The responses in this whole sub-thread are a bit strange regarding the UK.

The typical model is for end clients or employers to hire a recruitment agent to find them either contract or permanent staff.

For contract staff, the agency will invoice the customer, keep approximately 10% and pass the difference to the contractor.

A contractor can choose to work as a LTD company or through an umbrella organisation depending on how much admin they want to take on and requirements of the client such as IR35.

Consultancies are a slightly different model where they own the outcome and more of the risk, and are perceived to be bringing IP and value as well as just the resource. This is where there is a the big delta between what the contractor is paid and what the consultancy charge.

In some cases, the agent can of course be disintermediated and the end client can recruit people directly.

In 20 years working in the London contract market, I have never heard of a situation where a contractor hires an agent to go out and sell their services. You can however build a relationship with agents to remain front of mine when their customers (end clients) have a relevant opportunity.

In a way, contract agents are operating as a match maker and making a living by taking a percentage of the day rate, so it is partly perception who is their customer. However, I think it's fair to say that they are hired by and represent the interests of the end client rather than the contractor.

I know you didn't ask all of these questions, but it seemed like the best place to respond :-).

> A contractor can choose to work as a LTD company or through an umbrella organisation depending on how much admin they want to take on and requirements of the client such as IR35.

IR35 is not a 'requirement of the client', it's HMRC's judgement of the relationship between contractor & client that matters.

True, but it's up to the client to decide if they are willing to take on the risk.

Sometimes - especially after the IR35 misery - an agent might also come with an umbrella company that will readily employ you for the duration of your contract for a cut. People usually tended to avoid these solutions due to tax inefficiencies. Not everyone though, I knew some people who chose comfort and didn't want to deal with the admin of an LTD and constant invoicing (however small inconvenience that might be), so they just went with the umbrella. I presume this is now a much more popular solution... An umbrella can also be provided by your accountant.

We have a mix here in aus.

The recruiter does the recruiting and provides access to an umbrella company but it's optional and up to you. The umbrella company is a separate entity that provides the service to the recruiter, 99% automated so fees for it are basically nothing.

The umbrella handles witholding tax, super payments, pay slips and a few compliance things like confirming you've watched your OSHA video quota for the year.

They used to be very similar.

Recruiters in the US don't really seem to work that way. Instead, they have contract shops, and hire you as an employee, or 1099 (contractor without the money).

I am very disappointed in what has happened to the technical recruitment industry. It used to be full of older folks, that obviously made great money. These days, it seems to be all young folks, and they don't seem to make anywhere near as much as they used to.