For years, growing businesses have been told they have two options when it comes to hiring: build an internal recruitment team, or outsource to a recruitment agency. For many mid-sized companies, neither fully works.
Internal teams struggle with sudden spikes in demand, specialist roles and rapid scaling periods. Agencies can move quickly, but they operate at arm's length from the business, which means inconsistent candidate experiences and a fee on every placement. The "agency vs in-house" debate is outdated. There's a third option, and for most mid-sized businesses it's the one that fits.
Why neither extreme works for mid-sized companies
Hiring for a mid-sized business looks very different from five years ago: faster growth expectations, tighter talent markets, leaner operations, more pressure on hiring managers, higher expectations of the employer brand, and more specialist roles. Against that, the two traditional models each fail in a predictable way.
Relying on agencies
Useful when speed matters; expensive and disconnected as a standing model. The usual frustrations: high fees per placement, limited understanding of the culture, several agencies competing on the same role, patchy candidate experience, and a short-term focus with no workforce planning. Agencies are incentivised by transactions, not outcomes, which is why we've written about why we're not a recruitment agency.
We've also set out how to cut recruitment agency costs, and which of five fixes suits which problem.
Building entirely in-house
Sounds attractive, but it means long lead times to hire the recruiters, limited specialist reach, high fixed cost, recruiters underused in quiet periods and overwhelmed in busy ones. An in-house function works at enterprise scale. Most mid-sized businesses need something that flexes.
The third option: embedded recruitment
An embedded recruitment service places recruiters inside your business, operating as an extension of your team. Unlike an agency, they work inside your process, under your brand, alongside your hiring managers, and they're measured on outcomes rather than placements. Unlike a permanent team, the support scales up and down with demand: a funding round, a new client win, a product launch, a restructure. You get the speed and expertise of agency hiring with the alignment of an internal team, and neither the per-hire fee nor the fixed headcount. For how an embedded engagement actually runs, see why embedded talent is reshaping recruitment.
Embedded is one of eleven ways to resource hiring, and we've compared them all on the same criteria if you want the full picture.
Embedded recruitment vs a traditional agency
How a traditional recruitment agency compares with an embedded recruitment service
| Traditional agency | Embedded recruitment service |
|---|---|
| Transactional relationship | Integrated partnership |
| Fee per placement | Flexible engagement structure |
| External process | Embedded within internal workflows |
| Limited brand immersion | Deep employer brand understanding |
| Reactive hiring | Strategic workforce planning |
| Candidate ownership varies | Consistent candidate experience |
| Short-term focus | Long-term hiring capability |
Six questions to ask before choosing a recruitment partner
How flexible is the model? Can they scale support up and down as demand changes, or are you signing into fixed recruiter numbers and long terms?
Will the recruiters operate as part of our business? Will they attend your meetings, work in your systems and represent your employer brand directly? Integration is the biggest difference between embedded delivery and outsourcing with a different label.
How do they measure success? Placements alone is the wrong answer. Look for time to hire, quality of hire, offer acceptance, candidate and hiring manager experience, and pipeline health.
What specialist expertise do they bring? Ask for the sectors of their last ten engagements, not the sector list on the website.
How transparent is the reporting? Dashboards, funnel analytics and regular stakeholder updates, or a monthly email.
What happens when hiring slows down? The question most buyers forget. If the model can't flex down without leaving you carrying fixed cost, it isn't flexible.
If you're comparing embedded providers specifically, our guide to which embedded recruitment provider is right for you goes through six buyer situations and who genuinely fits each.
Why this suits mid-sized companies in particular
Enterprises can afford large internal talent functions. Small businesses can get by on founder-led hiring. Mid-sized companies sit in the awkward middle: they need faster hiring than a start-up, more strategy and infrastructure than a small business, and specialist expertise, without the fixed overhead of a big in-house department. An embedded model fills that gap, and it means you don't overbuild the internal team too early. Our Embedded Talent playbook sets out how to run it.
Need a more flexible way to scale hiring?
The companies hiring most effectively aren't choosing between agencies and internal recruiters. They're combining internal ownership with embedded expertise and specialist support when they need it. If you'd like to talk through what that would look like for your growth plan, get in touch, or start with the Hiring Score self-assessment.
Agencies, in-house and embedded, answered
Yes, and that's the usual setup. An embedded recruiter sits inside the team you already have, works in your systems and under your brand, and takes the volume or the specialist roles your team can't cover. Your talent lead keeps ownership; the embedded recruiter adds capacity and expertise you'd otherwise buy from agencies one placement at a time.
The support scales down. That's the point of the model: a monthly engagement rather than permanent headcount, so you're not carrying a recruiter through a quiet quarter or paying a fee on every hire in a busy one. Check the notice terms before you sign, because flexing down is what separates a genuine embedded model from an agency with a retainer.
Vermelo is a UK talent solutions specialist delivering RPO, Project RPO, MSP, embedded talent (RaaS), total talent and talent advisory & consultancy. Named Best Recruitment Process Outsourcing (RPO) Business at the Global Recruiter Awards 2025. Part of the GWV Talent Solutions Group which includes Gerrard White Consulting and FlarePeople.