Originally published April 17, 2007 – Updated and expanded March 17, 2025

Hiring decisions are among the most consequential choices leaders make. A single hiring mistake can cost an organization between 30-150% of the employee’s annual salary when accounting for training, lost productivity, and replacement costs. More importantly, building high-performing teams requires selecting candidates who not only possess the right technical skills but also align with your organizational culture and work effectively within your specific environment.

Yet traditional interview methods remain surprisingly poor predictors of on-the-job performance. Research consistently shows that unstructured interviews have predictive validities of only 0.14-0.33, meaning they’re barely better than random selection. Even structured behavioral interviews only reach validities of around 0.51.

So what works better? I’ve found a remarkably effective approach: put candidates to work in a simulated or real environment before making a hiring decision.

The “Working Interview” Advantage

When we evaluate candidates solely through question-and-answer sessions, we’re essentially measuring their interview skills, not job skills. Work-based assessments fundamentally transform this dynamic by:

1. Directly observing performance rather than hearing claims about it
2. Testing both technical skills and soft skills simultaneously
3. Revealing how candidates approach novel problems and handle uncertainty
4. Providing candidates with a realistic preview of the actual work environment
5. Allowing both parties to assess mutual fit before committing

Consider this: Would you hire a musician without hearing them play? A chef without tasting their food? Why then would we hire knowledge workers or leaders without seeing them in action?

Three Models of Working Interviews

I’ve used three different approaches to work-based hiring, each with distinct advantages depending on your circumstances:

1. The Contractor-to-Hire Pathway

The gold standard approach involves bringing candidates on as short-term contractors (days, weeks, or months) before converting them to permanent employees. Companies like Automattic (makers of WordPress) famously use this model for virtually all hires.

Advantages:

• Provides the most complete and authentic assessment
• Allows substantial time to evaluate cultural fit and interpersonal dynamics
• Significantly reduces hiring mistakes
• Gives candidates full transparency about the role

How to implement: Start with a clearly defined project that has tangible deliverables and is representative of regular work. Pay candidates fairly for their time at market-appropriate contractor rates. Assign a mentor to provide context and feedback. Establish clear evaluation criteria upfront.

2. The Work Sample Exercise (Half-Day to Full-Day)

When contractor arrangements aren’t feasible, having candidates complete substantial work samples during a half-day or full-day “audition” provides an excellent middle ground.

Advantages:

• Requires less commitment than contractor arrangements
• More accessible to currently employed candidates
• Still provides meaningful data on performance
• Creates a controlled environment for fair comparison

How to implement: Design realistic scenarios that touch on core job competencies. For software engineers, this might be implementing a feature in your codebase. For marketers, developing a campaign strategy. Allow candidates to use the same resources they would have in the real job—internet access, communication with team members, reference materials.

3. The Abbreviated Assessment (1-3 Hours)

When time constraints are significant, even a 1-3 hour focused working session yields far more insight than traditional interviews alone.

Advantages:

• Fits within conventional interview schedules
• Can be administered to multiple candidates
• Provides standardized data points for comparison
• Reveals thinking processes and problem-solving approaches

How to implement: Create a condensed version of real work that emphasizes critical thinking over completion. Focus on how candidates approach problems, what questions they ask, and how they handle constraints more than perfect execution.

What to Look For During Working Interviews

During these working assessments, I’ve found certain behaviors and characteristics particularly revealing:

1. Resourcefulness: How does the candidate navigate challenges? Do they leverage available tools and resources effectively?
2. Communication style: How clearly do they articulate their thinking? How do they interact with potential colleagues and stakeholders?
3. Learning agility: How quickly do they absorb new information and adapt to unfamiliar systems or processes?
4. Collaboration approach: Do they appropriately balance self-sufficiency with seeking input? Can they incorporate feedback effectively?
5. Quality standards: What level of excellence do they demand of themselves without external pressure?
6. Problem-solving methodology: Do they attack symptoms or root causes? How systematic is their approach?
7. Documentation and knowledge sharing: Do they create artifacts that would help future team members?
8. Time management: How do they prioritize tasks under constraints?

Designing Effective Work Assessments

The quality of your evaluation depends heavily on how well you design the work sample. Great assessments share these characteristics:

• Representative complexity: The work should mirror the cognitive demands of the actual role
• Balanced scope: Challenging enough to be revealing but achievable in the allotted time
• Multiple dimensions: Should test technical skills alongside collaboration, communication, and judgment
• Clear evaluation criteria: Defined standards for what constitutes strong performance
• Minimal artificial constraints: Avoid arbitrary limitations that wouldn’t exist in the real job

Making This Approach Work for Leadership Roles

While designing working interviews for individual contributors is relatively straightforward, evaluating leadership candidates requires more creativity. At higher levels, consider these approaches:

1. Strategic review and presentation: Have candidates analyze your current strategy or a specific challenge, then present recommendations to the team they would lead.
2. Facilitated team exercise: Observe how they facilitate a meeting or problem-solving session with their potential direct reports.
3. Stakeholder interviews: Have them conduct information-gathering discussions with key stakeholders, then synthesize findings.
4. Decision analysis: Present them with a complex decision scenario with incomplete information, and evaluate their approach to reaching a conclusion.
5. Coaching simulation: Have them provide feedback on a work product or performance scenario.

Addressing Common Concerns

“This seems time-intensive. Is it worth it?”

Consider the cost of a bad hire—typically 30-150% of annual salary. A day of assessment for key roles offers tremendous ROI compared to months of underperformance or the disruption of rehiring.

“Won’t this approach disadvantage candidates who are currently employed?”

Be flexible with scheduling and consider offering evening or weekend options for employed candidates. If using the contractor approach, structure projects to accommodate part-time evening or weekend work.

“How do we legally protect our intellectual property?”

Have candidates sign appropriate non-disclosure agreements before access to proprietary information. For highly sensitive work, create simulated scenarios that don’t involve actual company data but test the same skills.

“How do we ensure fair compensation?”

Always pay candidates for substantial time investments. For half-day or longer engagements, providing fair compensation respects candidates’ time and demonstrates your company’s values.

Implementing This Approach in Your Organization

To incorporate working interviews into your hiring process:

1. Start small: Begin with one role or department to refine your approach.
2. Create evaluation rubrics: Develop clear standards for what constitutes strong performance.
3. Train interviewers: Ensure evaluators know what to look for and how to facilitate the process.
4. Collect data: Track the correlation between assessment performance and eventual job success.
5. Refine continuously: Use candidate and hiring manager feedback to improve the process.

Conclusion

The single most valuable lesson I’ve learned about hiring is this: past performance in similar situations is the best predictor of future success. Working interviews create these “similar situations” in a controlled environment, allowing both employer and candidate to make more informed decisions.

I’ve seen this approach dramatically reduce hiring mistakes while simultaneously improving candidate experience—candidates appreciate the transparency and the opportunity to showcase their real capabilities rather than just their interview skills.

In a knowledge economy where talent is the primary competitive advantage, investing time in work-based assessments isn’t just good practice—it’s a strategic imperative. The extra effort pays tremendous dividends in building high-performing teams that drive organizational success.

What methods have you found most effective in evaluating talent? Have you implemented working interviews in your organization? I’d love to hear your experiences in the comments.