Employers increasingly are asking job candidates to perform work for them gratis as part of the interview process. Here's how to do it right - and win the position.
For decades, George McAfee, a sales and business development expert in the tech industry, simply dialed a buddy when he was ready for a new job. So the 66-year-old executive got a big shock a couple of months ago when he sought his next gig. McAfee found himself making presentations, doing research, and giving talks to executives about everything from Asian distribution channels to structuring salaries -- all as part of the interview processes for four different jobs. Each project took about three days of work.
For McAfee, the free labor paid off. He landed a job as VP of business development at a Sacramento marketing firm in January. But he admits that he sometimes felt like employers were "using him for free." "You just have to accept that and not be offended," he says.
In today's competitive job market, employers are increasingly asking candidates to show -- not just tell -- what they can do. Top candidates are asked to solve problems on the spot, give feedback on products, and research new markets. "Companies ask for whatever they want, and people do it," says Cynthia Shapiro, an L.A.-based career strategist. One of Shapiro's clients created 10 greeting cards in 24 hours to win a graphic design job, while another client did market research and made a formal presentation to top executives -- only to hear that the company was no longer filling the position.
These case study-style interviews, also known as situational, scenario, or behavioral interviews, have been common among i-banking and consulting firms but are now permeating all sectors. Career experts say the techniques are relevant to even the upper echelons of executives -- those used to being wooed with box seats. SHL, the world's largest employment assessment provider, saw a 65% jump last year in employers using such techniques to vet candidates.
Employers are picky for good reason. Bad hires can cause lost productivity and sometimes even lawsuits, and harm morale as well. Replacing someone can cost two to three times a person's salary. And with budgets tight, there's little money for training. "Employers want plug-and-play people," says Colleen Aylward, president of executive search firm Devon James.
That's exactly why Smashburger, a fast-growing Denver burger chain that will open 60 new restaurants this year, asks its executive-level job seekers to give presentations on anything from how to sell in Canada to in-store branding. Even potential restaurant managers must pass role-playing tests in which interviewers act like a difficult customer. The approach, says Smashburger CEO Dave Prokupek, has given the company 10 to 15 new ideas -- including how to best track franchising leads and which trade shows to attend.
Smashburger disqualified one VP candidate when she admitted she paid an ad agency to write her presentation. When it came to hiring a president, Prokupek asked top candidates what they'd do in operations, branding, and real estate strategy. Two of them refused to do the work. A third, Scott Crane, surveyed the competition, interviewed restaurant crews, and left Christmas dinner early to polish his presentation. He got the job.
Ace the interview
Think the way they do. Before the interview, think about what company problems you might be asked to solve. Write down 10 questions that you would ask a candidate. “Phrase them in ‘situational’ types of queries, like ‘How long would you give a new VP of sales to hit quotas in a new market?’ ” says Colleen Aylward, president of search firm Devon James. Construct your own answers.
Do your research. Find out how the company is structured and funded, the background of management, and information on competitors. Sites like Zoominfo, Hoovers, and Glassdoor.com can offer insights, as can interviews found on YouTube. Tapping LinkedIn connections close to the company can prep you on the people you’ll meet.
Show up with stories. Once you know the company’s potential problems, come up with relevant anecdotes about what you did at another company. This way, you’re less likely to be caught off guard.
Turn questions into conversations. Keep up on current world events, industry news, and legislation and be prepared to relate them to the company. If asked, say, how you would reorganize a division to boost productivity, you can ask questions to create a more comfortable conversation. Says Aylward: “You could politely say, ‘Do you mind if I ask you a few questions about this division? I noticed you had a plant in Ireland. Is your business affected by the political unrest?’” That peer-to-peer conversation tells the interviewer that you are thinking beyond the job.
Attack your homework. Never decline any take-home assignments, and don’t skimp on the time it will take -- even if you feel a company is taking advantage of your labor. It may be testing to see how much you want the job. The good news: Those assignments are typically reserved for the top three to six candidates.
This article is from the March 19, 2012 issue of Fortune.