Applicant Tracking Systems have evolved far beyond simple keyword scanners. Modern ATS platforms like Workday, Greenhouse, Lever, and iCIMS use multi-stage processing:
Stage 1: Parse. The ATS extracts text from your file, identifying sections (experience, education, skills). This is where formatting errors kill applications — 43% of rejections happen here because the parser can't read the resume correctly.
Stage 2: Match. Keywords and phrases are compared against the job description. But it's not just exact matching anymore — semantic matching understands that 'managed a team' and 'team leadership' are related.
Stage 3: Rank. Candidates are scored and ranked. The top 20-30% get human review. The rest never reach a recruiter's screen.
The critical insight: most candidates fail at Stage 1, not Stage 2. They have the right qualifications but the wrong format.