Adam Savage once said he distrusted anyone that hadn't failed, and I share this sentiment. It's likely that, if you haven't failed spectacularly, then you've not had the opportunity to internalize the lessons that come from failure: humility, caution, compassion, self-awareness, respect for evidence.

If you've already hired talent without this experience, then you'll either need to carefully craft an opportunity for them to fail or wait for them to do so all on their own. The latter is, for me, intolerable, and I would rather provide the proudest among them vague architectural tasks that pit their design sense against that of their coworkers. Being in charge of a design that's perpetually torn apart by your fellow implementors is good practice, and it may even reduce the total hubris of the group.

Depending on their age I show them the door as I have little patience for disruptive or disrespectful cockiness.

or, sometimes in the case of cocky interns, I let give them enough rope to hang themselves. Cockiness at a younger age is just unrefined ambition.

But an arrogant 30 year old that's been in the game for 5 years? Don't let the door hit your ass on the way out.

Give them a task that you know is going to be extremely challenging for them, and tell them that they are the only one you know can handle something so important in such an urgent amount of time. Push their skills to the limit and let them back a sweat over it. It's good for the company and everyone involved no matter what the outcome. Get creative. They can't possibly know it all, remind them.

Confront them. Tell them they're being a dick.