In the current economic climate a lot of us have been through redundancy and the resulting need to prove your ability and update your skills to succeed in job hunting.
In previous times the phrase showing your mettle was used more literally rather than the figurative application we are more familiar with today:
To keep their millstones in tip top condition and working effectively, millers were reliant upon the services of a mason to recut the grooves. Whilst doing so bits of the metal would chip off the chisel and become embedded in the mason's hands. To show his experience the mason would show the miller this metal in his hands.