
Standard fonts (Arial, Calibri, Times New Roman)
Submit as .docx (safest) or .pdf
Contact info in the body, not headers/footers
Consistent date formatting throughout

Content:

Include a dedicated skills section with keywords from the job description
Use standard section headings: "Experience," "Education," "Skills," "Certifications"
Mirror exact keywords and phrases from the job description where truthful
Spell out acronyms at least once (e.g., "Search Engine Optimization (SEO)")
Include both long-form and abbreviated versions of credentials (e.g., "Project Management Professional (PMP)")

Structure:

Most recent experience first (reverse chronological)
Clear job title, company name, and dates for each role
Bullet points for accomplishments (not paragraphs)
Quantify achievements where possible (numbers are universally parseable)

Testing Your Resume

You don't have to guess whether your resume will pass ATS screening. Several approaches let you verify before submitting:

Keyword matching tools. Tools like Retold's free keyword checker let you compare your resume against a specific job description and see exactly which keywords match and which are missing. This is the fastest way to identify gaps.

Plain text test. Copy your resume text and paste it into a plain text editor (Notepad, TextEdit). If the text appears jumbled, out of order, or missing sections, that's approximately what the ATS sees. Fix the formatting issues and try again.

ATS simulation tools. Some tools simulate how an ATS would parse your resume and show you the structured data output. This lets you verify that your sections, dates, and skills are being read correctly.

According to Jobscan, candidates who test and optimize their resumes before submitting see a 30% increase in interview callbacks on average. The time investment — typically 10-15 minutes per application — pays off significantly.

Common Myths About ATS

Myth: ATS systems reject all resumes with formatting. Reality: Most modern ATS platforms handle basic formatting (bold, italic, bullet points) just fine. The issues arise with complex layouts, tables, and graphics.

Myth: You need to "trick" the ATS with white text keywords. Reality: This technique (hiding keywords in white text) is detectable by modern ATS systems and by recruiters. It can get your application flagged or blacklisted. Never do this.

Myth: A perfect ATS score guarantees an interview. Reality: ATS screening is the first filter, not the only one. After passing the ATS, your resume still needs to impress a human reviewer. A resume stuffed with keywords but lacking clear achievements won't perform well at the human review stage.

Myth: Small companies don't use ATS. Reality: While adoption rates are lower among small businesses, affordable cloud-based ATS platforms (like JazzHR and BreezyHR) have made these tools accessible to companies with as few as 10 employees. According to Capterra, 75% of small and mid-sized businesses now use some form of ATS.

The Human Element

It's easy to become so focused on ATS optimization that you forget your resume also needs to work for human readers. The best approach optimizes for both:

Clear, scannable formatting that both machines and humans can read quickly
Quantified achievements that ATS systems parse accurately and that impress recruiters
Industry-standard keywords that match ATS criteria and demonstrate domain fluency
Honest, accurate content that builds trust with human reviewers

The goal isn't to game the system. It's to present your genuine qualifications in a format that both machines and humans can evaluate fairly. When you tailor your resume to a specific job description, you're not manipulating anything — you're communicating clearly about why you're a match for that role.

Frequently Asked Questions

Can an ATS read PDF files?

Most modern ATS platforms can parse PDF files accurately, but .docx files are generally the safest choice. The issue with PDFs is that some are created as images (scanned documents) rather than text-based files, which ATS systems cannot read. If you submit a PDF, ensure it was created digitally (from Word or a similar application) rather than scanned. You can verify by trying to select and copy text from the PDF — if you can't highlight individual words, the ATS probably can't read them either.

How do I know which ATS a company uses?

You can sometimes identify the ATS from the application URL. Greenhouse uses "boards.greenhouse.io," Lever uses "jobs.lever.co," and Workday uses "myworkdayjobs.com." Knowing the specific ATS isn't essential for optimization, though, since the universal best practices — clean formatting, keyword matching, standard sections — work across all major platforms. Focus on these fundamentals rather than trying to optimize for a specific system.

Does applying through LinkedIn Easy Apply bypass the ATS?

No. LinkedIn Easy Apply still submits your information to the employer's ATS in most cases. The convenience of Easy Apply is in the application process, not in bypassing screening. Your LinkedIn profile data and any attached resume are typically imported into the employer's ATS for standard processing. According to LinkedIn's own data, Easy Apply applications have similar callback rates to direct applications when the underlying qualifications match.

How important is the skills section for ATS scoring?

Very important. According to Jobscan's analysis of over 1 million resumes, a dedicated skills section is one of the strongest positive signals for ATS scoring. List technical skills, tools, and certifications that match the job description. Use the exact terminology from the posting. Place the skills section near the top of your resume for maximum visibility. ATS systems typically weigh skills section matches heavily because they represent explicit competency claims.

Should I use a different resume format for ATS versus human readers?

No. The best resume format works for both. Use a clean, single-column layout with standard section headings, bullet points for achievements, and a dedicated skills section. This format is easily parsed by ATS algorithms and easily scanned by human recruiters. Avoid the temptation to create a "creative" version for humans and a "plain" version for machines. Consistency in formatting demonstrates professionalism, and you often don't know which format will be seen first.