With hiring budgets constrained, some companies are finding a different way to bring in talent: replacing workers with better ones.
“There is just no appetite for mediocrity anymore,” said Brent Orsuga, founder of the supply chain and logistics recruiting firm Pinnacle Growth Advisors. Over the past year, he’s seen many of his clients quietly replace employees rather than grow headcount.
“Everyone was looking at what they have and being like, ‘I want the best of the best,'” Orsuga said.
Take the example of a company with 10 sales reps that is looking to boost performance, he said. They could expand the team. But it’s often more affordable to identify the lowest-performing reps and replace them with better ones — even if the new employees cost a bit more.
While upgrading isn’t new, Orsuga said that 2025 was the biggest year he’s seen for the trend in more than two decades in the recruiting world. He calls it “bullseye hiring.”
“It’s like every seat matters, so I’ve got to hit a bullseye and get the right person in the right seat,” he said.
Hiring has slowed in the US recently, due to economic uncertainty, cost-cutting, and AI adoption. In February, the hiring rate fell to 3.1% — a modern low matched only by the pandemic and early recovery from the Great Recession. Three recruiters across tech, marketing, and logistics said that when companies do hire, it can come at the expense of an existing employee.
One of the driving forces behind the shift, which they said is playing out from early-career roles to the C-suite, is a push to maximize every dollar spent on talent as hiring budgets tighten.
You need to do a “great job” — not a “good job”
Many clients looking to upgrade existing employees turn to confidential searches, said Lindsay Myketey, a recruiter at Cella by Randstad Digital who focuses on mid- to senior-level marketing and technology roles.
She said that as roles evolve, companies may replace workers for several reasons, from underperformance to gaps in skills, including those related to AI. She added that many managers are taking on more responsibilities, and that companies might replace those who can’t keep up. Sometimes, she said, employees are moved into different roles rather than let go.
How replacement searches happen can vary by role and level. For senior roles — typically those paying at least $100,000 annually — Orsuga said companies might use headhunters to conduct confidential searches instead of publicly posting the role, adding that this helps avoid “spooking” the employee they’re looking to replace.
For mid-level roles, he said companies use a mix of headhunters and job postings. Some are required to post roles externally for compliance reasons, he said, and because many employees share similar titles, a new posting can signal growth rather than a looming replacement. Orsuga added that some companies are “always hiring” — bringing on new talent not necessarily to grow headcount, but to replace lower-performing workers over time. That dynamic can disproportionately affect early-career workers, who may find themselves competing with annual cohorts of new graduates.
In some cases, Orsuga said, high-performing employees are cut because they’re too expensive. He compared it to the sports world, where many teams operate under a salary cap. There’s only so much money to spend, and sometimes that means moving on from a talented, highly-paid player.
Read more about people who’ve found themselves at a corporate crossroads
Executives aren’t immune to replacement
When regular workers lose their jobs, it’s not always clear whether they were replaced or simply caught up in cost-cutting. But at the top of organizations, the distinction is often clearer.
Last year, roughly 11% of CEOs were replaced across 1,500 of the largest public companies, according to an analysis by executive-recruiting firm Spencer Stuart. That’s the highest turnover rate since 2010, when the US was emerging from the Great Recession. The report pointed to greater market volatility, complex trade dynamics, and economic uncertainty as factors driving the increase, adding that investors and boards had “less patience for CEOs overseeing weak growth and for those slow to transform their organizations for an AI-centric future.”
Tarun Inuganti, a recruiter focused on tech executive search, said that when his firm, Korn Ferry, is brought in, it’s typically instructed to consider both internal and external candidates, with searches often taking about 90 days from start to finish.
“I’ve talked to many clients of mine who’ve said, ‘We’re just trying to have the best person in the role. We’re just not adding headcount because there’s a lot of uncertainty in the market.'”
For workers across the economy, layoffs remain low relative to historical levels. But Myketey said people shouldn’t overlook the risk of replacement — and being pushed into a challenging job market.
“Even when you have the job, you really need to make sure you’re operating at a high level, like on the ‘good list,'” she said.
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