Applicant Tracking System Market Size, Share & Trends Analysis Report By Component (Software, Services), By Deployment (On-Premise, Cloud), By Organization Size (Large Enterprises, SMEs), By Industry Vertical (BFSI, Retail, IT & Telecommunication, Healthcare & Life Sciences, Consumer Goods, Manufacturing) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global applicant tracking system market size was valued at USD 1.70 billion in 2023. It is projected to reach USD 3.71 billion by 2032, growing at a CAGR of 9.05% during the forecast period (2024–2032).

An applicant tracking system organizes and automates the hiring process. Applicant tracking systems use machine learning and artificial intelligence to sort and filter applications, send follow-up emails and study candidates. Manual analysis of candidate submissions is becoming obsolete due to time, expense, and bias issues. An ATS provides actionable data and reduces recruiting time and expenses. To manage a company's hiring and recruitment process, an applicant tracking system gathers and stores candidates’ resumes in its database. After indexing and scanning, the system saves resumes in a database, providing recruiters with an online look at job seekers. Companies use applicant tracking systems (ATS) to hire workers more quickly, post job openings on websites or job boards, review resumes, and email invitations to interviews with qualified candidates.

Market Dynamics

Global applicant tracking system market drivers

Increasing automation drives the ats market

Individual applicant tracking, automated resume ranking, customized input forms, and interview scheduling are just a few of the automated features that will likely entice businesses to purchase the product. The system's automated capabilities boost efficiency and productivity, propelling the application tracking system (ATS) market forward during the forecast period. The move from traditional to online or e-recruitment influences the applicant tracking system industry. Facebook has 3.07 billion active members, and LinkedIn has 1 billion. According to Glassdoor, 86% of recent job seekers used social media. Recruiting automation has progressed beyond newspaper ads to social media recruiting. Recruiters use software-enabled hiring automation due to the success of the sales and marketing industry. New technologies are emerging to address traditional recruitment challenges, from candidate sourcing to final hiring decisions. In fact, according to a LinkedIn survey on talent trends of 2024, 57% of talent professionals and hiring managers say that Generative Al is faster and easier to write job descriptions.

A streamlined process that results in a better candidate experience

Many candidates have less-than-ideal experiences during their job searches. With an applicant tracking system, businesses can provide a better candidate experience and prevent candidate resentment. It provides an easier way to apply for jobs, a way for applicants to check the status of their applications, and improved communication throughout the hiring process. Using applicant tracking software is a simple way to guarantee prompt communication. For hiring managers and recruiters, dashboards and notifications help keep communication in their minds. When HR teams clarified the post-interview steps and followed up with candidates in line with the promised timeline, the Report found that positive candidate experiences increased by 52%. As a result, ATS software ensures that recruiters and candidates have a good working relationship. Moreover,94% of recruiters agree that their Applicant Tracking System (ATS) has had a positive impact on their organization's hiring processes.

Global applicant tracking system market restraint

Lack of pertinent knowledge and expertise

A changing set of skills are needed to ensure relevance with the job postings due to technological advancements affecting HR. Due to a lack of appropriate IT skills and software knowledge, HR managers have trouble fully implementing modern ATS solutions. For the HR staff to use the ATS effectively, they must receive the appropriate training. Therefore, it is anticipated that a challenge for successfully implementing ATS software across enterprises will be the lack of skill and limited technical expertise. To switch from a network perimeter-based strategy to a user and application-based security model, the model compels organizations' IT departments to review their network security strategies. Redesigning and creating web and mobile applications may take time and effort. As most networks were not developed with cybersecurity in mind, a thorough network analysis of services, network equipment, and traffic is required to transition to the new IT security model.

Global applicant tracking system market opportunities

An increase in business demand for cloud-based hiring solutions

The widespread adoption of the cloud computing model results from its robust and adaptable infrastructure. With remote server access via the internet and limitless computing power, cloud solutions are becoming increasingly popular among businesses to streamline data storage. Organizations can manage all applications thanks to the cloud-based model's implementation because it offers complicated analytics that runs in the background. As SMEs prepare to address the issues of talent search and rising job applications, the market for cloud-based ATS solutions is predicted to grow, presenting growth opportunities.

Regional Analysis

The global applicant tracking system market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA. 

North america dominates the global market

North America is the most significant shareholder in the global applicant tracking system market and is expected to grow at a CAGR of 8.7% during the forecast period. The U.S. and Canada are included in the analysis of the applicant tracking system market in North America. North America currently holds a 40% share of the ATS market and is expected to maintain this position over the forecast period. The  North American applicant tracking system industry has a large presence of many corporate headquarters. Additionally, north America is shifting toward newer and improved technology due to the growing use of digital methods. In order to improve operations and obtain a competitive edge, it also makes larger investments in cutting-edge technologies such as AI and ML.

