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Can anyone tell me what does this really mean...

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I got the job. That is all.
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I think you answered your own question at the end. As someone who is currently employed, I would never quit my job to do a freelance trial run.
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Freelance to hire is not uncommon, especially if they are already freelance.
I have done this but only for very specific candidates that for one reason or another I was legitimately on the fence about - I thought they had the potential to be great, or the potential to be really not great. When I’ve offered it, I’ve been prepared to lose the candidate. And for the ones who took it, I made special efforts to be extra communicative about how things were going. I also made sure my agency was prepared and able to hire them shortly after they started.
I would not do this as a standard hiring practice for candidates, though. It’s not fair to most candidates, as you said, and you’ll miss out on some great talent who won’t entertain a conversation about leaving the security and benefits of a full time role for a freelance opportunity. And speaking as someone who has interviewed a lot - especially in this Great Resignation time - the times when I’ve honestly been on the fence are few. Most of the time the answer is pretty clear, and you might be tempted to offer freelance either out of desperation for a set of hands, or because you feel bad that they’re not right.
Totally agree. If someone is already freelancing it’s a different conversation entirely.
I think it’s only appropriate if you post the job as freelance to hire in the first place. It would be really off putting to spring that on someone when they weren’t expecting it, and maybe even offensive.
Either hire them or don’t in my opinion. If you feel comfortable asking them to freelance why wouldn’t you feel comfortable asking them to work for you?
Maybe you just aren’t asking them the right questions. If that’s your thought process, then why are you interviewing. I just feel like asking anyone to do a test run is a little dehumanizing. They probably have some type of work examples they can show you.
Maybe it’s more common than I think, but I would never accept that type of offer.
Be upfront. Lock-in a 4 week gig, and tell them at the end that there’s a FT job going if you want that person to hang around.
I’ve offered… my last series of three interviews came down to a it’s between you and some guy… we may need both of you. Next person - you’re just what we’re looking for and when I didn’t get it… I emailed her to thank her. Told her I understood the company was rapidly growing and that I was available on a Contact basis.