We have nothing against contractors, hell we used to be them but with each project we successfully delivered as contractors we realised that there was a gap that we were leaving behind. That gap was often the very same gap we were there to fill on a temporary basis, a skills gap.
Why do companies jump straight to recruiters when they have a need for a skillset?
Most likely this is based on 'what we have always done'. You need a person, determine if it's a one off skill requirement for a project or a longer engagement which makes the decision for you to engage with a contractor or find a permanent employee.
What are the pros and cons of using contractors and services?
Contractors are short term. They get in, do a project and get out. They will most likely hand over the completed solution to someone that has very few skills in the topic which is where the skills gap comes in.
Services are long term. The absolute biggest advantage with services is that you have a support agreement in place for on going support and amendments.