It could be entirely legit, consulting company I used to work lost lots of their staff that way in the last downturn.

On the other hand, it could be a way to get a contractor at permie wages - and minimal or no benefits - for a short period of time. A package you wouldn't go for if you were told what it was up-front, in other words.

I've heard of this happening too, and you've not really got much in the way of come-backs afterward. The other guy that's been there a month longer than they said was the max and still not hired could be a red flag. Or it could be nothing - just HR delay.

So, at the end of the day, shoot for an offer with hard figures and then make your mind up whether you think they're likely to stiff you would be my advice. If nothing else, practice interviews are invaluable if it has been a while - play every single one like you intend to work there.

I don't understand that. If I'm contract, I want contract pay. When I go perm, then I expect a pay cut down to perm pay. If you want to hire me the "contract to hire" route, that's fine, but you're not getting off cheap initially. "The position will pay 100k, so we'll pay you $48 an hour until then." I don't think so.

And will it be W-2 Contract through another company or 1099 contract? THis time around I was contract through a placement company that provided limited benefits including some 401k matching (not long enough to vest before I went perm). Still, come income tax time, it was easy, just another W-2.

This is bunk. It may give management a warm and fuzzy feeling that you know the standing of the company but it does nothing to further your development in the field you work in. My company makes everything from cattle feed to plastic pellets used for injection molding and I can't possibly keep abreast of how all our divisions are doing. We are also privately held so financial data isn't shared with employees or the public. None of it matters anyway, my job is no different if I am working for the US government or the mafia. Data is data and it is my job to make sure it is available, not to understand what it is used for. All you need to know is that the company makes widgets and the only financial data you should research is your own IT budget, everything else is just corporate fodder that removes your focus from the job at hand.

If you don't have any idea how the company is doing financially - how do you know if this job you're applying for (hypothetically) is right to take and will be there for more than a day or two?

Private companies can pose a difficulty in finding data but my example was just that, an example. The idea is for a candidate to show an interest in understanding the company's position in the market. A potential employee who does not do that or does not care - to me - is someone I would consider less. It is a lot to do with attitude and tying your own success to that of the organization's.

Two positions I am looking at (this one included) are faith-based non-profits. Hard to get all the information up front on them...

Foreign workers that are not eligible for perm position flood the contractor market and take those wages down.

I should point out that I'm referring to software development from the requirements phase to maintenance. One could spend hours grilling a candidate about of asp.net and never get to desktop development, web services, remoteing, integration schemes, COTS products, T-SQL, scaffolding and development tools/culture...yada..yada..yada.

Too many technologies. Too many candidates.
Bottom line - It's a employers market and people that need the work take what they can get.