Conversational AI
10 min read
June 30, 2023

What an ATS is, what it isn’t, and what it should be in today’s hiring landscape.

Is the applicant tracking system still viable today? Yes. And no. And yes.

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Let’s be honest with each other — you typed “what is an applicant tracking system?” but what you really meant to ask was “why me?”

If the ATS had an approval rating, it would probably be a number that isn't divisible by itself. They are, traditionally, clunky even at the most charitable. And they’re [insert NSFW word here] at their worst. But perhaps the most frustrating thing about them is how little they’ve progressed — and how much they’ve squandered their potential — since first being popularized in the 1990s.

And yet … nearly every single company uses one. In fact, most have used the same one they don’t like for years. 


Well, that's a complicated ball of yarn to unravel (one with multiple frayed ends). And we’ll get there. But first let’s take a step back and explain the “what” before we get to the “why” — and ultimately — how a next-generation ATS can actually transform your hiring processes for the better. (No, seriously.) 

P.S. Sections are clearly labeled, so feel free to cheat and skip to the parts most relevant to you and your organization. We won’t tell. 

So, what is an applicant tracking system (ATS)?

And more specifically, why does it exist?

The simple, but mostly theoretical answer: the applicant tracking system is a hiring machine — software designed to help organizations centralize candidate screening, scheduling, applications, offers and onboarding. 

As originally concepted, the ATS was built to be a digital, centralized system to track job applicants (whoever came up with the name absolutely nailed it) throughout the hiring process and empower hiring teams to hire better, faster.

Essentially, the ATS is to physical spreadsheets and paper resumes what the car was to the horse and carriage. Cars serve the same general function as their equestrian counterparts … they just get you from A to B a lot easier. So with the advent of the ATS, what used to be manual in the hiring process became more streamlined and, eventually, more automated. 

Generally speaking, the ATS was created to:

  • Elevate candidate management from application to offer.
  • Remove certain repetitive recruiting tasks, like communicating status updates with candidates. 
  • Improve data and reporting.
  • Serve as a secure system of record and compliance for candidate information.

All of these things significantly improve hiring processes for organizations and elevate the experience of both the candidate and recruiter or hiring manager. Is it a perfect system? If you’re reading this, you likely already know the answer. There’s still plenty of downside here — many applicant tracking systems tend to be a place where lots of information exists, in a static state, without much external propulsion. 

And that passivity belies its promise of being a truly productive, efficiency creating, ROI-driving hiring machine. 

A (very) brief history of the ATS.

“Brief” because, honestly, there’s not a ton that’s happened since the primordial versions of the ATS were invented in the 1970s up until they went mainstream in the late 90s. Heck, you could argue that the first four decades of the ATS were stuck in a state of perpetual maintenance mode, constantly cleaning up its own messes. 

But let’s start with the positive. The reason why the applicant tracking system was created in the first place is undeniably airtight: Take all the laborious pen and paper aspects of recruiting and hiring and make them digital to simplify processes and save time. Sounds pretty great, right?

And while those early applicant tracking systems achieved that goal, it was really the bare minimum. Technology was, naturally, quite primitive at the dawn of the ATS and offered only basic data entry capabilities. This improved processes for users only very marginally and required tons of manual elbow grease to keep things humming. It wasn’t until the late 90’s (you know, when a little thing called the internet was invented) that what we know as “the modern” ATS started to take shape and became more widespread. 

Of course, it was around this time that the other reason for the applicant tracking systems’  existence came to light. Some would argue it’s the real reason: compliance. 

In a not-at-all interesting but extremely vital historical turning point, 2006 brought something called the Internet Applicant Rule into place, which required all large employers to keep track of a laundry list of candidate information. This included:

If that felt clunky to read, then you should have a little better understanding of why applicant tracking systems themselves became so clunky. It’s technology born from — and restricted by — compliance. Not user experience. And as we trudged forward into the 2010s, the ATS became more and more structured and standardized in order to meet these requirements. So while these applicant tracking systems provided some level of value, they were failing to actually save organizations time and money. The dream of an ATS as a true hiring machine became the stuff of pipes.

