A Comprehensive Guide to Applicant Tracking Systems (ATS) for U.S. Job Seekers

Picture this: You've spent hours crafting the perfect resume, tailoring it to a dream job, and hitting submit with confidence. Weeks pass with no response.

What happened?

Maybe you just didn’t stand out to a recruiter. Or it was a close call by the hiring manager between your application and another. But chances are your resume never made it past the digital gatekeeper known as an Applicant Tracking System (ATS).

With 70% of large companies companies — and 98% of Fortune 500 companies — using this software as the first line of their recruiting process, a significant number of resumes are filtered out before human eyes ever see them.

With the job market contracting across a number of industries, understanding these systems is no longer optional. Here’s everything you need to know about applicant tracking systems and how to increase your chances of making it through that first layer of screening.

What Is an Applicant Tracking System (ATS)?

An Applicant Tracking System is software that companies use during the hiring process to quickly screen out applications (and therefore candidates) who don’t meet the right criteria. Think of it as an automated hiring assistant that stores, organizes, and filters candidate information before it reaches human recruiters.

When you submit your resume through an online application, the ATS doesn't just file it away. It scans your document, breaks it into structured data through a process called resume parsing, and creates a searchable profile in the company's database. This means your contact information, work history, skills, and education are extracted and categorized. That is, assuming the system can read your formatting correctly (more on that later).

This is why it’s so important that you learn how to write a resume according to current best practices.

How Companies Leverage ATS

Recruiters use ATS platforms to search and filter applicants based on a number of different criteria, including things like:

• Keywords relevant to the role
• Level of work experience
• Educational background

Consider this reality: a typical corporate job posting receives about 250 applications on average, with popular companies seeing thousands of applications for a single role. Without automated screening, it would be impossible for hiring teams to review every submission.

The ATS helps by allowing recruiters to query their database with specific terms. For example, a hiring manager looking for a project manager might search for "PMP certification" or filter for candidates with "project manager" in their job titles. Only resumes containing those exact terms will appear in the results.

That’s why deciding which skills and even job-relevant hobbies to put on a resume can make a big difference.

How ATS Work: The Screening Process

Understanding the technical process behind ATS screening can dramatically improve your application success rate. Here's what happens when you submit your resume:

Resume Parsing and Keyword Indexing

The ATS first reads your resume's text and attempts to parse it into categories like name, contact information, education, and experience. It looks for standard section headings to understand where to file each piece of information. A clearly formatted resume helps ensure accurate interpretation—unusual formatting can result in garbled or lost information.

Next, the system indexes your resume content, making it searchable by keywords. Research from Jobscan shows that 99.7% of recruiters use keyword filters in their ATS to find candidates, making keyword optimization crucial for visibility.

Automatic Scoring and Ranking

Many ATS platforms score or rank candidates automatically based on how well their resume matches job requirements. Popular systems like Oracle Taleo rate alignment between resumes and job postings on a 0-3 scale across criteria like education, experience, and skills. These are then added into a total score. Higher scores indicate better matches, and recruiters often see applicants ordered by match percentage. Businesses using Taleo can require that candidates have a certain score for a certain criteria to pass through.

This means a well-qualified candidate can be overlooked simply because their resume didn't use the same terminology as the job posting. The key is using language that mirrors the job description while accurately representing your experience.

Filtering and Knockout Rules

Before any ranking occurs, ATS software often applies initial filters. These include eligibility questions ("Do you have a valid driver's license?") or rule-based filters (“Must have 5 years of experience”) set by recruiters.

If you lack a specific requirement or answer "no" to a knockout question, the system might automatically categorize you as disqualified—regardless of your other qualifications.

ATS Usage Across U.S. Employers

As we highlighted at the beginning, the prevalence of ATS use by American companies during the hiring process is staggering:

• 98.4% of Fortune 500 companies use an ATS to manage applications
• 70% of large companies with thousands of employees have ATS systems
• 20% of small and mid-sized businesses now use ATS for hiring
• 75% of recruiters rely on ATS or similar recruiting software

This widespread adoption means that whether you're applying to a startup or a major corporation, your resume is likely being processed by automated systems. Even smaller companies are increasingly adopting affordable ATS solutions like BambooHR or Workable.

And here’s the most important part: 94% of recruiters think that ATS is a helpful tool during the hiring process. So they aren’t going anywhere anytime soon.

