We do assessment tests for new hires. One written and one skills test. We do not expect the applicant to answer all the questions or edit all the images in the time given. What matters for the skills test is the quality of the decisions they made. The purpose of the written test is to tell us how much additional training they will need. We also give a Hue Test so we know how well they see color.
I took a retouching test once for a company in the mid-west. They had very specific goals for the images - color changes, complex masking (chain link fence), and compositing from photos shot in-studio of dirt (that was blasted with an air hose) into an outdoor image, and swapping out faces and arms. They gave me 2.5 hours.