This is, effectively, why every major organization uses an ATS, but almost none of them actually like to. 

But in the last 5 years, something brilliant happened. People in the talent acquisition and HR space (particularly those in high-volume, hourly hiring who were oft-forgotten about when it came to ATS technology) began looking around at bleeding edge consumer technologies and the rise of automation and artificial intelligence and began to wonder, “why not us?” 

It was time for an ATS reinvention. One that would help serve all organizations and candidates, across all industries and demographics. 

So here’s the good news: In the past few years, considerable advancements with AI has finally helped the ATS make good on its initial promise. Basically, ATS advancement caught up to modern problems super slowly for decades (from the 70s through the early 2010s), and then very quickly all at once

What does that look like exactly? How about an ATS that goes from a hiring blackbox to what is effectively a purely conversational interface — AI powered by natural language processing that automates things like screening and interview scheduling automatically right on the candidate’s phone, then populates the gathered information into a sortable dashboard seamlessly. Friction points like passwords, logins, and clunky UI are replaced by organic, mobile-native conversations to create better experiences, while the automation saves hours of time for hiring teams.

In layman's terms: An ATS that actively does the work for you. A true hiring machine.

Still, most ATS’s aren’t really doing this. The concept of a “conversational” ATS is new (well, sort of, we’ll get into more detail about this later on) and many organizations still use what we would classify as a “traditional” ATS. In a sense, we’re dealing with almost two entirely different ATS eras that have converged at the same time: PAI and AAI. That’s right, Pre-AI and After AI. 

If you’re a history buff, you know that the Mesozoic era ended with the extinction of dinosaurs. And you know what they say about history repeating itself…

Why the traditional ATS has failed.

They don’t really do what they’re supposed to. 

A “traditional” ATS lives up to the name (it’s quite literally a system that tracks applicants) but not the promise of helping every organization hire better, faster. It’s a one step forward, one step backwards type of technology — look, it’s amazing that we went from paper resumes and moving candidates along the hiring process by hand to a centralized system that could store and sort information on thousands of people, but it’s less amazing that we actually expect our hiring teams to use technology that forces them to sort through information on thousands of people. And use it for up to eight hours a day (plus all that extra time playing phone tag or digging through inboxes).

Out of the frying pan, into the fire. The traditional ATS didn’t actually eliminate the tedium, it just changed how we interface with it

And that’s the main problem with the traditional ATS: You only really get out what you put into it — and most people who hire don’t actually have any extra time (which is why they need technology to help them to begin with. Oh, the irony.). So the ATS has always been a bit of an awkward fit for overworked and understaffed recruiting teams — and it’s essentially been impossible to use for hourly location managers who already have full-time jobs managing staff and serving customers. 

Here’s some friction points that hiring teams deal with every single day that a traditional ATS doesn’t solve for:

  • Sourcing candidates and increasing applicant flow.
  • Actively screening and interview scheduling (re-scheduling) candidates around the recruiter or hiring manager’s calendar.
  • Answering important candidate questions immediately, 24/7.
  • Creating a personal hiring experience that candidates love (and actually converts), at scale.
  • Reducing overall amount of admin work for hiring teams, particularly in the hourly hiring space.

That’s why there's a running joke in the TA world that nobody loves their ATS. 

Some organizations might tolerate or in some cases even like their ATS of choice, but love? You can bet your budget that if a business case isn’t being written to change your ATS as we speak, it will happen within the next 3-5 years. Everyone is chasing something better only to find more of the same.

But with the arrival of AI, that “something better” is no longer just a carrot on a stick.

How AI has transformed the ATS.

It’s funny, because talking about how AI or automation has transformed our own lives feels completely reductive. Siri. Alexa. Tesla. Waymo. The app you order your food on when you don’t want to get off the couch. 

Yeah, we get it. This stuff works. It’s great. Obviously. 

