Once you have raised a funding round, growing the team becomes the number one challenge for all founders. Research from Notion Capital showed that 80% of funding from series A/B is for people.
What is the ‘Embedded’ Model?
An Embedded Talent Partner works by embedding a recruiter and a sourcer into a company in order to reinforce the client’s current Talent Acquisition team for an agreed-upon amount of time – often 6 months, though occasionally as little as 3. This type of recruitment initiative is sometimes called RaaS, or Recruitment as a Service or RPO (Recruitment Process Outsourcing)
What does an Embedded Talent Partner do?
The work of an ETP can range from constructing a fully-fledged talent operation from inception to entering a company in the rush of a post-funding hiring effort or international expansion and assisting the client in reaching its desired hiring goals.
An ETP is the unexpected answer to the recruitment puzzle facing a startup or growth enterprise. Why so? Because a company struggling to meet its transforming people needs – often a firm backed by new VC investment, vying to meet its shareholders’ ambitious goals whilst governing more abstract issues like company culture, corporate vision, diversity – They might have opted for in-house acquisition, an agency recruiter or headhunter or some other form of Recruitment Process Outsourcing (RPO), or all three.
What type of results can you expect?
Typically an ETP will start working on 2 roles, and then increase roles every 2 weeks.
See below to compare money saved versus number of hires and timeframes:
How do Embedded Talent Partners get such good results?
How can they get such a complex job done in record time? For one thing, ETPs have foreknowledge of precisely what’s required to fill positions in hyper-growth tech companies, usually based on personal experience as our team are ex Heads of Talent, Head hunters or have worked with multiple clients who are all VC backed and hiring for similar roles.
ETPs possess a deep grasp of the complex, urgent needs of hiring managers and stakeholders. At Kandidate, for example, we manage the complete candidate journey from first outreach through engagement to hiring. This journey includes focus-points like engineering a hiring plan from a client’s business plan, salary benchmarking and employee benefits decisions, optimising referral drive and the interview process, talent market-mapping, handling the challenges of hiring in new territories, and much more besides.
Steep exposure to granular detail and intimacy with the client company is just one way an ETP provides the value-added other recruiters fail to.
Who should work with the Embedded model?
Any Startup or Scaleup hiring 15+ roles over the next 6 months should factor an ETP into their hiring drive to help hit hiring goals and minimise agency fees.
Fact: Repeat founders and serial entrepreneurs are more likely to work with ETPs than first-time founders, or founders with less experience and possibly fewer successes behind them. Serial entrepreneurs are all too familiar with the amount of money and time that go into scaling up teams – to put a delicate spin on what is frequently a dizzying challenge, if not a downright nightmare, for the company founder.
Experience has shown us and our clients that the earlier in the process a client engages with an ETP, the better the results.
ETPs work toward achieving hard, but not short-lived, results when they’re brought in. This is a matter of pride. In the tech space especially, short-term results – like those provided by an agency with one eye on their bottom line and the other on new or alternative clients. Not to mention the ensuing turbulence that employees suddenly leaving your company (for more freedom or a better offer) can wreak in terms of workflow, besides leaving a bigger financial dent than the price of acquiring them in the first place.
What are the benefits of the Embedded model?
This brings us to the outstanding benefit of the ETP solution: the financial savings. ETPs charge a fixed, monthly fee for an entire team over an agreed-upon time. They deliver better and longer-standing results for a lower price than alternative solutions, be they singular or collective. Should you be under pressure to ramp up your hiring – whether you’re a would-be unicorn or a Series A startup, whether you’re heading towards a strategic exit or an IPO – the Kandidate ETP may be the ideal solution for you, particularly if your in-house team lacks the capacity to scale up at the necessary speed.
Such recruits are expensive and hard to find, so the combination of micro and macro factors suggests, again, the advantages of the ETP solution. Company founders have hardly any time, if perhaps more capital, available for solving such quandaries. Consequently they seek not just tangible results but undeniable impact when it comes to rapid scaling up. When the old agency solution seems to offer little more than a way to fill roles, in the way one ticks boxes, insourcing an ETP presents the better option all around – including increased odds on the longevity of the company, we’d argue.
