Applicant Tracking System Market Size & Overview:

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Applicant Tracking System Market Size was valued at USD 2.6 Billion in 2023 and is expected to reach USD 4.6 Billion by 2032, growing at a CAGR of 6.6% over the forecast period 2024-2032.

The ATS market is growing with the increasing demand for effective recruitment processes across industries. Employers are looking to streamline hiring procedures and manage the ever-growing number of applicants. According to recent government statistics that have been published in 2023, the global employment rates have seen an upward trend, with over 230 million job postings annually in developed economies alone. The U.S. Bureau of Labor Statistics also published data, which shows that the number of job openings in the U.S. was 9.6 million by the third quarter of the same year. Many other countries also feature similar increases in workplace activity. Moreover, many governments have developed digitalizing programs to help companies adopt digital tools to bring about more productivity. The best example is the European Union’s backing of the Digital Single Market Strategy. All the aforementioned factors lead to the situation where adopting ATS is being incentivized, therefore making this technology essential to the recruitment workflow. Moreover, remote work has grown twice since 2020 according to the government’s report. That is why the ATS that can host globally dispersed teams will be in even higher demand. This push for digital transformation and streamlined recruitment processes is propelling the ATS market forward, with further growth expected as more organizations seek out automated hiring solutions.

Applicant Tracking System Market Dynamics

Drivers

• ATS systems are leveraging AI to streamline recruitment processes, reducing time-to-hire and improving candidate selection accuracy.

• The shift to remote work has boosted demand for cloud-based ATS platforms that enable global talent acquisition and remote collaboration.

The use of artificial intelligence AI and automation in recruitment is transforming the market centralizing around an Applicant Tracking System (ATS). Nowadays, AI-based ATS solutions are widely used by organizations in order to increase efficiency, decrease bias, and improve the abilities and tools of candidates. According to a report by the Society for Human Resource Management (SHRM) in 2023, almost 70% of HR specialists are sure that AI tools have made a significant difference in the hiring process, thus, they are focusing on strategic decisions and problem-solving issues instead of routine. For example, resume screening tools are able to screen thousands of applications in minutes showing those candidates who meet the criteria set for these positions. This process requires no time, while manual resume evaluation and filters would take hours. Chatbots located in the ATS platforms are used to contact and communicate with candidates able to answer their questions and schedule an interview. An additional example of Unilever and its AI recruitment strategy that is used in an ATS system with predictive analytics, has led to an increased pool of candidates for 16% and a decreased time to fill positions. In general, as companies are trying to optimize the hiring process, artificial intelligence AI and automation in ATS systems will be a strong growth factor.

Restraints

• Advanced ATS platforms can be costly, posing adoption challenges for small and medium-sized enterprises.

• Growing use of cloud-based ATS solutions raises concerns about data privacy and security, especially in regulated industries.

One of the major restraints for the Applicant Tracking System market is the issue of data privacy and security concerning these services. More and more enterprises decide to employ cloud-based ATS in their hiring operations, which necessitates ensuring the protection of sensitive information regarding the candidates such as personal identification details, employment history, and qualifications. Meanwhile, as the number of data breaches increases, the companies must demand their ATS providers to comply with the broad data protection legislation such as GDPR and CCPA. The concern about potential data loss or unauthorized access can lead to a certain reluctance to use the services by healthcare and financial organizations whose compliance with the data protection laws is particularly vital; more so, ensuring cybersecurity can demand significant investments from the business. In such a situation, the availability of cybersecurity measures may serve as a restraining factor, which can slow down the broad application of the ATS systems as businesses decide whether the improvements to the recruitment process are worth the risk of exposing sensitive data.

Applicant Tracking System Market Segment analysis

By End-use

In 2023, the IT & telecommunications sector dominated the Applicant Tracking System market, accounted a 23% revenue share by end-use. This is due to the continually increasing demand for tech talent and generally high competition and rapid pace of this sector. The IT and telecommunications fields require specialized skills which in combination with a competitive landscape of digital transformation across other industries results in high recruitment activity driven by the need for workers in these spheres. According to government data, technology employment is growing faster than ever, and about 4% of all job postings are for tech openings. Similarly, Canada shares this trend with approximately 50,000 global hires in IT and telecommunications in 2022, growing at 3% annually.

In addition, the healthcare and life sciences segment is also expected to show one of the highest Compound Annual Growth Rates over the forecast period. This is likely due to the growth of the healthcare industry itself associated with an aging population and generally increased demand for healthcare around the world, as reported by the World Health Organization. The healthcare field is predicted to see job openings grow at a pace of 10% annually, and ATS systems are needed to enable effective recruitment due to the high demand for employees in the industry

By Deployment

In 2023, in terms of deployment, the on-premises segment led the Applicant Tracking System market and accounted for 58% of the revenue share. The use of such systems is more typical for large organizations, and companies working in highly regulated sectors, such as banking, government, and healthcare, prefer on-premises solutions as they are more controlled and secure. According to government data, some advanced ATS systems are now used in financial services and government institutions to meet the strict hiring guidelines of some sectors.

