Does your growing company actually need applicant tracking software?
Fix the process first, buy applicant tracking software second.
When candidates are scattered across inboxes, hiring managers are late with their feedback, and nobody has an overview of the hiring pipeline, applicant tracking software (ATS) sure look like the holy grail of hiring operations.
Sometimes they are. But often the real issue is weak sourcing, unclear ownership, poor interviews, slow decision-making or a position that was never properly defined.
All things an ATS won't fix.
Before you buy an ATS, you need to know whether your hiring bottlenecks are caused by tracking, ownership, hiring quality or scale problems. This diagnostic guide will help you figure out where your hiring process is breaking down and whether you actually need an ATS.
Who this guide is for: founders, HR teams, recruiters, hiring managers and growing companies that are moving beyond spreadsheets and want to understand whether applicant tracking software is the right next step.
How to know if you need an ATS: the "hiring chaos or software problem" test
Before you wonder "which ATS should we buy?", ask yourself "what kind of hiring problem do we have?" You can uncover your problem with a test we've developed called the "Hiring chaos or software problem?" test.
We think all hiring problems come down to one of four: tracking, ownership, scale, or hiring quality. An ATS will almost certainly solve a tracking issue, but might not be very useful for hiring quality. Run the test and diagnose your recruiting problems by answering the four questions below. It will reveal whether an ATS will help or whether you should fix your hiring process first.
1. Is it a tracking problem?
If your team and leadership don't have an overview of candidates or parts of the hiring process, you're dealing with a tracking problem. There are signs, the most common ones being:
Nobody knows how many candidates are spread across which stage.
The candidates' status isn't updated consistently.
All feedback is scattered across different places.
Hiring managers don't know what they need to do and when.
Leadership can't follow the hiring process.
Recruiters waste time updating spreadsheets instead of recruiting.
If you face any of these problems, applicant tracking software will help you out tremendously. But take care of the basics before you implement one. Define your hiring stages, assign each stage to an owner, decide which candidate information to save, make sure you know who will update candidate status, and decide which reports you actually need.
If you don't take care of the basics, your brand-new applicant tracking software will only centralise and automate the messy hiring process instead of fixing it.
2. Is it an ownership problem?
An ownership problem is when everybody knows what needs to happen, but nobody does it consistently. The signs are:
Feedback arrives late, despite reminders.
Hiring managers agree to deadlines, but don't respect them.
Decisions are made after informal follow-up.
Nobody owns the next step, leaving candidates waiting.
Recruiters become project managers, chasing everyone else involved to do their part.
These are issues applicant tracking software won't fix on its own. It can assign tasks, trigger reminders, and notify when tasks are overdue. But it can't create accountability. If managers don't treat hiring as their responsibility, applicant tracking software will only expose that lack of ownership. And at times, even makes it worse.
So, fix ownership first. Clarify who makes the hiring decision, who gives feedback after each hiring round, when feedback should be given, who should communicate with the candidate and what happens when a manager misses a deadline.
3. Is it a scale problem?
If your habit of doing things manually comes under pressure due to volume, that's a scale problem. There's nothing wrong with hiring one or two people using spreadsheets. Things get a little more complex once you hire for different roles across different teams and locations. Typical signs are when:
Several roles are open at the same time.
Multiple hiring managers are involved.
Candidate volume is increasing.
Scheduling interviews takes too much time.
Reporting is becoming important.
It gets harder to manage compliance requirements manually.
When facing these issues, an ATS tool can help you manage the recruiting process. But only if there is process clarity. Your hiring stages need to be standardised, hiring managers need to agree to use the system, you should know which workflows should be automated, and someone needs to own the implementation.
4. Is it a hiring quality problem?
If many applicants are unqualified, few candidates pass screening, interviews are inconsistent, and new hires don't match expectations, you're dealing with a hiring quality problem.
An ATS tool is usually not the first fix here.
Sure, it can help with source tracking or structured scorecards. But unclear role definitions, weak sourcing channels, poor interview design, or below-market compensation won't magically improve because you bought applicant tracking software. The key here is to fix your hiring inputs before you add software. Make sure:
The role is clearly defined and understood by everyone involved.
You know which skills and outcomes matter.
You're sourcing from the right channels.
Your interviews are structured around clear criteria.
Your offer is competitive enough.
Your employer story is compelling.
What an ATS tool can and can't fix
Here's an overview of common hiring issues and whether an ATS tool can solve them.
