“Contract-to-hire” means the conversion of a contractor to an employee. This can be by design – e.g., the client wishes to engage the individual as a contractor on a trial basis before committing to full-time employment. This gives both parties time to get a true sense of what each other has to offer.
If it does not work out from the perspective of the client, they can make that decision within the contract timeframe and move on. If it does not work out from the perspective of the employee, he or she can make that decision within the contract timeframe and show the position on their resume as a contract engagement rather than an employment role with a short duration.
Contract-to-hire may also happen unexpectedly when both parties wish to move from a contract relationship to a more permanent employment relationship. We have always said that if a client and consultant want to get married, we will be there throwing confetti.