What a placement agency does
An agency of this kind runs three steps for you. It sources candidates for the role you describe, checks their skills and employs the one you choose. From then on that person works inside your team, on your tasks, under your direction. The agency invoices you for their time and handles their contract, salary and payroll.
It’s a recruiting and employment service with a monthly invoice attached. That’s useful when you know exactly what you need, you have someone to direct the work, and you want to skip a long hiring process. An agency doesn’t manage the work, take responsibility for the output or keep the knowledge when the person moves on.
Four kinds of provider you’ll meet
Local IT staffing agencies. Specialists in your own country, often contractors. They work your hours under your country’s law, and you pay close to a local salary plus a margin.
Offshore staffing agencies. Engineers employed in a lower-cost country and placed with clients abroad. The rate is lower, and quality varies widely with how the agency selects and supports its people. Our guide to offshore staffing covers what changes when the people sit in another country.
Niche agencies. Agencies that cover one area, such as data, security or a single language ecosystem. Deep candidate pools, narrow scope.
Talent marketplaces. Platforms that match you with independent freelancers. Fastest and cheapest, with vetting, continuity and management all on your side.
Agencies usually market their offer as IT staff augmentation services. The label varies more than the model.
How to vet an agency
Five areas tell you most of what you need to know.
Selection. How candidates are tested, by whom, and how many pass. An agency that can’t give you a number usually doesn’t track one.
Bench or recruiting. Whether the candidates already work for the agency or are recruited for your request. A bench starts faster. Recruiting fits your stack more closely.
Retention. How long people stay with the agency on average. Every departure costs you weeks of ramp-up for the next person.
Replacement terms. What happens when someone leaves or doesn’t fit: how fast a new person arrives, and who pays for the weeks of onboarding.
Workplace and security. Whether specialists work from the agency’s office on managed equipment, from a co-working space or from home.
Red flags when choosing an agency
- The proposed candidate is also interviewing with other clients for the same start date.
- The rate drops sharply after you push back, with no change in who you get.
- The agency can’t say who employs the person or where they will work.
- Replacement is “best effort”, with no time limit in the contract.
- Fees for hiring the person directly are high enough to lock you in.
- Every question about management gets the same answer: that’s up to you.
An agency, a marketplace or a managed team
Scroll the table sideways to see every column.
| Compared | Placement agency | Marketplace | Managed offshore team |
|---|---|---|---|
| Who manages day to day | You | You | The provider |
| Product knowledge when someone leaves | Leaves with them | Leaves with them | Stays with the team |
| Who follows up on performance | You | You | The provider |
| Time to get people | Days to weeks | Days | Four weeks to hire |
| Best fit | A defined, short gap | A small, low-risk task | Ongoing work on a growing product |
If an agency offers you a whole group of engineers, the choice becomes team augmentation vs managed team, and the same rows decide it.
Five questions to ask before you sign
- Who manages this person day to day, and whose week does that come out of?
- If the work is late, who is accountable?
- What happens to the knowledge if they leave in month eight?
- Am I paying for hours or for output?
- If my scope grows, does the agreement change or only the capacity?
The answers point you to the right model faster than any price comparison. A short, defined gap with a lead who has time points to an agency. Ongoing work on a growing product, with leads who are already stretched, points to a dedicated development team for hire from a managed provider.
When to choose a managed team over an agency
We built Azendo for the second case. You get augmentation for tech roles with the management included. The engineers are ours, each assigned full time to one client. They work from our offices in Chiang Mai and Bangkok, on equipment we provide. A service delivery manager meets you every two weeks to go through the deliveries, and steps in with training when something needs correcting. Every specialist has a Talent Success manager, a development plan that is rebuilt each quarter and coaching to match. They stay with Azendo for 3.3 years on average.
Companies use this model to hire remote developers without adding to their management load. If you need several roles at once, a dedicated development team brings them together. Developers, testers and DevOps engineers work under a single agreement, for one fixed monthly fee.