These are deeper hiring problems. An ATS may make them more visible, but it will not solve them by itself.
| Hiring problem | Why an ATS won’t fix it | What to fix first |
|---|---|---|
| Not knowing on which open roles to focus. | An ATS doesn’t help decide which roles are more important. | Align with leadership on headcount priorities, urgency and business impact. |
| Full pipeline, but only a few qualified candidates. | An ATS doesn’t fix sourcing channels, job messaging, targeting, and employer positioning. | Improve role positioning, sourcing strategy and job messaging. |
| Candidate expectations don’t align with the role. | An ATS can’t fix a mismatch between the job description, compensation, seniority, flexibility or actual role expectations. | Align job description, compensation, seniority, flexibility and actual role scope. |
| No agreement on what a good candidate looks like. | An ATS doesn’t help alignment on clear outcomes, must-have skills and trade-offs. | Define success outcomes, must-have skills, trade-offs and decision criteria. |
| Every interviewer evaluates differently. | An ATS can store evaluation criteria and scorecards, but won’t help you create them. | Align on role outcomes, evaluation criteria and interview ownership. |
| Not getting enough applicants. | An ATS doesn’t help create fitting job descriptions or build an employer brand. | Improve sourcing channels, job distribution, employer positioning, and offer attractiveness. |
| Getting too many applicants. | An ATS can’t fix overly broad targeting or unclear job messaging. | Tighten job messaging, screening questions and qualification criteria. |
These are problems where an ATS can support the process, but only if responsibilities, criteria and workflows are already clear.
| Hiring problem | Why an ATS only partly helps | What to fix first |
|---|---|---|
| Hiring managers don’t know what they need to do. | An ATS can assign tasks, show next steps and send reminders, but responsibilities still need to be clear. | Clarify manager responsibilities at each hiring stage. |
| Strong candidates drop out. | An ATS can show delays and support communication, but it cannot fix slow decision-making, weak offers, or a poor candidate experience by itself. | Improve decision speed, candidate communication and offer fit. |
| Hiring managers never respond. | An ATS can expose delays and trigger reminders, but it cannot make managers prioritise hiring. | Set feedback deadlines, accountability and escalation rules. |
| Feedback is too vague. | An ATS can structure feedback forms, but vague criteria will still lead to vague feedback. | Define what good feedback looks like and what evidence interviewers should capture. |
| Hiring managers evaluate based on gut feeling. | An ATS can support structured scorecards, but managers still need clear criteria and interview discipline. | Create structured assessment criteria and train interviewers to use them. |
| Every team hires differently. | An ATS can standardise stages and workflows, but the company first needs to agree on a core hiring process. | Define a standard hiring workflow with room for role-specific variation. |
| Spending too much time on admin. | An ATS can automate repetitive tasks, but automating a messy process will create more complexity. | Simplify the workflow before automating it. |
These are problems where an ATS can directly help by centralising information, improving visibility and making candidate tracking easier.
| Hiring problem | Why an ATS helps | What to fix first |
|---|---|---|
| Losing track of candidates. | An ATS centralises candidate records, hiring stages, notes and status updates. | Define hiring stages, status rules and who owns candidate updates. |
| Nobody knows exactly where hiring stands. | An ATS gives recruiters, hiring managers and leadership a shared view of the hiring pipeline. | Decide which pipeline metrics matter and who keeps the data clean. |
| Feedback gets lost, isn’t centralised and remains undocumented. | An ATS collects interview notes, scorecards and recommendations in one place. | Agree on where feedback should live and when it must be submitted. |
| Having a hard time handling the volumes of candidate data. | An ATS can manage higher candidate volume, permissions, retention rules and searchable candidate records. | Define data ownership, access rules and retention policy. |
Here's when you probably don't need an ATS
Many hiring teams buy hiring software because having one is a sign of maturity. That's the wrong reason. Don't buy an ATS when:
- Hiring is occasional.
- You can still manage and keep an overview of the entire hiring process.
- You can easily keep track of all candidates.
- Your hiring managers respond on time.
- You don't need pipeline reporting.
In that case, you're better off with a lightweight hiring process consisting of a structured spreadsheet, clear hiring stages, email templates, a feedback deadline and one person responsible for keeping the process moving.
Here's when you should consider an ATS
When you're struggling with managing your hiring process manually, you should consider an ATS. But only if you're dealing with at least 3 of the issues below:
You're hiring for multiple roles at the same time.
You're tracking candidates in multiple places.
Multiple hiring managers are involved.
You regularly have to wait for feedback.
Nobody at your company can get a reliable overview of the hiring process.
Candidate communication lacks consistency.
Your leadership needs reporting.
You're having a hard time managing candidate data manually.
Conclusion
In short, if you're struggling with visibility, manual coordination or scale, consider an ATS. If the issue is ownership, weak sourcing, slow decision-making or hiring quality, focus on fixing the process first.
When you do buy a system, don't focus on the feature list, but choose an ATS that fits your company's hiring volume, company stage, and hiring process maturity. You can find out more in our article on "how to choose the best applicant tracking software for your startup, scale-up or SME".