But since hiring technology has mostly been stuck in the same place for the past 25 years, even ho-hum implementation of automation feels groundbreaking. 

In essence:

AI has helped automate all the BS — the boring stuff, in this case (although the other meaning is also accurate) — from the hiring process, creating better, faster experiences for everyone. And it’s taken what has traditionally been a passive, static piece of tech and transformed it into something that actually actively works for hiring teams. 

AI, when it’s used correctly, is a tool that can make basic decisions and automate simple tasks at scale. When it comes to hiring, we like to think of it as sort of an Ironman suit for recruiters and hiring managers; it’s something that enhances their abilities and empowers them to do better, more valuable work. It can take a tedious task (like screening a candidate) and do it 100,000 times with precision and consistency, while a hiring manager invests that time back into providing customer experiences. 

What does this look like specifically? Let’s use interview scheduling as an example.

Scheduling candidate interviews in a traditional ATS is marginally automated. Typically, it requires a recruiter to go into the system, change a status, which then triggers a prebuilt email to be sent to the candidate. Once the candidate responds, the recruiter then needs to go into their own inbox, find the message, and manually respond. If a time is settled on, the recruiter still needs to manually add it to their calendar. 

And if a candidate needs to reschedule or gets confused about logistics? Good luck. You’ll never hear from that candidate again, let alone hire them. 

But AI has totally eliminated the tedium here. A conversational ATS powered by AI can automate all of this via text message, and do it thousands of times a day. It looks like this:

Here are other ways that AI has changed the ATS forever: 

The solution to the traditional ATS is a conversational one. 

We believe that everything — including hiring — is better when it’s conversational. Because that’s the way humans are literally born to interact.

Think about it this way: 50,000 years ago the first homo sapiens got things done through natural language. If caveman Grog needed to hire a new forager in order to meet growing demand for berries (Grog’s boss was a real stickler), he did it through 1:1 conversations. 

And it worked. Grog hired an assistant, and Grog picked more berries, and life was good. 

So that’s how Grog and his ancestor’s did it for thousands of years. 

But at some point hiring one person at a time wasn’t enough. We needed to hire two. And then 10. And then 1,000. Which, of course, is impossible without the use of technology. So we invented systems to help us communicate with, and track, more people — the ATS was born. The problem is that, at the time, technology simply wasn’t sophisticated enough to take that intimate, 1:1 conversational format and scale it en masse. But we needed to hire nonetheless. 

And so we designed the ATS as best we could.

And we built digital walls.

And created form fields and logins. 

And added in clunky UI.

Naturally, gaps and barriers and blackholes followed. 

Eventually, there was so much technology between hiring teams and candidates that it barely even felt like they were communicating at all. Hiring became a long, impersonal slog. And now here we are in 2023, collectively struggling to fill roles at rates we’ve never seen before. It’s been a massive, industry-wide problem that seems to only be getting worse. 

But by implementing conversational AI into the ATS, we now have a way to solve it. 

A conversational ATS takes what has become impersonal and tedious, and makes it lightweight (but not too lightweight), fast, and — most importantly — effective. It removes all of the BS and leaves candidates and hiring teams with ways to interface in a way that replicates the amazing 1:1 experience that worked so well for millennia.

You could actually argue that the conversational ATS isn’t new. It always existed. We just finally have a way to scale it.

Somewhere, Grog is smiling.

What a conversational ATS does and why it matters. 

It’s a genuine, actual hiring machine.


In a more broad sense, it does what the original applicant tracking system always promised while also getting us back to communicating — and hiring — the way we were always meant to. The impact of this has been monumental: 

Automation x conversational x mobile = lightning in a bottle. Especially for frontline hiring.

Remember, the ATS was built with large companies in mind to serve as a system of compliance and to support full time recruiters. Nothing about the traditional applicant tracking system was designed for the hourly hiring manager — it was just used out of necessity because nothing else was available. 

But the conversational ATS is built specifically for the frontline hiring manager (with the added bonus of being equally effective for corporate recruiters). 

