Most companies start out managing hiring with spreadsheets and email — a list of candidates here, a folder of CVs there, interview notes scattered across inboxes. For a while, that works. But as hiring picks up, it starts to creak, and at some point a company asks whether it needs an applicant tracking system. This guide explains what an ATS is, the signs you need one, and what to look for.
What an ATS is
An ATS — applicant tracking system — is software that manages the hiring process. It holds your candidates, tracks them through the stages of your hiring pipeline, coordinates the people involved in hiring, and keeps everything related to recruitment in one organised place. Rather than candidates and their information being scattered across spreadsheets, emails, and folders, an ATS centralises it and gives structure to the process.
At its core, an ATS does for hiring what a CRM does for sales: it tracks the people moving through your process, shows you where each one is, and helps you manage the flow. It typically handles job postings, applications, candidate information, the pipeline stages, interview scheduling and feedback, communication with candidates, and reporting on how hiring is going.
What an ATS actually does
To make it concrete, a typical ATS provides several capabilities. It manages job postings — creating job openings and often distributing them to job boards and a careers page. It collects and organises applications, so every candidate's information and CV is in one place rather than scattered. It tracks candidates through the pipeline, showing which stage each is at. It coordinates interviews — scheduling, collecting interviewer feedback, and keeping evaluations together. It manages communication with candidates, keeping a record of correspondence. And it provides reporting on the hiring funnel — how many candidates at each stage, conversion rates, time-to-hire, source effectiveness, and so on.
The net effect is to turn a scattered, manual process into an organised, visible, manageable one.
The signs you've outgrown spreadsheets
The question of whether you need an ATS usually answers itself once certain signs appear. You likely need one when:
Hiring volume has grown to the point where tracking candidates in spreadsheets is becoming unmanageable — too many candidates, too many roles, too much to keep straight by hand.
Candidates are falling through the cracks — people not followed up, applications lost, good candidates going cold because no one tracked them.
Multiple people are involved in hiring and coordination is getting messy — interview feedback scattered, no shared view of where candidates stand, duplicated effort.
You can't see how hiring is going — no visibility into the funnel, no idea where the bottlenecks are, no metrics.
The candidate experience is suffering — slow responses, disorganised process, because the underlying tracking is chaotic.
You're spending too much time on hiring administration — manually managing what a system could handle.
When several of these are true, the spreadsheet-and-email approach has been outgrown, and an ATS becomes worth it. (Our related guide on signs you've outgrown your HR tools covers this theme more broadly.)
When you might not need one yet
Conversely, a very small company hiring rarely — a handful of roles a year, one person managing it, low volume — may genuinely not need a dedicated ATS yet. For minimal hiring, spreadsheets can suffice, and adding a system before the volume justifies it is overhead without much benefit. The honest answer is that the need for an ATS scales with hiring volume and complexity; below a certain level, it is optional, and above it, it becomes close to essential. The signs above are the real indicator.
What to look for in an ATS
If you do need one, a few things are worth looking for. Ease of use, for both your team and candidates, since a clunky ATS that people avoid defeats the purpose. Coverage of the capabilities you need — pipeline management, interview coordination, communication, reporting. Good reporting, so you can actually see and improve your hiring. A good candidate experience, since the ATS shapes how candidates experience your process. And — a point often underweighted — how well it connects to the rest of your systems, particularly what happens when a candidate is hired.
Why a connected ATS matters most
This last point deserves emphasis. Hiring does not end at the offer — a hired candidate becomes an employee, who needs to be onboarded and put on payroll. In many setups, the ATS is a standalone tool disconnected from the HR and payroll systems, which means that when someone is hired, all their information has to be re-entered into the HR system and payroll from scratch. The hire exists in the ATS, then has to be recreated as an employee elsewhere — duplicate data entry, and a handoff where things get lost or mistyped.
A connected ATS — one that sits on the same platform as HR and payroll — removes this. When a candidate is hired, they flow directly into onboarding and payroll as an employee, with their information carried over rather than re-entered. The journey from candidate to employee is seamless because it is all one system. This is how Helion is built, with the ATS living natively alongside HR and payroll on one database — so that hiring and the rest of the employee lifecycle are connected, and a hire becomes an onboarded, paid employee without re-keying anything. For a company choosing an ATS, this connection is one of the most valuable and most overlooked considerations: a standalone ATS solves hiring but leaves the handoff to HR and payroll manual, whereas a connected one solves the whole journey. (Our guide on choosing HR software covers this integration question in depth.)
Common ATS mistakes
The recurring errors include:
Sticking with spreadsheets well past the point where hiring volume has outgrown them, losing candidates and visibility.
Adopting a clunky ATS that the team avoids, so it goes unused.
Choosing a standalone ATS without considering the handoff to HR and payroll, leaving that manual.
Not using the reporting, so the visibility an ATS offers goes to waste.
Over-investing in an ATS before hiring volume justifies it.
The bottom line
An ATS is software that organises and manages your hiring, and whether you need one depends mainly on your hiring volume and complexity — the signs of having outgrown spreadsheets are the real indicator. If you do need one, look hard at how it connects to the rest of your people systems, because a connected ATS that carries a hire seamlessly into onboarding and payroll solves far more than a standalone tool that leaves that handoff manual. For a growing company, the right ATS turns hiring from a scattered scramble into a managed process — and the right connected one makes the whole journey from candidate to employee coherent.
This guide gives general information on applicant tracking systems and reflects practical hiring experience. It is intended to help you assess whether and what kind of ATS your company needs, not as a prescription for any specific situation.