Embedded 2.0 - Race to the bottom or scramble for the top

As the economy strengthens, and the job market recovers, deploying an effective hybrid model for Talent Acquisition will be part of every 2025 plan.

For the time being, there isn’t a capacity issue, which was a major contributor to unprecedented growth for many embedded organisations during boom time. It’s fair to say right now, there is plenty of talent available in the market.

The general consensus is that in-house TA teams will not scale up to their previous levels, so they will look to supplement their demand for hiring with on-demand, embedded or RPO solutions. If it’s not part of the strategy now, then it certainly will be in the coming months.

So who are going to be the movers and shakers of 2025 and what will Embedded 2.0 bring to the table?

RPO v Embedded v On-Demand Recap

Let’s quickly recap who some of the RPO firms are. In the enterprise category, some of the most recognisable are Allegis Global Solutions , AMS , Cielo Talent , KellyOCG , 光辉国际 , Pontoon Solutions , PeopleScout , Randstad Enterprise & Wilson , to name just a few. All have solid brands, breadth and depth of delivery services, and can ramp up and down at a remarkable pace.

Then, from c.2016, spurred on by the rise in VC investment, the need for tech talent quickly gave birth to the boutique ‘embedded solutions’, acting as an extension to in-house TA teams. Chapter 2 , Elements , Join Talent , Move , Talentful & Troi , all hit the scene, carving out a new category.

And in turn there was the rise of on-demand solutions, but in my view these were more of an opportunistic play by recruitment agencies to provide a solution (and solidify revenue) for a growing client base.

Capability

With so many in-house teams being trimmed of expertise, especially the specialist roles within a Centre of Excellence, gaps and cracks are starting to appear. So can these voids be filled by a supplier?

Some would certainly think so, with enterprise RPO’s having dedicated teams and departments available to support organisations with expertise and project execution.

In addition, we are seeing the embedded space respond, making strategic appointments. Jon Stanners ???? ?? has joined Talent Point, bringing with him a wealth of experience across TA, culture and product. And another timely appointment last week was David J Brammer , joining Chapter 2 as their TA Strategy Director.

And to square the circle, eTeam , the US based global RPO/MSP firm, partnered/acquired Elements. The partnership could give Elements access to global resources, and similarly give eTeam localised expertise.

Flexibility

While the market is on the road to recovery, organisations remain hesitant about long term commitments for resources. Gone are the days of ‘12 month minimum contracts’ for embedded recruiters, with organisations opting for more simplistic project solutions, with the ability to scale up and down to minimise risk.

RPO’s often have the size and scale to move recruiters across accounts, but this isn’t as easy for embedded suppliers, especially if they are more niche and focussed on a narrow industry. One of the selling points of many embedded offerings was ‘trusted employees who are trained and available’, but this model is unlikely to be sustainable with expensive talent sitting on the bench.

We can argue that a more cost effective ‘contractor’ solution is perfectly sensible, or maybe even preferred, with recruiters being professional, adaptable and affable. Employment status isn’t a measure of a recruiters ability, or their commitment to delivering great work for a customer, especially if the commission is being managed effectively.

I’m certain that the ability to find and engage suitable resources, whatever their employment status, is going to be key as the market recovers.

Who might be the likely winners

Ultimately, it's going to be those who can figure out where and when the buying cycle starts.

In many situations, it’s going to be top down from VC’s and PE’s who have portfolio organisations and are predicting a capability or capacity issue following an investment-fuelled growth phase.

But for most, it's going to be CPO’s and Directors of TA, looking for ways to augment their existing team and mitigate risk. The organisations who were swift to slim down their TA teams at the onset of the downturn are a good bet to champion solutions on the cusp of the upturn. The question will be, are they likely to have both capability and capacity challenges, who is best suited to support their endeavours, and at what price.

And while I’m not privy to the Steven Bartlett arrangement at Chapter 2 (Companies House filing could tell a story), it’s certainly got the industry chattering. I’m pretty confident their events will continue to be well attended, and maybe the draw of a celebrity investor might see them tendering for some left-field opportunities.

Final thoughts

I’m expecting there to be a number of new strategic appointments over the coming weeks and months as the embedded industry looks to deliver more value to its customer base. There remains a wealth of top tier in-house talent waiting in the wings to support these organisations.

We might also see further consolidation as the embedded market matures, but whether that’s from enterprise RPO’s, or from Private Equity firms who already hold a portfolio of recruitment orgs, is anyone's guess.

With regards to contract awards, I’m anticipating a few catastrophes. Tenders are going to be competitive, grand promises will be made, and a spotlight will be shone on how the contract is delivered.

Lastly, I think we will see a few niche consultancies or fractional specialists helping organisations to review, reference and engage suppliers, helping them to select the right technology, capability and service provision. There are some very capable individuals on the market who have been through these cycles and weathered the storm.

Whichever direction the in-house market takes, we are all likely to see significant change as we approach 2025.?

Disclaimer

This article is not sponsored. The organisations and people mentioned are not exhaustive or by any means preferential. I’ve also purposefully omitted AI and Automation as a differentiator in any service provision or future service offering.

If anyone wishes to discuss this article privately, please DM me anytime.