Although new technologies in ATS systems are improving the efficiency of the hiring process for many organizations, they also pose a potential threat to the privacy of job seekers. Companies and HR professionals need to educate themselves on the privacy concerns surrounding the use of ATS systems to take thoughtful steps that ensure the responsible collection, storage, and usage of applicant personal data and to avoid unintended bias in the hiring process.
In this article, we’ll explore the benefits of using ATS technology, as well as the new privacy reforms and best practices that are emerging to ensure the responsible use of ATS systems while protecting candidate data.
Overview of ATS System Benefits
AI tech, including ATS systems, are used by many companies and hiring managers to make resume screening and interview scheduling more streamlined, and to ensure that the resumes that reach hiring teams meet predetermined criteria and warrant serious consideration and review.
Generally speaking, a large number of applications are submitted for any open job and an ATS system automatically filters applications that lack requirements, qualifications, or experience integral to the position. Similarly, an ATS system readily identifies qualified candidates based on pre-entered keywords, and can even “grade” resumes for a more prioritized review later in the hiring process. Some companies also use an ATS platform to automate interview scheduling with candidates who pass the initial automated screening and are considered qualified for a posted job.
An ATS system eliminates the need to manually process a high percentage of underqualified candidates and resumes. Instead, it grants hiring teams more time to attentively and thoroughly review those applicants who are likely to be considered promising candidates, catching details that might have been missed using a high-volume manual review process. From the employee perspective, an ATS system can also expedite response times from employers, while it helps employers fill positions more quickly and reduce the possibility of a qualified candidate being hired by a competitor.
Legal and Ethical Considerations in Using an ATS System
ATS systems operated without careful user monitoring or human intervention can unknowingly filter out talented candidates or even exercise demographic bias in the review process. Additionally, AI-based hiring tools like an ATS system can sometimes access and review private information about applicants, factoring gender, age, race, marital status, and other demographic information into evaluations – a practice that is strictly illegal for employers during the hiring process.
In response to some of these and other concerns, the New York City Council voted in 2021 to pass a bill that requires automated system (including ATS system) audits. As a part of this bill, candidates and employees must be notified of an employer’s use of an automated assessment tool, whether it’s for hiring consideration or an internal promotion.
From the data privacy perspective, a number of different countries, regions, and states have already developed policies to improve data privacy and the security of personal information, including for job applicants. Whether it’s the CCPA in California or the better-known GDPR in the EU, employers must understand all of the current and emerging regulations that impact their jurisdiction(s) and industry. Regulations related to personal data almost uniformly mandate informing candidates in advance about the use of any ATS system and requesting consent for use after outlining how data will be collected, stored, or shared.
The New York City law, which is currently in effect, is likely the first of many that will attempt to impose specific regulations and safeguards against the unethical or biased use of ATS systems in the hiring process. Employers should strive to prepare for future regulations by taking measures to ensure that their use of an ATS system is ethical and paired with user monitoring that minimizes or eliminates demographic bias, encourages workplace diversity, responsibly processes data, and prioritizes fairness in the evaluation of applicant credentials.
Best Practices for Ethical Use of an ATS System
Developing a comprehensive ATS auditing process is the first major step to ensure the ethical use of an ATS system within your organization. An audit should work to identify any bias practiced by the ATS system, especially if there are clear outcome discrepancies that apply to specific demographic groups. When evaluating which applicants or resumes have been disqualified for past positions, it’s also important to note instances of justifiable decision-making or filtering on the part of the ATS system to identify which aspects of the ATS are functioning properly based on the parameters or keywords for particular postings. Lastly, it’s important to develop a schedule for conducting audits and properly document each audit, creating comprehensive reports that capture any new findings related to bias, efficacy, and outlining actions that will be taken to intervene to prevent demographic bias or unethical data processing in the future.
In addition to ATS and data audits, there are a number of additional steps organizations can take to protect personal data while processing and reviewing applications. A qualified ATS system should encrypt, secure, and anonymize data that is received, processed or stored in the hiring process. Once these tools and practices are in place or updated, they should be well-documented and shared with job candidates, existing employees, and clients.
Organizations should also be sure that, as with other forms of HR or HCM software, permissions and access controls are customized to only provide access to employees who require it as a vital aspect of the hiring process. Any personal or sensitive data that is not related to job responsibilities should not be collected or stored, and any collected data should not be stored or retained beyond necessary phases of the hiring process. At the job posting and recruitment stage, organizations can also take simple steps to prevent ATS bias or personal data collection by asking candidates to remove their name, address, and photograph from their resume to ensure a fairer evaluation of applicant talent, credentials, etc.
Since data security tools, ATS system best practices, and ATS regulations are regularly evolving, it’s essential to keep your employees up-to-date with training and compliance requirements. Communicating your ongoing efforts to implement responsible and ethical best practices with your ATS system and use of data also stands to foster greater trust and peace of mind among your clients, job candidates, and existing employees. All of these groups should be granted clear opportunities and options to review, update, or delete their data. They should also be entitled to withdraw consent regarding data retention or collection at any time.
With new data security, data privacy, and ATS system regulations appearing to keep applicant personal data protected, it’s essential for employers to closely monitor their recruitment and hiring practices to avoid noncompliance penalties, lawsuits, or reputational damage. The use of an ATS system can be incredibly beneficial for expediting and improving the hiring process, but organizations should take the measures we’ve outlined to ensure transparency and fairness with candidates, clients, and employees.
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