An interview is like dating and sometimes you think you found the one but maybe it doesn't work out in the end. Do you stop interviewing (or dating) people? No, you try again and hopefully take lessons from the last failed hire. A "failed hire" could actually be a failed process in your organization.

Also, every person you are interviewing has the option to interview with other companies. With that in mind, you should always be interviewing even if you aren't actually looking to hire at that moment. Sometimes you might find a really good candidate but, most importantly, you will have options yourself.

Last, I really like your idea of a paid temp position to assess fit. This will benefit everyone tremendously.