Staff Overhaul

Should you use the tight job market to replace mediocre employees?

Last year, Matt DeLine, founder and CEO of San Diego Hotel Reservations Inc., was hiring almost everyone who applied. The scramble to fill jobs was insane: "There wasn't time even to do reference checks," he says. "It was a frustrating time."

He wasn't alone: A Challenger, Gray & Christmas survey last year found that three out of five small-business owners were hiring virtually anyone with a pulse-including underqualified workers who affected the bottom line with poor customer service and decreasing product quality. "[Employers] had to get their orders out, so they hired people who weren't as productive and couldn't do the job as well," says John Challenger, CEO of Challenger, Gray & Christmas Inc., an international outsourcing and research firm in Chicago.

But as dotcoms continue to fail and larger companies restructure in a softer market, hot talent is suddenly pounding the pavement. For entrepreneurs in growth phases, it's like manna from heaven. "Many employers now are breathing a sigh of relief," Challenger says. But temptation also forces a hard decision: Do I fire some employees to upgrade my work force while this hot talent is available?

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Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog,

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This article was originally published in the September 2001 print edition of Entrepreneur with the headline: Staff Overhaul.

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