(Fair warning:   I’m not about to say, “Hell, Yeah!”)

The main reason for hiring through “consulting” (sic) firms, at least in the United States, is that it allows the company to apply a different tax-treatment to the expenditure.   The company is purchasing a contract for professional services, not a contractor, and therefore can record it as a capital expense.   The onus is upon the contracting company to provide an appropriate worker to fulfill the terms of the contract.

Bear in mind that there are many very-legitimate reasons why a company would wish to “buy a service” rather than “directly hire a warm body.”   (If you want someone to re-plumb your house, you want to engage them for that particular task and then be able to say, “thank you very much.”   You don’t want them to be, so to speak, moving in with you.)

Also remember that some companies are very difficult to “get into,” and they impose a lot of requirements on their contracting companies.   You see none of that.   “They have opened the door for you,” and sometimes this is – by design – the only way that the door can be opened.   (“Try before you buy,” and all of that.)   You get paid like clockwork, no matter if the customer has paid its invoice (in the last three months...) or not.   (It happens.   Often.)   As much as you might grouse about the difference between their “card rate” and what you receive, believe me, they earn it.

All firms are not created equal.   Some of them are true consulting firms, in that they possess subject-matter expertise, and they hire (and train) workers with that expertise.   Others do not.   A few, including some very well-known names, seem to be little more than “body shops.”   But I don’t think that it is quite fair, at least in my country, to typecast them that way (satisfying though it might be, if you feel ill-used).   Probably the best thing to do is to carefully review how a company that you are interested in working with/through is actually viewed within its industry segment – both by its customers and by its contractors.   Ask what benefits they offer.   Ask what training they provide.   Ask them what they do when you are “on the bench.”   Ask them if they know how to spell “Perl.”   Be choosy.   (Yes, you can be choosy!)   If you are not comfortable with the business arrangement or with how they seem to be approaching it, walk away.   The most powerful word in any language is “No.”

Make it a point to understand how the taxing authorities will view the arrangement from your perspective.   (Avoid at all costs a “nasty surprise” from the tax man!!)

P.S.:   If you signed it, and it’s not directly contrary to the laws of your land, it’s binding.   No matter what a slick saleslady said to you verbally...   Caveat Consultant.

By the way... consulting firms are sometimes viewed negatively by the hiring company, as well.   But, in large companies, the decision of which firm(s) must be used for procurement is usually made at a very high level.   (Kinda like not being able to book your airline ticket yourself, but you have to go through such-and-such travel agent who has the corporate contract.)   You might not have budget authorization to hire directly, even if you wanted to.   The CFO’s got the CEO’s ear, and that’s that.

If someone wants to hire me to do some work under an “employee-like” arrangement for a finite task or a finite period of time, I insist on being somebody else’s W-2 payroll and for them to carry the primary contract with the client.   (In other words, “a consulting arrangement.”)   I don’t want to monkey around with (eating beans while waiting for...) invoices, paying quarterly estimated tax payments or payroll taxes (which are due on-the-day whether you have been paid or not), and I don’t want to be seen by the US Internal Revenue Service as a “statutory employee.”   The IRS has a set of bright-line rules that it applies, and you $$ don’t $$ want $$ to $$ be $$ found $$ to be on the wrong side of them.