Asia Pacific is expected to grow fastest at a CAGR of 9.3% during the forecast period. Recruiting highly trained and qualified candidates in Asia-Pacific requires applicant monitoring software. Recruiters in the APAC region face a major challenge as a consequence of the enormous volume of applications received for each job posting due to the region's high population. In order to overcome this hurdle, companies in the Asia Pacific region use friendly software in their hiring process. Furthermore, This region is rapidly industrializing, urbanizing, transforming agriculture, and diversifying its economy, increasing work prospects. With the migration of employees from farmland to cities, applicant tracking systems have become popular. China's demand for skilled labor is rising due to an aging population and strong growth in the service sector.

Segmental Analysis

The market is segmented by component, deployment, organization size, and industry vertical. 

Based on components, the global applicant tracking system market is bifurcated into software and service.

The software segment is the highest contributor to the market and is forecasted to grow at a CAGR of 9.2% during the forecast period. The increase is attributable to the software's flexibility in being modified and tailored to end-user needs. The program gathers and keeps track of resumes in its database so recruiters can easily access them. Even though they were developed for businesses, applicant tracking systems let organizations change the software to meet their needs. ATS software allows organizations to customize the software to meet the needs of their end-users while also being tailor-made. ATS features are frequently combined with workforce management in vendor-provided Human Capital Management (HCM) suites to manage the entire hiring process, from applicant tracking to employee life cycle management.

Based on deployment, the global applicant tracking system market is bifurcated into on-premise and cloud.

The cloud segment is the highest contributor to the market and is anticipated to grow at a CAGR of 9.1% during the forecast period. Cloud deployment offers greater flexibility, reduced costs, and better security. With a network-based or cloud-based application tracking system, anyone with an internet connection can access the system, eliminating the need to install software to access data and allowing recruiters to continue hiring without interruption. Cloud services are free to use and can be paid for as needed by the user. Organizations can gain from the cloud deployment model's quick deployment, scalability, and accessibility from any location. Adopting cloud services raises serious concerns about data security. As a result, businesses are turning to private and hybrid cloud solutions.

Based on organization size, the global applicant tracking system market is bifurcated into SMEs and large enterprises.

The large enterprise segment is the highest contributor to the market and is expected to grow at a CAGR of 8.9% during the forecast period. To enable secure data and support system migration, large enterprises choose to purchase from, work with, and partner with ATS providers. Large organizations are implementing ATS and growing their businesses through candidates and job openings, identifying particular competencies and skills aligned with their objectives and values. These businesses need a support system to assist them with the hiring process, and an applicant tracking system (ATS) can make it simple to collect, store, and manage applications.
Based on industry verticals, the global applicant tracking system market is bifurcated into BFSI, IT & telecommunication, manufacturing, and retail.

The IT & telecommunication segment is the highest contributor to the market and is expected to grow at a CAGR of 9% during the forecast period. Due to the growing demand for talent worldwide and the increasing number of candidates daily, the IT and telecommunications industry is expected to adopt applicant tracking systems. Further, the employment market in the IT and telecommunications sector is dynamic due to the fast-changing nature of technology and the constant need to hire qualified and skilled personnel. IT and telecommunications companies frequently use applicant tracking systems to deal with these issues.

Impact of covid-19

The economic crisis brought on by the COVID-19 pandemic piqued companies' interest in applicant tracking system software even more. Despite the lockdown, the global recruitment software market grew by 4.54% year over year (YOY) in 2020. Filling hot positions to keep companies afloat was difficult due to social distancing and stay-at-home policies.

The go-to method for keeping the hiring process moving and protecting both recruiters and candidates was remote recruiting. A shift to virtual recruiting, on the other hand, necessitates robust applicant tracking techniques and feature-rich solutions. As a result, most businesses have adopted hiring automation and virtual interviewing tools such as Microsoft Teams, Skype, and Zoom, resulting in the growth of the applicant tracking system market.

Recent Developments

• August 2023: RCR (RChilli Candidate Recharge), the newest innovation from RChilli, aims to transform the reprocessing of candidate data into an ATS (Applicant Tracking System). This innovative idea ensures a smooth and effective experience for ATS providers and their end users.
• March 2023: Paradox offers the first Conversational ATS in the market, transforming high-volume hiring with chat and text-driven automation.
• October 2022, Paycor HCM, Inc., a well-known supplier of human capital management (HCM) software, recently announced the acquisition of Talenya, a state-of-the-art AI-driven recruiting platform that swiftly and cheaply finds top talent on its own.
• October 2022, The release of Cornerstone OnDemand, Inc.'s new Talent Experience Platform (TXP), a pioneer in talent experience solutions, is intended to assist talent leaders in maximizing the potential of their workforce while streamlining the process.