What is resume parsing? Everything you need to know

Last updated:
June 12, 2023
June 19, 2023
min read
Sim Samra
resume parsing
Table of contents

A recruiter’s job is not an easy one. For any job vacancy, a recruiter can expect to receive an around 250 applications, Imagine the number of hours needed to scan through every single resume to check an applicant’s suitability for a role and whether they should progress to the next stage. On top of that, there is the issue of ensuring the recruitment process is completely unbiased.

This is where resume parsing comes in. Rather than relying on the man-power of recruiters manually scanning through every document that is sent in, resume parsing software scans it automatically and sorts applicants by suitability according to work experience, education, and certifications. 

Resume parsing software is one tool that quickly grew into the HR spotlight as the hiring process shifted to digitally submitted resumes, and even more global growth is predicted over the next seven years. Resume parsing software combined with applicant tracking systems (ATS) helps make a recruiter's job less stressful and streamlines the candidate reviewing process. 

Not only does this save a huge amount of time, but it can also ensure the recruitment process is ‘blind’ to potentially biased factors such as name, nationality, gender, race, and age.

What is resume parsing?

Resume parsing technology allows data to be automatically extracted from resumes and organized in a way that recruiters can easily review. This happens through intelligent analysis of online submitted resumes and extraction of specific information, such as company-identified keywords and skills, to identify the best applicants. Then, recruiters can search for applicants with particular skills or experience using built-in search functions in the software. 

Resume parsing benefits both recruiters and applicants by eliminating manual processes to speed up the screening process. The software helps identify suitable candidates quickly, and unsuitable applicants are notified via automated responses. This saves recruiters hours each day, allowing them to focus on candidate interviewing and considerably improves the candidate's application experience. 

What are the pros and cons of resume parsing?

HR practitioners and recruiters must fully understand resume parsing to use the tool efficiently and recognize any flaws with the process. While resume parsing software is a popular option to save time and speed up hiring processes, it doesn't come without its challenges. 

One of the most widely recognized flaws is that many candidates are unaware of companies using resume parsing software. This can lead to the perfect candidate slipping through the cracks because their resume doesn't present critical information in a way allowing programs to extract data efficiently. Therefore, their application is omitted from shortlists or even declined despite the candidate being a good fit. 

Weighing all the pros and cons of resume parsing is essential to help you decide whether to add resume parsing or integrate ATS into your company's hiring processes. It can also help you choose the suitable CV parser that meets your organization's needs. 

Pros of resume parsing

There are many benefits of new and experienced recruiters utilizing resume parsers. It also offers several benefits to candidates by helping to streamline the application process. 

The top pros of resume parsing include the following: 

  • Saving time: It prevents companies from retyping candidate information for easier review of all applicants and eliminates hours of resume screening to determine top candidates. 
  • Promotes hiring transparency: With software extracting data from resumes and presenting them in a standard format and the ability to remove names, gender, race, and even locations, it eliminates hiring bias to promote fairness and transparency when selecting shortlisted candidates. 
  • Store all candidate data in one place: Recruiters can search the talent pool for specific skills, experience, or educational backgrounds in minutes, thanks to having one database with all candidate information. 
  • Improves hiring efficiency: The automation of resume parsing software greatly reduces the time it takes to hire and hiring costs. 
  • Reduced margin of error: Removing the manual aspect of extracting data from resumes lowers the chance of mistyping or skipping important details candidates included. 
  • Continued improvement: As technology advances, systems improve almost daily, improving CV parsing systems for reviewing and narrowing down candidates. The continual improvement of parsing software's ability to convert documents to a universal format and recognize larger vocabulary has allowed systems to overcome the early challenges during its inception. 

Cons of resume parsing

While resume parsing has numerous benefits, it's important to remember some of the software's shortcomings. Although some of these can be overcome with proper training and implementation techniques, they will require additional time and expenses initially. 

  • Improper system setup can be detrimental to finding top talent: In the beginning, the parsing software must be appropriately configured to avoid losing top talent in the system. 
  • Top talent can fall through the cracks: Since many candidates are unfamiliar with resume parsing, their resume formatting may cause them to get skipped over despite their fit for the position. Even the top parsing software systems can miss critical information because of complicated resume formats or information presented in headers and footers, leading top talent to get overlooked. 
  • Not all resume parsing software is created equally: Poor service provider selection could result in wasting money, as all vendors do not provide the same level of service. 
  • Getting organization support can be challenging: The value of parsing must be explained to everyone involved, or some may ignore it or be wary of jumping on board with the concept. 
  • Ongoing training is necessary: All recruiters must be trained on how parsing works, but it also requires ongoing training as technology advances and hiring processes evolve. 

What should resume parsing software include?

All resume parsing vendors do not provide the same level of service or offer the same features. Some providers pride themselves on staying on the cutting edge of parsing development, while others sell outdated options. Therefore, you must do your homework thoroughly before investing in CV parsing software. Check for free trials before committing to a specific system to ensure the software will provide the ROI you expect and avoid vendors claiming 100% accuracy since there's no such thing. Under ideal conditions, human accuracy sits at about 97% to 99%, but many recruiters are not working under ideal conditions. Top-rated parsing software uses the latest advancements in artificial intelligence, machine learning, and text mining and analysis to ensure up to 95% data processing accuracy.

Some things to check that the resume parsing software can do include: 

  • Parse resume in all formats, including PDF, Doc, Docx, HTML, and RTF.
  • Easily integrate with your existing HR systems and ATS.
  • Contain a detailed taxonomies library for identifying candidate skills.
  • Bulk retrieve resume data from multiple resumes at once. 
  • Use semantic search to match data. 
  • Utilize various fields for extracted information.
  • Create custom fields or configure fields to fit your unique requirements. 
  • Support multiple languages by automatically identifying regions and languages for parsing. 
  • Simplify the data acquisition process.
  • Utilize deep learning parsing algorithms for more accurate data extraction and identification of resume data for improved search results. 
  • Provide summaries to help recruiters effectively evaluate candidates with an applicant summary review. 
  • Integrate with online applications. 
  • Include an option for candidates to apply using their LinkedIn profiles. 
  • Provide parsed data in a uniform format for easy candidate review. 

How to use an ATS for resume parsing 

ATS is a tool used by many companies to streamline their hiring and recruiting processes, and it continues to grow to become the norm. A recent report found that over 98% of Fortune 500 companies, 66% of large companies, and 35% of small organizations use ATS for their recruitment needs. While many ATS software includes parsing tools to manage candidates seamlessly, if yours doesn't, it is typically easy to integrate the two programs. However, if integration isn't possible, it may be time to look for a new service provider that can provide ATS and resume parsing in one. 

Using ATS for resume parsing offers many advantages to recruiting agencies and companies:

  • It allows for real-time collaboration concerning candidates' applications and information, allowing involved parties to share updates and help eliminate hiring bias in organizations.
  • It helps to identify candidates faster. Combining ATS's ability to conduct extensive searches on potential candidates (such as data from social media pages) and the resume parser identifying important keywords on their applications, shortlisted candidates are selected quicker than manually reviewing each resume.
  • The applicant tracking system stores all candidate data and resumes in one place and automatically scores them by relevancy to the position. 

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