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?