Both speed of delivery and cost savings combined – given that external agencies will take up to 35% of an employee’s gross salary (average around 20%) – make this a no-brainer for many clients. And over a 1-2-year timespan, the ET solution becomes simply the more affordable, let alone wisest, option for a growing enterprise. The fixed-fee, monthly contract will only boost your cashflow. And ET teams can be scaled up (or down) at high speed too.
When should I NOT use an ETP?
An ETP may not be the best solution for lower volume hiring, like less than 15 recruits, or shorter periods like 3 months max. But if you’re hiring over 200 people a year, you’ll know that traditional solutions simply don’t get the job done well.
The business proposition for engaging with an ETP is solid. Predictable and fixed costs, exceptional results and a sensitivity to company culture and vision mean altogether less stress for founders and HR managers – plus more cohesion and less turbulence in the workplace, we’d argue.
An ETP could mean the difference between ultimate success and failure, without putting too fine a point on it. It’s a no-brainer for HR talents operating under the pressure of the tightest job market the world has seen since the end of World War II – at least, according to a Bloomberg News piece from April 2022.
Is the Embedded model the future of recruiting?
Embedded Talent Partners represent the focal point of the hybrid approach to recruiting in the 2020s. To suppose that mixing together internal and external teams risks confusing things, on the basis that too many cooks spoil the broth, at Kandidate we’ve found the hybrid approach ensures the exact opposite. Namely: clarity.
The hybrid method improves our clients’ capture of sought-after recruitees, evidence proves. Far from over-complicating the chain of command, the beauty of the hybrid approach lies in its simplicity. It helps to view the embedded talent arrangement as a partnership – in dialogue, in strategy – whilst understanding that the day-to-day execution of this partnership is delegated to the external recruiters embedded inside the hiring firm.
It’s less about streamlining internal and external teams than it is about outsourcing most of the responsibility and practice to the external partners alone. This allows the internal recruiting team to concentrate on goal-making and other priorities without the extra burden of turning theory into practice and practice into results.
The endgame is shared by both sides but the execution is entrusted to the independent ET team. ETPs operate as a unified, self-managing team whose remit is getting the job done on schedule and per financial agreement – end of story.
Is this not another passing fad in recruitment?
Why has the hybrid approach gained so much traction in recent years? For one thing, it works better and faster than the old approach. For another, the hybrid method is a natural reaction to increasingly intensifying competition for talent. The sheer scarcity of targets, let alone perfect hires, in today’s markets has initiated the need for a different, more ingenious approach to acquiring talent. An elite hit squad is required right now if a client needs superb, timely results – or risks failure. In 2022, talent ranks second only to venture financing as the greatest challenge confronted by the tech sector. It’s like calling in the SAS or Navy SEALs to make the near-impossible happen.
Don’t forget, most VC investment – approximately 80%, according to Notion Capital – is allocated solely to acquiring talent in the year ahead. The figure speaks volumes. Money is not the problem – people are the problem! Which is why new enterprises and scaleups who have the funds devote it asymmetrically to human capital.
Newly-released research, like Personio’s new report called The Great Re-evaluation: Rethinking retention and performance management post pandemic, shows that nearly 46% of employees at European SMEs are considering a job move in the next year. This equals 46 million workers in total who are thinking about their next move, presenting a real risk to certain companies – although at Kandidate we view risk as opportunity.
On top of that, according to Personio, “48% of decision-makers surveyed feel their leadership team doesn’t realise their current skills shortages”. In fact, the report asserts that “90% of HRDMs at European SMEs report that their businesses suffer from skills shortages, retention or hiring issues”. Bearing in mind that it can cost as much as 33% of an employee’s annual salary to replace them.
Do you have a recruitment headache that needs solving with speed and expert handling? Do you have shareholders to honour whose mandates are sometimes at odds with the daily reality of running a fast-expanding corporation, delivering short-term results whilst at the same time building a long-term culture based partly on retaining your best talents?
If so, consider Kandidate.