Crafting an ATS-Optimized Resume

So, know that you have a bit of a better idea about how these systems work, let’s get into the strategies you can use to make ATS technology work in your favor, not against it. Here are the essential strategies:

1. Master Keyword Optimization

Since 76% of recruiters filter by specific skills first, incorporating relevant keywords from job descriptions is critical. Carefully analyze each job posting and identify required skills, technologies, and credentials. Include these exact terms naturally throughout your resume.

For example, if a job posting mentions "project management," "budgeting," and "Agile methodology," ensure these phrases appear in your experience descriptions. Use both spelled-out and abbreviated forms of key terms—write "Master of Business Administration (MBA)" to capture searches for both "MBA" and the full phrase.

Important: Only include keywords that truthfully reflect your experience. The goal is alignment, not deception.

2. Choose Simple, Clean Formatting

ATS systems struggle with complex layouts. Stick to these formatting guidelines:

• Use standard section headings like "Work Experience," "Education," "Skills," and "Certifications"
• Choose ATS-friendly fonts such as Arial, Calibri, or Times New Roman
• Maintain 10-12 point font size for optimal readability
• Use standard bullet points (•, ◦, or –) instead of fancy symbols
• Avoid decorative elements that might confuse parsing algorithms

Remember: when it comes to ATS compatibility, boring is better. Save creative designs for your portfolio, interview materials, or cover letter.

3. Optimize Job Titles and Contact Information

Make your job titles clear and standard.

Use "Software Engineer" instead of creative titles like "Code Ninja" to ensure keyword matching works in your favor. Including the target job title in your resume can be powerful too. Resumes with exact job title matches receive 10.6 times more interview requests on average.

Ensure all critical information appears in the main text of your resume, not in headers or footers. Some ATS don't read header sections, so your contact details could disappear entirely.

4. File Format: Can ATS Read PDF?

This is one of the most common questions job seekers ask, and the answer is: it depends, but usually yes.

Microsoft Word (.doc or .docx) are the safest choice—nearly all ATS can parse Word documents reliably. However, most modern ATS can also read PDF files effectively, and PDFs preserve your formatting better than Word documents.

When choosing between formats:

• Use Word when the job posting specifically requests it or doesn't specify a preference
• Use PDF when you want to preserve exact formatting and the posting accepts it
• Never upload image files (.png, .jpg) or scanned documents—these are invisible to ATS

Pro tip: If you have both options available, consider submitting the Word version through the automated system while keeping a PDF version for direct recruiter communication.

What to Avoid in ATS-Friendly Resumes

Certain elements can cause your resume to fail ATS screening entirely. One of the most common resume mistakes is a poorly formatted document. Understanding these pitfalls can save you from being automatically filtered out before human eyes ever see your qualifications.

Graphics, Images, and Visual Elements

Never include any pictures or elaborate graphics on a resume processed by ATS. This includes:

• Headshot photos (also discouraged in U.S. resumes for bias prevention)
• Company logos or brand graphics
• Fancy infographics or charts showing your skills
• Icons to denote phone, email, or social media contacts

ATS can only "read" text—any information conveyed through graphics gets lost during parsing. Worse, images can sometimes cause parsing errors that scramble the rest of your resume's text. Stick to text-only content for maximum compatibility.

Tables, Columns, and Complex Layouts

Avoid multi-column layouts and tables at all costs. Here's why they can be problematic:

Many ATS read resumes top to bottom, left to right, which means a two-column format gets read across columns, jumbling separate sections together. For example, if your experience is in the left column and skills are in the right, the ATS might combine a job responsibility with an unrelated skill, creating meaningless text.

Instead of tables for alignment:

• Use tab stops or simple spacing to line up dates and locations
• Stick to a single-column layout with all information flowing down the page
• Avoid text boxes or shapes—they're often skipped entirely during parsing

Remember: any content that isn't in the main body text risks being lost or misinterpreted.

Font and Design Choices

Stick to standard, professional fonts to ensure readability:

• Safe choices: Arial, Calibri, Times New Roman, or similar common fonts
• Avoid: Cursive, script, or decorative fonts that ATS may not recognize
• Font size: Keep body text between 10-12 points—smaller text may be unreadable

Design elements to avoid:

• Symbols or emoji as decorative elements
• Excessive colors or highlights (ATS often convert everything to plain text)
• Quirky visual styling that prioritizes appearance over function

While bold text and caps for headings are fine, remember that some ATS strip all formatting, so your colored text might appear as random black emphasis.

