A senior engineer billed by a consultancy and the same engineer billed by a staffing supplier sit 60% to 150% apart on the hourly rate, and most of that gap has nothing to do with the engineer. It pays for unbilled hours, a bid function, a management layer above the team, and whatever delivery risk the supplier has agreed to carry.
What sits inside a consultancy hourly rate
Rate cards are built backwards from a target utilisation, not forwards from a salary. If a firm assumes its engineers bill 70% of their working hours, every billed hour must cover roughly 1.4 hours of employment cost before it pays for anything else.
| Line in the rate | Rough share |
|---|---|
| Pay and employment cost of the person doing the work | 35% to 50% |
| Unbilled time: bench, holiday, training, internal projects | 10% to 20% |
| Sales, pre-sales and bid work | 5% to 15% |
| Engagement and account management above the delivery team | 5% to 15% |
| Risk cover, guarantees and margin | the remainder |
Buyers underestimate two of those lines. Bid cost is the first: a firm that runs eight-week competitive procurements with solution architects writing the response recovers that spend from the clients who sign. The second is the management layer, which is real work when a supplier owns an outcome and pure overhead when you already have a lead who runs the sprint.
Rates by supplier category
Directional hourly rates for a senior AI or data engineer delivered into a European client:
| Supplier category | € per hour | What the rate buys |
|---|---|---|
| Global systems integrator | 130 to 250 | Scale, contractual recourse, teams blended with juniors |
| Big-4-style consulting practice | 120 to 220 | Advisory plus build, staffing pyramid, partner oversight |
| Boutique specialist consultancy | 90 to 160 | Senior-heavy teams, small bench, thin cover for absence |
| Nearshore staff augmentation | 55 to 95 | Named engineers you direct yourself |
| Talent marketplace | 40 to 85 | Lowest rate, vetting and cover are yours |
Current figures by role sit on our daily rates page, and the reasoning behind the AI-specific numbers is in our breakdown of what a senior AI engineer costs per day in Europe.
What moves the number
- Seniority mix. A blended rate of €95 across six people can hide two seniors and four graduates. Ask for a rate against each named person, not a team average.
- Volume and term. Three or more engineers on a twelve-month commitment moves rates 5% to 15%; a six-week engagement moves them the other way by about as much.
- Onsite days. Every day per week onsite in a high-cost city adds travel time and dead time, usually 5% to 10% on the effective rate.
- Risk transfer. Fixed scope with delivery penalties carries a 20% to 40% premium over time and materials, because the supplier prices the tail of the estimate.
- Compliance shape. German labour-leasing rules and UK off-payroll rules decide which contract is legal for a given arrangement, and the compliant one is rarely the cheapest on paper.
Compare cost per delivered engineer-day, not the rate
A consultancy quoting €140 per hour where two hours in ten go to internal coordination and status reporting costs €175 per productive hour. A rented senior engineer at €85 who joins your standup and pulls from your backlog costs closer to €90. The ratio is nearly two to one, not the 1.6 to one the rate card suggests.
That arithmetic only holds if someone on your side sets priorities. Take the direction away and the cheaper hour produces less, which is the whole trade in renting engineers rather than buying an outcome.
When the low hourly rate is the wrong buy
- You have no engineering lead with capacity to run the work. Buy a managed outcome and accept the rate.
- The scope is a bounded artefact with a hard regulatory date. A fixed price transfers the estimation risk, and that transfer is worth paying for.
- The programme needs a supplier’s balance sheet behind the liability. Our contracts do not carry that, and a large integrator’s will.
- You need three days of a specialist. Mobilising a rented engineer for that is not worth the friction on either side.
Ask any supplier two questions before you sign: what is the rate for each named person, and what percentage of billed hours goes to work other than building. The answers separate quotes faster than the headline number does.