When you apply for a job as a doctor, they don't make you demonstrate surgical techniques. They take your board certification and ask you questions about what you've done in the past, things that went wrong and what you learned from that experience, and so on. They just assume you have the technical skills if you have the license.
Now, I'll admit that with doctors you are legally required to have the license, and we certainly don't need to go that far. If a small startup wants to take a chance on "unlicensed software engineers" or even offer to pay for the exam as a job perk (like a lot of law firms do for their interns), then great! But I can see a lot of time and effort saved if all the big enterprises would get together and come up with a national certification exam that you take once. Or even better, a series of exams for junior/senior/staff/principle, so neither candidates nor hiring managers have to waste time on tech assessments.
One of the keys would be making the exam inclusive for neurodivergent candidates, people with disabilities, etc. But this can be solved.