No staffing agencies. No ongoing commissions. No middlemen. Just a trusted connection between your business and DachIT’s best IT talent.

Einleitung

When companies engage IT staffing agencies, they rarely see the full cost. The hourly rate that appears on the invoice represents just the visible portion of a pricing structure designed to maximise agency revenue over the life of the engagement.

This article exposes the hidden economics of staffing agency relationships and presents an alternative: direct partnerships that eliminate the “agency tax” entirely.

Anatomy of the Agency Markup

Staffing agencies charge markups that most clients underestimate. According to industry data, temporary IT staffing markups typically range from 30% to 75%, with specialised roles commanding even higher premiums (KORE1, 2026). For context, a developer paid $50 per hour might be billed to the client at $75 to $87.50 per hour — or more.

The markup covers several components:

• Payroll taxes and insurance: Approximately 10% of the pay rate for W-2 employees (Advance Partners, 2026).
• Recruitment and administrative overhead: The agency’s cost of finding, screening, and managing talent.
• Account management: The personnel who maintain the client relationship.
• Profit margin: What remains after covering the above costs.

For permanent placements, agencies typically charge 15% to 30% of the candidate’s first-year salary (Second Talent, 2025). A senior developer earning CHF 150,000 might generate a placement fee of CHF 22,500 to CHF 45,000 — before the agency provides any ongoing support.

The Compounding Problem

The true cost of agency relationships becomes apparent over time. Unlike one-time fees, ongoing markups compound with every hour worked.

Consider a scenario: A company engages three developers through a staffing agency at a 50% markup. If each developer works 2,000 hours per year at a base rate of $50 per hour, the annual “agency tax” amounts to:

3 developers × 2,000 hours × $25 markup = $150,000 per year

Over a three-year engagement, this represents $450,000 paid not to developers, but to the agency for managing the relationship.

These funds could alternatively support higher salaries (attracting better talent), additional team members, or investment in product development. Instead, they subsidise account managers and administrative infrastructure that add minimal value to the actual work.

What the Markup Buys

Agencies justify their markups by pointing to the services they provide: recruitment, screening, payroll administration, and ongoing management. These services have value — but their value decreases dramatically once a relationship is established.

In the early stages, agencies reduce friction by handling sourcing and initial vetting. But once a company has identified developers who fit their needs, the ongoing “management” often consists of little more than invoice processing and periodic check-ins.

The misalignment is structural. Agencies benefit from ongoing relationships regardless of whether their involvement adds value. Clients pay for continuous management whether they need it or not.

The Direct Alternative

Direct partnerships between companies and development teams eliminate this structural inefficiency. When two organisations work together without intermediaries, several benefits emerge:

Transparent pricing. Clients pay the actual cost of development, not the cost plus 30% to 75%. Savings can be invested in better talent or additional capacity.

Direct accountability. Without account managers filtering communication, problems surface faster and get resolved more efficiently.

Aligned incentives. Development partners succeed by delivering quality work, not by maximising billable hours under agency management.

Long-term relationships. Direct partnerships encourage both parties to invest in the relationship, leading to deeper understanding of business needs and better outcomes over time.

The Introduction Model

Recognising the value of initial matchmaking while rejecting ongoing agency involvement, some companies have adopted an introduction model. Under this approach, a connector identifies suitable partners, facilitates introductions, and then exits the relationship.

The introduction fee — paid once — covers the cost of finding and vetting potential partners. After the introduction, the companies work together directly with no ongoing commissions, markups, or middleman management.

This model is particularly well-suited to partnerships with Ukrainian IT companies. Ukraine’s IT sector exports services to 147 countries and employs over 300,000 professionals (Digital State, 2025). The challenge for DACH companies is not finding Ukrainian talent — it is identifying which of the 2,000+ Ukrainian IT companies (Ukrainska Pravda, 2025) will be the right fit.

A connector who understands both the DACH market and the Ukrainian IT ecosystem can provide significant value in this matching process. But that value is concentrated at the beginning of the relationship, not distributed across years of ongoing management.

Conclusion

The staffing agency model was designed for a different era — one where finding and vetting international partners required continuous intermediation. Today, with mature IT ecosystems in countries like Ukraine and communication tools that enable seamless remote collaboration, the ongoing agency tax has become an unnecessary cost.

DACH companies seeking Ukrainian IT partnerships have a choice: pay 30% to 75% markups to agencies that sit between them and their developers, or work directly with their partners and invest those savings in the actual work.

The mathematics favour directness.

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References

Advance Partners. (2026, January 27). Staffing agency bill rate calculator: Markup, fees & profitability. https://www.advancepartners.com/calculate-how-to-price-your-staffing-services/

Digital State. (2025, June 23). Ukraine’s IT powerhouse 2024: From resilience to global reach. https://digitalstate.gov.ua/news/it-outsourcing/ukraines-it-powerhouse-2024-from-resilience-to-global-reach

KORE1. (2026, March 19). IT staffing agency pricing in 2026: Rates & fees guide. https://www.kore1.com/it-staffing-agency-pricing-2026-guide/

Second Talent. (2025, September 10). Staffing agency fee structures explained: What employers really pay. https://www.secondtalent.com/resources/staffing-agency-fee-structures/

Ukrainska Pravda. (2025, January 21). IT outsourcing 2025: What awaits the industry after the turbulent 2024. https://www.pravda.com.ua/eng/columns/2025/01/21/7494588/