April 20, 2024

Applicant Tracking System Market is Poised for Significant Growth Owing to Rising Integration of AI Technologies

Applicant tracking systems (ATS) are software applications that enable the electronic handling of recruitment needs such as sorting resumes and applications, tracking applicants, and managing an organization’s recruiting pipeline. ATS streamline the hiring process by eliminating traditional paperwork, enabling integration with other business systems like HR and payroll, and providing automated communications to candidates. The globalization of businesses and the need for efficient screening of a large number of candidates has increased demand for ATS solutions.

The Global applicant tracking system market is estimated to be valued at US$ 2.67 Bn in 2024 and is expected to exhibit a CAGR of 6.4% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the applicant tracking system market are IBM Corporation,,Oracle Corporation,,Jobvite Inc.,,Bullhorn Inc. (Vista Equity Partners),,iCIMS Inc. Major players are focusing on product innovations and integrating advanced technologies like artificial intelligence and machine learning into their solutions.
The growing digital transformation of HR functions and need for automated candidate screening presents significant growth opportunities for ATS vendors. Additionally, the demand from SMBs for affordable and easy to use ATS is encouraging new product launches targeted at this customer segment.
Technological advancements like integration of AI and predictive analytics are allowing ATS to personalize candidate experiences, identify top talent, and optimize recruiting workflows. Automated skills-based matching and resume screening is reducing time-to-hire.

Market Drivers
Rising adoption of AI-powered recruiting: Integration of AI technologies like machine learning and natural language processing enables skills-based matching of candidates profiles with job requirements and automates screening and shortlisting. This is reducing time-to-hire and workload on recruiters.
Growing need for efficient and scalable hiring: Businesses need efficient hiring solutions to screen a large number of applications, especially for high-volume hiring. ATS automates traditionally paper-based and complex hiring workflows, improving hiring productivity.
Demand from SMBs: Affordable and easy-to-use ATS catered towards SMB requirements are witnessing increased demand. Growing digitalization of HR in small companies is a key driver.

Current challenges in Applicant Tracking System Market
The applicant tracking system (ATS) market faces several challenges. Strict data privacy laws in different regions pose compliance issues for vendors. With the rise of remote working trends, tracking applicants and managing hiring processes remotely is a difficulty. Evaluating soft skills of candidates through digital means is still a challenge. Integrating legacy HR systems with new ATS solutions increases implementation complexities. Managing unstructured applicant data from different sources like resumes, profiles, assessment results within the ATS is another hurdle.

SWOT Analysis
Strength: ATS solutions help streamline hiring processes and reduce time-to-hire. They offer advanced applicant tracking and analytics capabilities.
Weakness: High implementation and maintenance costs of advanced ATS deter small businesses. Technical glitches or interface issues can lead to poor candidate experience.
Opportunity: Growth of remote hiring and evolving recruiting trends provide scope for enhancing ATS with new features. Integration of AI/ML further improves tracking, screening and matching of candidates.
Threats: Open-source and low-cost alternatives limit pricing power of vendors. Stringent data privacy laws increase compliance responsibilities.

Geographical regions of concentration
North America accounts for the largest share in the applicant tracking system market currently, primarily due to stringent recruitment regulations and widespread tech adoption among enterprises. The Asia Pacific region is expected to offer lucrative growth opportunities owing to expanding corporate sectors and growing need to streamline hiring in countries like India, China and Japan.

Fastest growing region
The Asia Pacific region is poised to witness the fastest growth in the applicant tracking system market during the forecast period from 2023 to 2030. This can be attributed to ongoing digital transformation of HR departments, rising wages, and increasing competition for talent in emerging economies of Asia Pacific. Furthermore, growing foreign investments and establishment of international firms will boost demand for advanced ATS solutions in the region.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it