What is an ATS and How Does It Work? Complete 2026 Guide

Understanding Applicant Tracking Systems: Your Gateway to Getting Hired in 2026

Navigating the job market in 2026 can feel overwhelming, especially when it comes to technology-driven hiring processes. If you've ever submitted a job application online and never received a response, it’s likely that your resume never reached a human evaluator. The potential culprit? An Applicant Tracking System (ATS). Understanding how these systems operate is crucial for landing your dream job this year.

What Exactly is an ATS?

An Applicant Tracking System is a software application that employers utilize to collect, sort, and rank job applications. Think of it as a digital gatekeeper that filters candidates before they reach the hiring manager. Understanding this system can significantly elevate your chances of landing interviews.

Startling Statistics on ATS Usage

Did you know that over 99% of Fortune 500 companies employ an ATS? Moreover, approximately 75% of all employers utilize this technology to manage the flood of applications. Popular ATS platforms include Workday, Greenhouse, Lever, iCIMS, and Taleo. Each has unique parsing algorithms and ranking methods, but they all aim to streamline the hiring process.

How Does an ATS Work?

The ATS process typically consists of four key steps:

1. Resume Parsing

When you submit your application, the ATS extracts and organizes information from your resume into a structured format. It identifies your contact information, work history, education, skills, and other relevant details, storing this parsed data in a searchable database.

2. Keyword Matching

The system compares your resume against the job description, looking for relevant keywords and phrases such as job titles, technical skills, certifications, software proficiencies, and industry-specific terminology. According to a recent study, resumes that match at least 80% of the keywords in the job description have a 60% higher chance of passing ATS screening. This means you need to get strategic about your language.

3. Ranking and Scoring

Based on keyword matches and other criteria, the ATS assigns a score to your application. Recruiters often set minimum score thresholds; only resumes meeting these criteria get forwarded for human review. For instance, an ATS may rank candidates on a percentage scale or use tiered categories, steering the hiring manager towards higher-ranking candidates first.

4. Database Storage

Once submitted, your information remains in the employer's database, sometimes for years. Recruiters can search this database later for candidates who might fit future openings, which emphasizes the importance of optimizing your resume, even if you don't secure the initial position.

Why Companies Use ATS Technology

The numbers speak for themselves: a single job posting can attract 250 or more applications. Without automation, reviewing each resume would consume enormous time and resources. Here’s how ATS technology benefits employers:

Reduce time-to-hire by quickly identifying qualified candidates.
Ensure compliance with equal employment opportunity regulations.
Maintain organized records of all applicants.
Improve collaboration among hiring team members.
Track metrics like source of hire and cost per hire, yielding a more efficient hiring process.

Common ATS Misconceptions

Myth: ATS Automatically Rejects Resumes

Reality: ATS ranks and organizes resumes; humans make the final decisions. However, low-ranking resumes may never be reviewed.

Myth: You Need to Trick the ATS

Reality: Modern ATS platforms are sophisticated. Instead of trying to game the system, focus on creating a clear, keyword-optimized resume that reflects your true qualifications.

Myth: All ATS Work the Same Way

Reality: Different platforms have different capabilities and parsing methods. What works for one ATS might not work perfectly for another. Always research the specific ATS mentioned in a job listing, if available.

How to Optimize Your Resume for ATS

Now that you understand how ATS works, here’s how to enhance your chances of passing through the digital gates:

1. Use Standard Formatting

Stick to conventional resume layouts without tables, graphics, or unusual fonts. Use simple section headings like "Work Experience" and "Education" to help the parser understand your resume structure. For example:

Work Experience  
Marketing Manager  
Company ABC, New York, NY  
June 2020 – Present  
- Developed digital marketing strategies that led to a **30% increase** in lead generation.

2. Include Relevant Keywords

Study the job description carefully and incorporate matching terms naturally throughout your resume. Focus on both hard skills (specific technical abilities) and soft skills mentioned in the posting. For example, if the job calls for "project management skills" and "team leadership," ensure these phrases appear in context with real-world examples. This could look like:

- Led a team of 5 in executing a project that improved operational efficiency by **25%**.

3. Submit the Right File Format

Most ATS handle .docx files best; however, PDFs work well with modern systems. When in doubt, always follow the employer's submission guidelines. If a job posting specifies a format, adhere to it to avoid automatic disqualification.

4. Customize for Each Application

A generic resume rarely ranks well. Tailor your content to match each specific job description while being honest about your qualifications. For instance, if you’re applying for a marketing role, highlight your digital marketing experience and relevant projects that demonstrate your effectiveness in that area. Here’s a quick template for customization:

Objective:  
Dynamic marketing professional with over **5 years** of experience in digital campaigns, seeking to leverage expertise at [Target Company] to drive growth and engagement.

5. Use Action Verbs and Quantifiable Results

Incorporating action verbs like "developed," "implemented," and "managed" enhances readability and engagement. Additionally, include quantifiable results. For example, "Increased sales by 30% within six months by implementing a new marketing strategy" can significantly strengthen your resume. Use bullet points for clarity:

- Increased customer engagement by **40%** through targeted social media campaigns.

The Human Element Still Matters

While understanding ATS is crucial, remember that humans ultimately make hiring decisions. Your resume must pass the ATS screening but also impress the recruiter or hiring manager reading it. Strike a balance between optimization and compelling content that showcases your unique value.

Tools to Help You Beat the ATS

At Jobfolio, we provide tools specifically designed to help you navigate the ATS challenge. Our platform analyzes job descriptions, identifies critical keywords, and assists you in creating ATS-optimized resumes that still read naturally to human reviewers. We understand both sides of the hiring equation and are here to help you succeed.

Conclusion

Applicant Tracking Systems are an inevitable aspect of modern job searching. Instead of viewing them as obstacles, think of them as puzzles to solve. By understanding how ATS technology works and optimizing your resume accordingly, you can dramatically increase your chances of getting past the digital gatekeeper and into the interview chair.

Remember, the job market is competitive, but knowledge is power. Now that you understand what an ATS is and how it works, you're better equipped to craft applications that succeed in both automated and human evaluations. Ready to optimize your resume? Create Your Resume and get started today!

For a quick check, make sure your resume is ready to pass through any ATS with our ATS Checker.

What is an ATS and How Does It Work? The Complete 2026 Guide