For my first job-search out of school, I actually started off by accepting a temporary, fully-remote contract position for one of the first startups I was interviewing with at the time.
After a short 1 hour pairing session with their front-end lead, I was offered a choice between going through the full 1 day interview gauntlet onsite at SF to arrive at a full-time offer on the spot, or a 2 month remote contract to give us both some more time to decide if we want to proceed with working together full-time (the actual length of the contract was negotiable, I just went with 2 months because I felt that's about how long it'd take me to finish interviewing with all the companies I was interested in). They made it clear that I could continue to interview at other companies during that time frame, as long as it wasn't so disruptive that it impacted my quality of work, and that I should feel free to turn down the full-time offer at the end of the contract if I find a better offer elsewhere. I felt the latter option suited me better at the time, because it was still fairly early in my interview process, so I didn't have any offers coming up on the immediate horizon, and I was still definitely interested in exploring my options some more before deciding on my first full-time job. So I accepted it.
I had a blast working there for those 2 months, learned a lot, and among other things, completed a decidedly non-trivial addition to their app. At the end of the contract, they offered me a very generous full-time position, but I ended up taking a competing offer at my current employer instead. There was no hard feelings, and we parted on good terms.
I guess what I'm trying to say is, yes, temp-to-perm definitely isn't right for every candidate (or most candidates, for that matter), but it will give both you and the candidate much more confidence in the decision on whether or not to go full time than any interview process ever could, and there's nothing wrong with offering it as an alternative to the standard interview gauntlet and letting the candidate decide what's best for them.
You definitely have to come to terms with the fact that it's a 2-way street though, meaning you have to accept the risk that the candidate might find at the end of the contract period that it's no longer in their best interest to proceed with a full-time position at your company, and that they are free to act on that realization. Otherwise, if you try to place limits on that aspect of the arrangement, the only candidates who would likely accept it would be the truly desperate ones whom you were probably never interested in hiring in the first place. I for one certainly wouldn't have accepted the arrangement if I wasn't free to continue interviewing during the contract and free to turn down the full time offer at the end of it.