The cloud segment is projected to grow with a significant growth rate during the forecast period. It presents numerous important benefits, such as scalability, flexibility, and cost-effectiveness, especially for small and medium-sized enterprises. The growth in cloud services is evident based on the NIST statistics for the U.S., revealing that the use of cloud computing services grows at an annual rate of 18%. Furthermore, it is another trend in the contemporary world as many governments tend to promote digital services in terms of cloud computing. That is why it is possible to state that the market trend is a move towards adopting cloud-based systems.

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Regional analysis

North America dominated the ATS market in 2023. The region held a 39% share of the market, which can be attributed to the fast adoption of advanced recruitment technologies as well as the presence of key market players. The U.S. Department of Labor published a report for 2023, which showed that job openings reached record levels. More precisely, there were 9.6 million openings, which increased the potential for the adoption of talent acquisition solutions. In addition, the U.S. government promotes the use of digital tools and HR technology by offering diverse incentives to companies in both public and private sectors. Further, the UK and Canada are world leaders in technology, which has facilitated the steady expansion of the ATS market. The market’s leading position is also explained by the presence of many advanced technology companies in the region and a well-developed IT infrastructure. In terms of growth, Europe and Asia-Pacific are following because of increased demand for automation in recruitment and the promotion of digitalization of various sectors at the local level.

In addition, the rate of growth in Asia is expected to be the fastest throughout the forecast period. Thus, the demand for ATS software is increasing, as recruiters in this region are faced with a problem due to the density of the population, which, on average, causes multiple applications to be received per job post. Informing on this, on the one hand, requires a focus on the Asian market, and, on the other hand, is derived from the increase in the use of cloud-based applications in China and India. At the same time, new applications for the system are encouraged by the need to grow at the rapid pace of new ventures in the region, such as in Singapore, India, Sri Lanka, Malaysia, or Hong Kong.

Key Players

• Workday (Workday Recruiting, Workday HCM)

• SAP SuccessFactors (SAP SuccessFactors Recruiting, SAP SuccessFactors Onboarding)

• Oracle (Oracle Taleo Cloud, Oracle HCM Cloud)

• iCIMS (iCIMS Recruit, iCIMS Onboard)

• Greenhouse (Greenhouse Recruiting, Greenhouse Onboarding)

• SmartRecruiters (SmartRecruiters ATS, SmartRecruiters Onboarding)

• Bullhorn (Bullhorn ATS, Bullhorn CRM)

• Zoho (Zoho Recruit, Zoho People)

• Jobvite (Jobvite ATS, Jobvite Engage)

• BambooHR (BambooHR ATS, BambooHR Employee Self-Onboarding)

• Lever (Lever Hire, Lever Nurture)

• ApplicantPro (ApplicantPro ATS, ApplicantPro Onboarding)

• CATS (CATS ATS, CATS CRM)

• Recruitee (Recruitee ATS, Recruitee Job Board)

• Workable (Workable ATS, Workable Video Interviews)

• ADP Recruiting Management (ADP Recruiting Management, ADP Onboarding)

• HireVue (HireVue ATS, HireVue Assessments)

• ClearCompany (ClearCompany ATS, ClearCompany Onboarding)

• Trello (Trello Hiring Board, Trello for Recruitment)

• PeopleFluent (PeopleFluent ATS, PeopleFluent Talent Management) and others.

Recent Developments in the Applicant Tracking System Market

• In July 2024, the pioneer in staffing and recruitment software Bullhorn and the leader in healthcare staffing solutions, Ingenovis Health, teamed up to unify seven brand platforms into a single digital talent hub. The purpose of the merger was to improve the user and candidate experience, as well as tackle the talent shortfalls. This moved Bullhorn to the top in the health care applicant tracking system market.

• March 2024, The U.S. Department of Labor launched a new initiative aimed at fostering digital transformation in recruitment, which includes grants for organizations adopting advanced ATS platforms. The initiative is expected to accelerate ATS adoption, particularly among small and medium-sized enterprises looking to streamline their hiring processes.

• In June 2023, IBM Corporation acquired Apptio Inc., a company specializing in providing economic and operational insights for enterprise IT. This acquisition is set to enhance IBM's IT automation capabilities and improve business value from technology investments.

• In August 2023, RChilli introduced the RChilli Candidate Recharge (RCR) feature, revolutionizing applicant data reprocessing in Applicant Tracking Systems (ATS) to provide a more efficient experience for users and providers.