I'm sometimes involved in the interviewing process for my employer and we don't do any kind of coding tests. We do ask for them to submit a sample of their work and use it in the interview. I ask questions about the problem and about how they solved it. The code itself isn't usually that interesting, but the tangents we wander down usually are. If the person can't communicate well about a technical topic that they essentially chose, then they probably won't get an offer.
That said, I work for a small company and our turnover is pretty low. I haven't been involved in all that many hires.
This is pretty close to what my experience has been on the interviewee side. The conversations have been technical in regards to talking through problem solving, and esoteric coding philosophy conversations over lunch.
The only coding exams I've ever had to submit were while working at consulting agencies for clients that require an interview process to pick what the client regards as the best candidates for the contract.
I also worked at "very small" (15 dev consultants) to "medium-small" (300 or so technical consultants) companies, hence why I was curious if this was a bigconsulting thing or not.
So far it hasn’t been a problem. Junior candidates have shown code from a school project and others have submitted code from a personal project or from something they contributed to an open source project. I think the personal projects are the most interesting to talk about.
Expecting people to have personal projects outside work is very much selecting for a certain type of person. You're ruling out people who devote their time outside work to their families, or sport, or hobbies that don't involve programming.
I’m not ruling out anything. So far I have yet to find somebody who can’t come up with a code sample to bring to the interview. When that happens, I would probably give them a (paid) assignment. Maybe something like “fix issue #12345 on open source project X”. I’d have to think about it a little and discuss it with the candidate.
That said, I work for a small company and our turnover is pretty low. I haven't been involved in all that many hires.