This is great for the company. But for the candidate, I'm not convinced.
If I'm a W2 employee, I don't have any interest in complicating my tax return for a couple of days trial contract. Realistically, how much more are you going to learn about me in that time frame over a 1-2 hour technical interview.
Some plan on a longer trial contract - I see alot of 3-6 month contract-to-hire situations. This still isn't good enough because in startups the candidate will miss out on stock vesting. In large companies the candidate will be 'other'... there is a clear divide between FTE's and contractors at most large corps/there is a risk that the project might change/role availability will change.
If a company is serious about hiring employees. I'm convinced w2 from the start is the best.
It sends the message - we trust you, you belong, you're a part of our team. There can definitely be a probationary period, and there should be a more stringent hiring process. To me this is about signaling. If a company isn't willing to hire full time I think one of the following: 1. You don't have enough funding to do this right. 2. You don't know how to properly interview people. or 3. You think this is being generous but in reality don't fully understand the implications.
Remote work is about trust. If you don't trust someone - you don't have any business hiring them. Even in the current covid situation I'm seeing people hesitant to hire remotely. It's crazy. It's so much easier to slack off in an office than in a properly setup remote team.
Contractors are great for remote as well. But set clear expectations - straddling between contractor and employee is counter productive.