Headers, Footers, and Sidebars

Keep crucial information in the main document body. Many job seekers make the critical mistake of placing their name and contact information in Word headers to save space—but most ATS won't extract text from headers or footers. This means your contact details might not attach to your application at all.

Similarly problematic:

• Sidebar text boxes with summaries or skills lists
• Footer information like references or additional contact methods
• Any content placed outside the normal document flow

The safest approach is having all text in the main body, organized in a single column.

Keyword Manipulation and Hidden Text

Avoid trying to outsmart the system with misguided tactics (there are plenty of threads other there explaining why), especially these:

• Hidden white text: Never paste job descriptions in white font—recruiters and ATS vendors know this trick, and it will backfire spectacularly
• Keyword stuffing: Don't repeat the same terms excessively or include irrelevant buzzwords
• Block text copying: Pasting entire job postings into your resume creates obvious, unprofessional blocks

Modern ATS software is sophisticated enough to detect and penalize resumes that appear to be gaming the system. Focus on quality over quantity—mention keywords in context that demonstrates your actual knowledge and experience.

File Format and Technical Issues

Choose your file format carefully:

• Avoid: Scanned PDFs (images of text), .odt files, Apple Pages documents, or password-protected files
• Problem files: Any document that's essentially an image won't be readable by ATS
• Best practice: Always submit original, text-based files in accepted formats

If you have a scanned resume, re-type it into an editable format. Don't assume employers will run optical character recognition—they won't.

Content and Structure Mistakes

Additional elements that can derail your application:

• Excessive abbreviations without spelling out terms (use both "MBA" and "Master of Business Administration")
• Inconsistent terminology for the same skills across your resume
• Charts or graphs that can't be converted to searchable text
• Creative section headings that ATS don't recognize (stick to standards like "Work Experience" and "Education")

The key principle: if an element prioritizes visual appeal over clear, searchable text content, it's likely to cause problems with ATS. When in doubt, choose simplicity and clarity over creativity.

Best Practices for ATS Success

Tailor Each Application

Just like how to write a CV or a resume, tailoring your document is key. Generic resumes rarely succeed in ATS screening. Customize your resume for each application by:

• Analyzing job descriptions for specific keywords and requirements
• Adjusting your professional summary to match the role
• Emphasizing relevant experience while de-emphasizing less relevant positions
• Using industry-specific terminology that appears in the job posting

Proofread Meticulously

A single typo can derail your application. If you misspell "Project Management" as "Project Mangement," you won't appear when recruiters search for the correct term. Double-check all keywords, especially technical terms and certifications.

Include Strategic Details

Place the most important information prominently in your resume:

• Contact information in the main body (not headers)
• Relevant certifications spelled out fully with common abbreviations
• Job titles that match industry standards
• Skills sections with both technical and soft skills
• Quantified achievements that demonstrate impact

Understanding Advanced ATS Strategies

While all ATS perform core functions, some have unique features:

• Workday and Oracle Taleo are common in large enterprises
• Greenhouse and Lever are popular with tech companies and startups
• BambooHR and SmartRecruiters serve mid-sized businesses

Each platform may have slightly different parsing capabilities, but following universal best practices will serve you well across all systems.

Leverage Resume Database Features

Remember that ATS maintain databases of all submitted resumes. Even if you're not selected for one position, your resume remains searchable for future openings. This is why:

• Maintaining an updated, keyword-rich resume pays long-term dividends
• You might receive calls months after applying for different positions
• Consistent application to companies you're interested in increases visibility

The Reality of ATS in Modern Hiring

While ATS can seem like obstacles, they're actually tools designed to help both employers and job seekers. For employers and recruiters, they manage overwhelming application volumes efficiently. For job seekers, understanding ATS means you can craft applications that showcase your qualifications effectively.

The key is viewing ATS optimization not as gaming the system, but as clear communication. When your resume speaks the same language as the job description—using relevant keywords and proper formatting—you're simply making it easier for the right opportunities to find you.

Moving Forward with Confidence

Success in today's job market requires adapting to technological realities while maintaining authenticity. An ATS-optimized resume doesn't compromise your professional story, it just makes it easier for your story to get heard.

As you craft your next application, remember that every resume should serve two audiences: the ATS that screens it and the human who ultimately makes hiring decisions. By following these guidelines, you'll create documents that satisfy both, significantly improving your chances of landing interviews and advancing your career.

For more insights into the mind of someone making hiring decisions at the highest level, check out the My Career Shop podcast episode with executive recruiter Jennifer Speciale.