I know a lot of current and former SpaceX employees, and can say that while they definitely used to get the best people (including a number of steals from JPL), the sheer hours has definitely negatively impacted their ability to hire the best.

A number of truly genius engineers won't even consider SpaceX anymore because they're married/have children and simply won't put up with the hours.

SpaceX still does a good job of bringing in stellar new graduates, but the lack of experience among so much of their workforce has definitely hampered their R&D.