A recruitment agency and a rented engineer solve different problems, and the fee comparison only works once you fix the time horizon. Below roughly 18 months of continuous work, renting capacity is cheaper on a fully loaded basis. Above it, the permanent hire wins, as long as you can absorb three to five months of waiting before anyone commits code.
what the agency fee buys
A contingency recruiter sells you a shortlist and a rebate clause. The fee usually lands between 18% and 25% of first-year gross salary, invoiced when the candidate starts, with a sliding rebate if they leave inside 8 to 12 weeks. On a €95,000 senior AI engineer, that is €17,000 to €24,000 paid before the person has opened a laptop.
The agency carries no delivery risk. It does not assess whether the candidate can build a retrieval pipeline that survives contact with your documents, because it cannot: screening is done by people who match keywords on a CV. That is the structural weakness. You pay on placement, not on output, and the technical judgement stays entirely on your side of the table.
the cost lines missing from most business cases
| Line | Typical size |
|---|---|
| Agency fee | 18% to 25% of first-year salary, due on start date |
| Employer on-costs | +25% to +45% over gross, depending on country |
| Ramp to full output | 6 to 12 weeks for a senior joiner on an unfamiliar stack |
| Replacement risk | the fee again if they leave after the rebate window |
| Management load | 2 to 4 hours a week of a lead’s time in the first quarter |
Put those together and year one of a permanent senior AI engineer costs 55% to 75% more than the headline salary. Year two costs the salary plus on-costs and nothing else, which is exactly why the horizon decides the answer. The arithmetic against a day rate is set out in our comparison of salary versus day rate, and current European figures sit on the daily rates page.
the calendar decides more often than the invoice
Search for a scarce profile runs 4 to 8 weeks to a signed offer. Then notice: one month is common in Poland and Romania, three months is standard for senior staff in Germany, and six appears in the UK at lead level. Add ramp and you are 4 to 6 months from the offer to useful output.
A rented senior engineer starts in 1 to 3 weeks. If the model is meant to be serving traffic in Q3, that difference costs more than the agency fee, and no amount of negotiating the percentage closes it.
when the permanent hire is the right call
Renting is the wrong answer when the work outlasts the horizon. Hire, and pay the agency, when:
- the roadmap holds 18 to 24 months of continuous work for the role
- the system is the product rather than a component of it
- someone has to sit in an on-call rotation with production access
- the value is domain knowledge that compounds, such as a pricing model nobody outside the company can reason about
We are a poor fit for all four. A day rate on a five-year platform team is an expensive way to run permanent headcount, and if that is your situation you should say no to us.
when renting is the right call
- scope you cannot specify yet, where a fixed job description would be wrong within a quarter
- a 3 to 9 month build with a hard date attached
- a skill you need once, such as an offline evaluation pipeline or a warehouse migration
- a headcount freeze with an operating budget still open, which is the most common reason our contracts get signed
the sequence most teams land on
Rent to build, hire to own. A rented team gets the first version into production while recruitment runs in parallel, and the permanent joiner inherits a working system with tests instead of a blank repository. Budget 4 to 8 weeks of overlap for handover, and write the handover into the statement of work rather than trusting goodwill at the end.
That sequence also fixes the specification problem. Six months of real code tells you what the permanent role actually needs to be, which is a better brief than the one you would have written in January. If you want to see how the rented side is structured, the staff augmentation contract model covers notice, rate mechanics and IP assignment, and you can put a shape on the engagement before committing to either route.