My current job was contract-to-hire. Officially an 18 month period, but they converted me to employee after 3 months.
How it helps the candidate is exactly the same as how it helps the company: The interview process was a half hour phone screen, a 1-2 hour onsite with two people from the team, and a half hour followup call with the hiring manager who hadn't been able to join the onsite.
You know those week-long all-day interview processes many of us hate? Not necessary at all if the company is willing to give people a try and just move on if it doesn't work out.
You know how companies complain that they can't find good hires because their ridiculous interview process filters out the good ones and keeps the great ones from even applying? Having a sane short interview with probationary hire costs way less productive time and gets people onboard fast. And if someone doesn't work out, you can have another candidate take their place next week. It doesn't need to take months.