Why? Because in addition to a million other responsibilities, a hiring manager also has to play the role of their store location’s recruiter. But they’re not a recruiter. And can’t be.  

When they’re understaffed, they have to take on more work to keep the business optimized — stepping into the vacant role, supporting customer concerns, triaging staff issues. But here’s the problem: At these times staffing is more important, but they end up having far less time to focus on it. So the result is that managers will default to batch processing — that is, they’ll review all new applicants at the same time, one day out of the week.

Essentially, simple decisions (sometimes as easy as pushing a button) are delayed for a full week. 

It’s at these times that it becomes clear that the traditional ATS has not been properly built to support this population of workers. But a conversational ATS has. And it’s effective for two incredibly simple reasons: 1.) The automation actually works (the button press that took a week is now instant) and 2.) It helps you increase candidates.

First, why does a conversational ATS "work" for frontline:

  • Natural language processing allows for far more accuracy.
  • The backend is designed to be simple for frontline managers while still doing heavy lifting. 
  • Easy to learn and use, which leads to high adoption. 
  • Mobile-based, so seamless for managers to use as they work.
  • All in one system with seamless integrations.

Second, how does a conversational ATS increase candidates:

  • No logins, passwords, or third party apps to download
  • Available to candidates 24/7, 365
  • Can speak in any language and answer questions that are most important to you.
  • Instant feedback, no waiting: Always know where you stand with screening and scheduling processes
  • Flexible: reschedule and get reminders — 1. Move fast: apply in minutes, get scheduled in minutes, interview asap 2. Meet candidates where they are: mobile devices / no tech to learn / no platforms to jump to.

Ultimately, all this good stuff leads to taking work off the hiring manager’s plate so they provide their true value as a team leader and customer service provider. On the candidate side, it’s creating a process that gets to them first, fastest, and then continues to move them through each stage as quickly as possible.

Conversion: up (the conversational ATS converts at a rate of 73% compared to 3% for a traditional ATS). Candidate and customer satisfaction: way up. Time invested: down. Costs: way, way, down.

The promise of the ATS: fulfilled. 

The future of the ATS (is now).

This is where we talk about ourselves a bit. But only in service of painting a clearer picture of the solution that we know can help you.

We mentioned before that the ATS as a hiring machine is more of a theory. An idea. A proof of concept. And the conversational ATS actually is one. We know, and we can prove it.

Because we built it. 

Back in 2019, we were faced with our biggest privilege (and problem) ever: transforming the hiring process for McDonald’s. You obviously know the name. But here’s some stats you probably didn’t know:

  • McDonald’s serves roughly 70 million customers per day.
  • They have nearly 40,000 locations across 100 different countries.
  • And they hire over 1 million hourly employee per year in the U.S. alone

Think about that for a second. If nothing else, McDonald’s is iconic for its dependability — no matter where you are on planet earth, you can count on getting the exact same burger at the same exact same speed. Over and over again. If there’s one hiring process that simply can’t go awry, it’s McDonald’s. There’s too much at stake. 

In order to support the massive hiring requirements for each restaurant and empower the store managers to provide better customer service, Paradox and McDonald’s co-created McHire, a hiring system powered by an AI assistant named Olivia who delivered a personal candidate experience by automating tasks like screening and interviewing scheduling through text conversations. 

We didn’t really know it at the time (and we certainly weren’t calling it this back then, but the world’s first conversational ATS was born. And it helped reduce McDonald’s time to hire by over 60% (to just a few days) and delivered a 95% positive candidate experience. The McHire platform has been adopted by over 90% of franchises despite being entirely optional.

This is real. It’s tangible. The future of the ATS is actually the here and now. Here are some of the other impact stories we’ve seen:

Look, we know you came here looking for basic answers on what an applicant tracking system is and how you can squeeze the most out of it. Hopefully you came away with a little bit more. Your ATS doesn’t have to just be a “why me?” type of technology. 

It can, and should be, a “yes, me!’ one. 

Written by
Erik Schmidt
Director of Content
Erik Schmidt
Written by
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