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Project-Based Interviews Spread Beyond IT Industry

By Allen Smith  4/16/2014
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The best interviewees in the world may not be the best employees, which is why some companies are asking applicants to complete real-world projects to show they are the best-qualified candidates for the positions.

This is becoming increasingly common among IT professionals. Stan Lemon, a software engineer in southern Indiana, noted that his applicants have had to “build a working application following a tutorial.” Specifications included “some modeling detail, relationships between models and basic technical requirements.”

He noted that “When I was hired, the company was using an online screening tool that involved 50 multiple-choice questions. It was dated and had little to no relevance to the type of development work applicants would actually be doing in their role. No one at the company liked it, and everyone thought it needed to change.”

Lemon, who blogs at, told SHRM Online “When we switched to the project-based model we set the bar higher and yielded better candidates, but we also didn’t hire as many, either. The pace of hiring slowed down, and this agitated management; however, employee retention increased with the hires that we made through the process. It was a delicate juggling act, but in the end the company was better off for it.”

He elaborated further: “The time for the project was not locked down, it simply needed to be completed, and as long as the applicant was communicating with us during the process we weren’t worried or concerned. In our experience, if the applicant was interested in the position they turned the code over to us in a reasonable amount of time. When they were not interested in the position, we simply weren’t interested in them, and so it didn’t matter how long they took to complete it.”

Lemon said that he strongly believes project-based interviews “would be valuable for any industry where problem-solving skills are necessary and where the success of the employee is based upon anything other than core memorization.”

Michael Schrage, a research fellow with the MIT Center for Digital Business, sees project-based interviews in such project-based industries as professional services firms, consulting, advertising and marketing, design and software development, as well as in slices of finance. “I’ve seen one in construction and facilities management. The project types—unsurprisingly—are mainstream to the firm and industry,” he said.

Off-the-Clock Work?

Project-based interviews seem like a great way to kill two birds with one stone: find the best talent for an open position, while solving a workplace problem. For the applicant, it also sounds like a good way to showcase his or her strengths, if that applicant is right for the role. But is this like making applicants do compensable work off the clock before they’re hired?

No, if it’s done within reasonable bounds, according to Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., who was acting administrator of the Wage and Hour Division under President George W. Bush. Robinson said he would not go beyond one day for the project-based portion of an interview, however. Also, reinforce to the applicant that it’s a project-based interview, he noted.

If the employer benefits from the project, it might pay a stipend for the idea.

Robinson compared project-based interviews to job views, which the Department of Labor has said are permissible in wage and hour letters. For example, in a wage and hour letter (Fair Labor Standards Act (FLSA) 2004-18), the Wage and Hour Division said it was OK for applicants to spend approximately 7.5 hours observing the job before being hired in a high-turnover position. With a job view, applicants are told they are not to perform any productive work and will not receive any pay for attending the job view.

Factors to consider in determining whether a job training situation for applicants creates an employment relationship are whether:

  • The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.
  • The training is for the benefit of the applicants.
  • The trainees do not displace regular employees, but work under close observation.
  • The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion its operations may actually be impeded.
  • The trainees are not necessarily entitled to a job at the conclusion of the training period.
  • The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

With project-based interviews, “it depends how far employers want to push the concept,” Robinson noted, including whether an employer reaps benefits from the applicants, even though they are not retained.

Mutual Benefit

But Schrage said, “The ‘free labor’ argument is a red herring. … Project-based assessments should be run for mutual benefit; if they’re not, you’re doing it wrong.”

And Lemon added that with project-based interviews: “The quality of employee you yield will be better. You’re setting a standard that you want more than just a code monkey. Furthermore, it shows the employee that as an employer you care about the quality of person you bring onto your team. That’s an attractive aspect of a company to a good candidate. The better quality employees, the better quality their work and the better quality their work, the most likely as a company you will be successful. It’s simply about success.”

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.


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