What Is an ATS and How Does It Actually Work?
Nearly every major company uses an Applicant Tracking System. Here is what they do, how they filter resumes, and what you can do about it.
The Robots Reading Your Resume
If you have ever applied for a job online and heard nothing back, there is a good chance a robot saw your resume before any human did. That robot is called an Applicant Tracking System, or ATS.
According to a 2025 analysis by Jobscan, 97.8% of Fortune 500 companies use a detectable ATS. The study examined the career pages of all 500 companies on the Fortune 500 list and found that 489 of them use automated applicant tracking software. For large enterprises, ATS adoption is essentially universal.
What Does an ATS Actually Do?
An ATS is software that helps companies manage the hiring process. When you submit your resume through a company's career portal, the ATS:
- Stores your application in a searchable database
- Parses your resume to extract key information like job titles, skills, education, and dates
- Ranks or scores candidates based on how well their resume matches the job requirements
- Helps recruiters filter through large applicant pools efficiently
With an average of 180 applicants per job opening (HiringThing, 2024), recruiters physically cannot read every resume. The ATS helps them prioritize who gets a closer look.
Which ATS Systems Are Most Common?
According to Jobscan's 2025 Fortune 500 analysis and SHRM reporting, the most widely used ATS among Fortune 500 companies is Workday, powering over 39% of Fortune 500 hiring processes. SAP SuccessFactors comes second at approximately 13.2%.
Looking at the broader market across all company sizes, research from AppsRunTheWorld shows that iCIMS holds the largest overall market share at 10.7%, followed by Oracle, Workday, Greenhouse, and Lever. The top 10 ATS vendors together account for about 51% of the total market, with the global ATS market projected to reach $3.6 billion by 2029.
Do ATS Systems Auto-Reject Resumes?
This is where it gets nuanced. You may have heard that "75% of resumes are rejected by ATS before a human sees them." That widely repeated claim actually traces back to a 2012 marketing pitch from a now-defunct company, and has no peer-reviewed backing.
A 2025 study by Enhancv, which interviewed 25 U.S. recruiters, found that only 8% of ATS platforms are configured to auto-reject resumes based on content. The remaining 92% of recruiters said their ATS serves as a filtering and prioritization tool, not an automatic rejection engine.
However, a landmark 2021 study by Harvard Business School and Accenture titled "Hidden Workers: Untapped Talent" surveyed thousands of business leaders and found that 88% of employers acknowledged their ATS configuration causes qualified candidates to be filtered out. The distinction is important: most ATS software does not auto-reject, but the way companies configure keyword requirements, degree filters, and experience thresholds effectively screens out qualified people.
How to Optimize Your Resume for ATS
Based on how ATS systems actually parse and rank resumes, here are practical steps:
- Use a clean, single-column layout. Multi-column designs, tables, and text boxes can confuse ATS parsers, causing information to be extracted out of order or missed entirely.
- Include relevant keywords from the job description. ATS ranking algorithms look for matches between your resume and the job posting. Use the same terminology the job description uses.
- Use standard section headings. "Experience," "Education," and "Skills" are universally recognized. Creative headings like "My Journey" may not be parsed correctly.
- Submit in PDF or DOCX format. Most modern ATS systems handle both well. PDF preserves formatting; DOCX is sometimes more reliably parsed by older systems.
- Do not stuff keywords. ATS systems are getting smarter, and many newer platforms use semantic matching rather than simple keyword counting. A recruiter will still review your resume after the ATS flags it.
The Bottom Line
ATS systems are not going away. The global market is growing at 7.6% annually (AppsRunTheWorld), and with 70% of companies planning to use AI in hiring by 2025 (ResumeBuilder.com, surveying 948 business leaders in 2024), automated screening is only becoming more common.
The good news is that optimizing for ATS does not mean gaming the system. It means presenting your genuine qualifications in a format that both robots and humans can easily read. A well-structured, keyword-relevant resume benefits everyone in the process.