What percentage do recruiters charge to hire an engineer?

Contingency agencies are commonly quoted at 20 to 25 percent of first year base salary, paid when the candidate starts. Retained search splits a similar or larger fee into stages and is paid whether or not a hire is made. The percentage matters less than whether the person running the search knows the market well enough to reach people you could not reach yourself.

What is the fully loaded cost of a software engineer?

Base salary plus roughly 25 to 40 percent, covering employer payroll taxes, health coverage, equipment, software and any office or stipend costs. Runway should be modeled on the loaded figure.

What is the real cost of a bad engineering hire?

More than any search fee. A weak senior hire rarely breaks anything visibly. The company gets slower, the standard softens, and the next strong engineer becomes harder to convince, usually across two quarters before anyone acts. Then there is severance and a second search with less runway.

For founders

How much does it cost to hire an engineer?

The agency fee is the number founders compare and the smallest one in the calculation. Where the money goes, including the two costs that never make it into the spreadsheet.

Zelcast

A senior engineer in the US costs their base salary plus roughly a quarter to a third again in payroll taxes, benefits, equipment and software. Finding them costs either founder time or a fee, and agency fees are commonly quoted at 20 to 25 percent of first year base. Those are the numbers that get compared. The two that decide whether the hire paid off are the ones nobody writes down: what the empty seat costs every month it stays empty, and what a wrong hire costs when you have to undo it.

What the salary leaves out

Whatever number goes in the offer letter, the company pays more: employer payroll taxes, health coverage, a laptop, the software the person needs on day one, and the share of an office or a stipend if you have one. Depending on where you are and what you offer, the loaded cost lands somewhere between 1.25 and 1.4 times base. For the base itself, levels.fyi is the closest thing to a public price list. Skip the national average and read the specific companies you compete with.

For an early team the risk is a planning error: founders budget the base against runway, then discover the real burn a month later. If you’re modeling a hire against months of runway, use the loaded figure.

What finding them costs

There are three ways to run a search and all of them cost something.

You do it yourself and pay no fee. The cost is founder hours, and at seed stage those are the most expensive hours in the company. A serious search for one senior engineer takes more than a weekend, because the strongest engineers do not apply to anything. It is sourcing, writing to people who owe you nothing, chasing replies, scheduling, and running a loop, over weeks, while you are also building and raising.

You hire a recruiter in house. That works once you’re hiring continuously. For one or two roles a year, you’re paying a salary to keep a pipeline warm that you don’t have the volume to fill.

You pay a fee. Contingency agencies are commonly quoted at 20 to 25 percent of first year base, paid when someone starts. Retained search splits a similar or larger fee into stages and gets paid whether or not you hire. What matters more than the percentage is whether the person doing the search knows the market well enough to be worth it.

The seat you have not filled

A senior role open for two months means two months where the work that role was meant to do does not get done, and two months is close to the average, as we set out in where the five to seven weeks actually go. On an early team that’s rarely abstract: it’s the integration that slips, the customer who waits, the founder writing code at night instead of selling.

No invoice arrives for any of that, so it rarely registers as a cost, even though it’s usually the biggest one in the calculation. A search that saves a few points on the fee and runs six weeks longer has not saved you anything.

The hire you have to undo

The expensive outcome is hiring the wrong person, watching the team slow down for two quarters while everyone hopes it turns around, then paying severance and starting again with less runway and a worse mood in the room.

A weak senior hire rarely breaks anything visibly. The damage shows up as things getting slower, standards getting softer, and the next great engineer being harder to convince. That costs more than any fee in this article.

So what should you spend

If you know the people you want and they will take your call, run the search yourself and pay nothing. If you don’t, check whether the person you’re paying shortens the distance to someone you wouldn’t otherwise have met.

Before paying any fee, ask whether the introduction was one you could have made yourself.

Common questions

What percentage do recruiters charge?: Contingency agencies commonly quote 20 to 25 percent of first year base, paid when the person starts. Retained search splits a similar fee into stages and is paid whether or not you hire.
Is it cheaper to hire without a recruiter?: Cheaper in fees, never free. The cost moves to founder hours, and at seed stage those are the most expensive hours in the company.
What is the fully loaded cost of an engineer?: Base plus roughly 25 to 40 percent for payroll taxes, benefits, equipment and software. Runway should be modeled on the loaded figure.
What does Zelcast cost?: A fee when someone is hired. No charge to talk to us, no charge for a brief, and no charge if we do not find the person.