Applicant tracking systems have shaken up the economy as we know it. Hiring managers and HR professionals have saved valuable time finding applicants, but it may come at a cost.
According to industry projections, the applicant tracking system market is expected to grow by an impressive 8.5% in less than ten years. More businesses than ever are turning to these tools to help them find qualified candidates, save time viewing resumes, and complete the interview process.
However, even as technology has helped solve old problems, new problems have cropped up in their place. Are applicant tracking systems supporting or hindering hiring bias? More importantly, how do we strike a happy balance between a human touch and advanced technology?
How Applicant Tracking Systems Work: Pros and Cons
An applicant tracking system (or ATS) is an advanced software that automates, analyzes, and records the entire applicant journey from beginning to end. What was once a slow and tedious hiring process can now be completed far more quickly and efficiently. At least, on paper. On one hand, a 2024 study found 78% of Malaysian companies reporting higher-quality hires after using ATS. On the other hand, a report from Harvard Business School and Accenture saw 88% of qualified candidates outright rejected by ATS algorithms during the hiring process.
Let’s break down the core components of applicant tracking systems, and examine where they streamline hiring—and where they quietly introduce new problems.
Expanding Talent Pools
Some businesses work in smaller niches and have a harder time finding qualified applicants. Applicant tracking software can help them gather up resumes, applications, and cover letters in a fraction of the time.
The downside to using talent pools is potentially being restricted by what the application offers. Employers need to make sure they’re still tapping into other outlets – such as job boards or word of mouth – to keep their options open.
Recruiting Dashboards
The hiring process is a dynamic entity, filled with missed calls, changing interview schedules, and fluctuating budgets. When a potential employee needs to be put on hold or a new role needs to be drafted up, recruiting dashboards can keep everyone in touch.
These dashboards keep track of vital candidate details like contact information, resumes, and interview notes. Instead of losing qualified candidates to the flurry of weekly activity, these dashboards can automate follow-up emails or send out deadline reminders to hiring managers.
The hands-off approach of dashboards can potentially harm the candidate-employer relationship. Stalling for too long on the hiring decision can burn out prospective candidates, pushing them to search elsewhere and even harming the company’s reputation.
Faster Training and Onboarding
The onboarding process can sometimes stall the work that needs to be done. Some outdated onboarding models push new applicants through internal bureaucracy that can keep them from working for weeks.
An applicant tracking system can help with internal tasks like scheduling, training, and getting approval for specific documents. When hiring managers are already tight on time and deadlines are looming, a few extra hours can save a mountain of stress.
However, this speed is a double-edged sword. Rushing the training and onboarding process can potentially create confused workers who aren’t fully prepared for the role.
The Problems With Hiring Bias Today
It’s no small wonder that applicant tracking systems have become so mainstream. Alongside potentially saving valuable time, they can sometimes puncture systemic hiring bias.
Hiring bias refers to (usually) subconscious hiring decisions made by decision makers in the recruitment process. These snap-second judgements keep qualified applicants from getting the work they deserve and prevent businesses from onboarding skilled professionals.
A recent study found that 42% of women stating they received inappropriate comments about their gender in an interview. Another study saw white candidates being 50% more likely to receive a callback than a Black candidate.
Applicant tracking systems automate a significant portion of the hiring process, reducing the risk of these snap judgments getting in the way of equitable hiring. However, AI systems have their own bias problems that need addressing.
The Emerging Problems of AI Bias in Hiring
AI is not the objective creation it’s often made out to be. Since AI is made and monitored by people, it often absorbs the same biases and regurgitates them in apps, programs, and large language models.
With the pervasive myth that AI is fundamentally objective, hiring bias stands to become worse, not better.
A University of Washington study found that poorly vetted AI programs that haven’t been screened for bias can encourage bias in its hiring managers. This bias resulted in candidates with Black, Asian, and Hispanic last names being chosen less than white candidates despite equal qualifications.
AI screening tools are also faulty since they tend to look for specific keywords or phrases instead of the bigger picture. Applicants who haven’t tailored their resume to fit the particular focus of a specific AI screening tool risk being overlooked entirely.
Qualified candidates may spend hours working on an application or cover letter only to have their efforts sent to the recycling bin. Where do we go from here?
Blending Applicant Tracking Systems With Human Oversight
Applicant tracking systems, at their best, work to automate tedious tasks like follow-ups, drafting emails, or sending out reminders. Once it’s time to get to know people, humans need to sit in the driver’s seat.
The interview process has become convoluted and demoralizing for all parties the past few years. Many applicants have grown frustrated with being overlooked by automated systems or rejected by automated emails without having ever spoken to a real person. Likewise, hiring managers are often flooded with hundreds of applications they can’t fully read.
A delicate balance between automation and simple, face-to-face communication is possible. Employers don’t have to potentially lose valuable workers to a dispassionate program that turns complex people into word strings and keyword clusters.
Applicant tracking systems can’t fix a fundamentally broken hiring process. A straightforward interview process, consistent follow-ups, and clear expectations around the role will go a long way for everybody.