Ideally the employer would use a validated and reliable pre-existing manual skills test. If not available, they can develop their own but should go through the same iterations as if you were designing a written test. The validation process requires you address each type of validity: http://www.socialresearchmethods.net/kb/measval.php as well as addressing different types of reliability: http://www.socialresearchmethods.net/kb/reltypes.php
In short, you must confirm that the manual skills test actually provides a meaningful assessment of the required work skills/skills we are interested in, and provides reasonable/similar results over time or repeatedly.
David, thanks for your thoughts....the test they use is not validated....so they will either need to validate it themselves via the process you cite or hire someone to do it. I can talk with them about an internal process. If they want to go outside is that something you do or can you recommend a consultant or firm who does this?
I could assist in this process from a consulting standpoint, but the timing would have to be right. I do not, unfortunately, have a recommendation for a firm, though you may find someone at a university, such as myself, that could help.