I don't mind coding tests and whiteboard sessions myself but am finding coding tests not to be that informative on someone's knowledge since the implementation doesn't count as much as someone's understanding of what needs to be done and how well someone is able to grasp all the shortcomings of going with one approach vs going with some other.
At the end, it's always easy to google out the perfect solution to the problem (and/or quickly test several solutions in order to find the most convenient one for the given task) but if you don't understand underlying concepts and are not able to grasp what exactly you need to do no googling will help you with that.
I think its perfectly reasonable to find out if your candidates can do the work you need them to do. Never mind any kind of novelty requirement.
You have to understand what your technical challenges are and what you are hiring for..? Do you need a generalist or specialist? Does you product require a lot of new algorithm?
I have seen candidates that are extremely good at algorithmic puzzle, but lack the overall approach to build stuff, candidates that have a lot of projects and not so good at algorithmic riddle excel. Also seen the pretenders that show they have done a lot of projects and domain expertise, but when you dig in, you come to know that those project where either trival or they where just lucky to be a part of a team good team.
You will have to be very careful on getting candidates that actually are interested in building things and not just for the sake of interview and a job the prepare for the algorithmic riddle...but you never know for sure, until he/she start working on the project.
1. They don't take more than an hour or two
2. They closely resemble the work that the candidate will be doing on a day-to-day basis.
Leetcode style exercises have zero value to me as a hiring manager. I'm much more interested in whether people can gather requirements, think critically about them, ask questions, and provide a functioning solution that fulfills them.
With short live coding tests in person, Once it's done, it's done. I do not like to finish an interview, and still having to think about putting more time aside to do additional "work" for them in the form of a take-home test requiring an arbitrary length of time. The fact that they happen outside the office, outside of the worry of the company's time constraints, makes these sorts of tests more prone to exploitation. Self-contained interviews in a short time limit are my personal preference.
There is a Github page that is a compilation of companies that do not use whiteboard tests for their candidates. I'd like to find out if a similar list exists for companies that don't give their candidates take-home tests.
Some candidates can't code, but most companies throw the baby out with the bathwater. They don't realize the candidates they want simply refuse to interview because the process is insulting, and there's little correlation between demonstrated talent and an offer (a hard-to-accept fact that you've helped validate with your post).
The candidates they're left with are the desperate and the only hires are clones of the interviewer.