StaffingCategory 03 of 10

Tech Recruiting

Definition

A tech recruiting agency specializes in software engineers, data professionals, security, infrastructure, and IT roles, placed either permanently or on contract through the agency's payroll. Companies hire them because technical talent rarely answers job ads, and because evaluating engineers requires people who speak the language.

3,000 to 6,000

US entities

20 to 30 percent

Permanent placement fee

3 to 10 days

Time to shortlist

We estimate 3,000 to 6,000 US entities in this category. Directional estimate, not a census figure.

How they make money

Permanent placements run on contingency at 20 to 30 percent of first-year salary, a few points above general recruiting because the candidates are scarcer and the salaries higher. Contract staffing is the other half of the business: the engineer sits on the agency's W-2 and is billed to you hourly at a markup, with the agency carrying payroll taxes and benefits. Contract-to-hire blends the two, with a conversion fee that shrinks the longer the contractor has worked.

Leadership searches, a VP of engineering or a CTO, usually move to a retained structure with staged payments. Whatever the model, insist on knowing the fee basis and, for contractors, the spread between bill rate and pay rate, because the size of that spread predicts whether the engineer stays.

What good ones have in common

Technical screening that would survive your engineers. Good firms either employ people with engineering backgrounds or run structured technical screens before submittal. Ask exactly what happens to a candidate between sourcing and your inbox.

Fluency in your stack. A recruiter who cannot distinguish Java from JavaScript, or a data engineer from a data scientist, will flood you with mismatches. Two minutes of conversation reveals this.

Current compensation data. Tech pay moves fast and varies with remote policy. Strong firms tell you when your budget is below market before the search wastes a month proving it.

A candidate experience engineers do not mock. Developers compare notes publicly. Firms known for spam damage your brand with every message sent in your name. Ask to see actual outreach copy.

Honest contractor sourcing. For contract roles, the firm should disclose where the person sits, their employment status, and whether any subcontracting layer exists between you and them.

References from engineering managers, not HR. Ask to speak with an engineering leader who has hired through the firm more than once. Repeat technical clients are the only endorsement that means much in this category.

Red flags

Keyword-stuffed resumes that fall apart live. Some shops coach or outright edit resumes to match your posting. If two candidates in a row cannot back up their own resume, the agency is the problem.

Bait-and-switch on contract talent. The person interviewed is not the person who shows up, or a strong candidate gets swapped for a cheaper subcontractor after signing. Verify identity at the first standup.

Fake job postings. Agencies that advertise roles that do not exist to harvest resumes will burn candidates in your market while wearing your job title.

Multi-layer subcontracting. Each layer between you and the engineer takes margin and blurs accountability. If the agency cannot name the actual employer of record, walk.

How the category is changing

The market has bifurcated. AI coding tools and the post-boom correction cut demand for junior generalist engineers, while AI, data, and security roles stay brutally competitive, so agencies are concentrating where scarcity still pays. Contract share keeps growing as companies hedge headcount, and global remote hiring lets firms shop the same role across several countries.

AI now sits on both sides of the desk: agencies use it to source and screen, candidates use it to mass-apply and to pass take-home tests, which is pushing serious firms back toward live technical conversations and verified work history. The durable edge is a genuine network of engineers who answer the recruiter's call, and that is getting harder, not easier, to fake.

Frequently asked questions

How much do tech recruiters charge?

Permanent placements typically cost 20 to 30 percent of first-year salary, employer-paid. Contract engineers are billed hourly at a marked-up rate with the agency as employer. Executive engineering searches are usually retained with staged payments.

Why use a tech recruiting agency instead of posting the job?

The engineers you want are mostly employed and not reading job boards. Postings collect volume, much of it AI-generated. A specialist firm reaches passive candidates and filters before you spend engineering hours interviewing.

What is contract-to-hire in tech?

You take the engineer on contract through the agency's payroll first, then convert them to your own payroll after a trial period. Conversion fees typically decrease with hours worked, so get the schedule in writing.

How fast can a tech recruiter fill a role?

For common stacks, a qualified shortlist typically lands within one to two weeks and an accepted offer within four to eight. Niche skills such as embedded systems or machine learning infrastructure take meaningfully longer.

Do tech recruiting agencies actually check coding skills?

The good ones do, through in-house technical screeners or structured assessments before submittal. Many do not and simply match keywords. Ask precisely what happens between sourcing and submittal, and judge them on the answer.

Should I hire engineers on contract or permanently?

Contract suits defined projects, uncertain budgets, and skills you need briefly, such as a migration. Permanent wins for core product work where context compounds. Many companies split the difference with contract-to-hire to test fit first.

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Tech recruiters sell to companies mid-scale-up, the same moment those companies are buying growth from marketing agencies, which makes this one of the most crowded and competitive corners of the world of staffing agencies.