What it really costs to hire a software engineer in the UK: agency, in-house, or an agent
The agency fee is the number everyone quotes, but it is not the only one. Here is the full bill for one engineering hire in the UK in 2026, on three different routes, with the assumptions shown.
Ask a founder what it costs to hire a software engineer and you will hear the salary. Ask a finance lead and you will hear the agency fee on top. Both are right, and both leave most of the bill out.
This post works through one hire, a mid-to-senior engineer on £85,000, on the three routes a UK company actually has: a recruitment agency, doing it yourself, or handing the legwork to an agent. Every number below comes with its assumption, so you can swap in your own.
The part of the bill that never changes
Whichever route you take, the engineer costs more than the salary from day one. For 2025/26, employer National Insurance runs at 15 percent on everything above £5,000 a year, and auto-enrolment pension contributions add a minimum of 3 percent of qualifying earnings.
For an £85,000 salary that is roughly £12,000 of employer NI and around £1,300 of pension at the statutory floor, before any benefits, equipment or the desk they sit at. Call it £98,000 a year for an £85,000 engineer, and treat that as the baseline every route below sits on top of.
None of the three routes changes this number. They change what you pay to get the person to sign.
Route one: a recruitment agency
Contingent agencies, the "no hire, no fee" kind, charge a percentage of the first-year salary, invoiced when the candidate starts. Across the UK market the range is 15 to 25 percent; for software engineers 18 to 22 percent is typical, and retained searches for senior roles run 25 to 33 percent.
On £85,000:
| Fee level | What you pay |
|---|---|
| 15 percent | £12,750 |
| 20 percent | £17,000 |
| 25 percent | £21,250 |
| 30 percent, retained | £25,500 |
Most contracts carry a rebate period: if the engineer leaves inside eight to twelve weeks you get part of the fee back, on a sliding scale. Outside that window, nothing.
What you get for it is real. A good agency has candidates warm before your brief lands, handles the chasing, and takes the awkward salary conversation off your plate. What you do not get is control over who they approach or how they describe the role, and you are one of several clients the same recruiter is filling roles for that week.
Year-one total on this route, at 20 percent: about £115,000 for an £85,000 engineer.
Route two: doing it yourself
No fee, which is why almost every early-stage company starts here. The cost is time, and it is easy to underestimate because it is spread across weeks and across people.
A realistic in-house search for one engineer looks like this:
- Writing the brief and the advert: two to four hours, more if the role has not been hired before.
- Sourcing: finding and shortlisting 100 to 300 profiles that plausibly fit. At a few minutes each, that is 10 to 20 hours.
- Outreach: writing to the shortlist and chasing replies. Generic messages to engineers get single-digit reply rates, so the ones that work take a few minutes each to personalise. Another 10 to 15 hours.
- Screening: first calls with the 10 to 20 people who reply and look right. At 30 minutes plus notes, 8 to 12 hours.
- Interviews, offer, references: the part you would do on any route.
That is 30 to 50 hours of someone's time before the first proper interview, usually the hiring manager's, usually the most expensive engineer on the team. At a fully loaded £70 an hour it is £2,000 to £3,500 in time, spread over four to eight weeks, plus the cost of the role staying open that long. We break the calendar down in how long a UK engineering hire takes and where the weeks go.
The tooling bill is separate. LinkedIn's recruiting products start at around £135 a month for the Lite seat and run to five figures a year for the full product; we cover what that means at low hiring volume in what LinkedIn Recruiter costs a company that hires two engineers a year.
Year-one total on this route: about £100,000 to £102,000, with the hidden cost being that the hiring manager was not building anything for a good part of two months.
Route three: an agent does the legwork
The third route is newer. An agent runs the sourcing, writes and sends the outreach, and screens the replies, and you step in at the interviews and the final decision. HireBrain works this way, so we can put real prices on it rather than a percentage.
You pay per action, from prepaid credits:
- about £0.05 for every profile the agent scans and scores against your brief
- about £0.50 for every personalised outreach email it writes and sends
- £25 for every candidate who clears the AI technical screen
- interviews you run yourself cost nothing
- £2,500 on a successful placement, invoiced only when you make the hire
A campaign for our £85,000 engineer, shaped like the in-house search above, might scan 400 profiles (£20), write to 120 of them (£60), and put 8 through the technical screen (£200). With the placement fee that is £2,780 for the hire, and the first £10 of credits each month are free. Your own role will price differently; the estimate card on the launch page shows the number for your brief before you spend anything.
What you give up is the agency's human relationship with the candidate. What you keep is control: every message the agent sends references the candidate's actual work, and nothing reaches your calendar without passing a screen calibrated to your role.
Year-one total on this route: about £101,000 for an £85,000 engineer.
The three routes side by side
| Route | Cost to hire | Your hours before first interview | Year-one total, £85k engineer |
|---|---|---|---|
| Agency, 20 percent | £17,000 | 5 to 10 | about £115,000 |
| In-house | £2,000 to £3,500 in time | 30 to 50 | about £101,000 |
| Agent | about £2,800 | 5 to 10 | about £101,000 |
The honest reading of the table is that the agency fee is the only line big enough to change a hiring decision. Everything else is within a few thousand pounds, and the real difference between the in-house and the agent routes is whose weeks get spent.
What this does not cover
Three things are deliberately missing. Contractors and day rates, which are a different market with a different bill. The cost of a bad hire, which dwarfs every number above and is the reason the screening step matters more than the sourcing step. And the cost of the role staying open, which depends entirely on what the engineer was going to build.
If you only take one number away: for a single UK engineering hire, an agency costs roughly the same as an extra two months of that engineer's salary. That is sometimes worth paying. It is worth knowing you are paying it.