Hiring manager here. Top-tier candidates do this all the time.

The alternative is to have them take time off of their dayjob and travel on-site for technical interviews.

In the real world, candidates are greatly appreciative of take-home assignments that let them work in the comfort of their own home, on their own equipment, at times that work best for them.

I'd be very worried about a paid assignment conflicting with clauses in my current contract.

Giving somebody a ~1 day takehome assignment, sure. But you aren't going to be able to actually do any real work in this amount of time.

Why wouldn't a top-tier candidate agree to this?

I feel like this is the solution that values candidate time the most. They don't have to do an interview, and I'm paying them for their time immediately.

That was my thought. Why would a top-tier candidate, who supposedly is already making enough money, bother to go through this process?

Is it really worth it to lose a day in your weekend for a couple hundred bucks and the hope of getting yet another assignment or a job?

If you're "top-tier" and you want another gig because you're not happy with your current one doing a 6 hour paid gig vs. doing a full day interview somewhere (which isn't paid) actually seems like it would be a lot better. It's not like you don't lose a day (or days) when interviewing. No reason it would have to be a weekend day.

I'm a "top-tier" candidate (at least, tech companies offer me a lot of money to work for them) and I don't think I'm alone in not really caring much about the process, as long as it's sufficiently technical that I'm not worried about working with people who can't program. If the full time job at the other end is interesting enough, the 6 hours of whiteboard/takehome/code review is just an annoying cost of doing business.

And, if we're being really honest here, there's a ton of informal backchannel talking that goes on, so your interview "performance" regardless of medium is affected by that at many places. I think if you aren't actively working to make your interview process objective, it's being strongly affected by many biases and informal relationships.

That's all to say that on the balance, taking up "some" or "all" of a candidates time isn't that interesting of thing to think about because the process is so broken in so many other ways and this one doesn't have a huge impact.

Adding to what the other person said, I've leveraged interviews to get flights to cool places. A free day trip to Seattle, nyc, or sf is a nice perk, and in my experience companies are flexible on travel arrangements (eg. Can you put the return flight a few days later, I'll handle any extra hotel costs).

I can't get that from a take home assignment.