Simply replacing the hubs with switches is a bandaid approach that will once again fall off and require another bandaid.

If all they want is a simple change of hardware, then sell them some switches and be done with it.

But I would not go that route. Not at all.

I would sell them on allowing me to fix the problem once and for all, after a study of traffic volume and priority, security needs and future projected growth needs. Rome wasn't built in a day and neither is a lasting solution.

The best approach to fix their problem is to create a paper plan based on employee gripes, traffic analysis, existing network configuration documents and a couple of building walkarounds with a knowledgable manager. If you want to really fix this problem, you have to get a "lay of the land", ask alot of questions and that means interfacing (connecting) with the people that are gonna live with your solution. Nobody knows the network gripes/needs better than the people who use it.

You use that paper plan to segregate traffic using switches, Vlans, routers with the existing wiring.

It's always a safe bet going that:
1) Too many employees are Internet surfing
2) That alot of traffic comes from Spyware/Adware/Non-work related...
3) That the network was not properly planned and documented (think congestion points)
4) That if they keep bandaid fixing it, one day it'll simply implode (figuratively speaking)
5) They have no idea of the costs incurred by company downtime based on a faulty network infrastructure.

Before you give them a proposal, I'd do my best to convince them a network analysis is the only way to go, before equipment is put into place.

Remember if you sell them a high dollar solution that later needs revamping, customer satisfaction and trust goes down the tubes.

Just my quick thoughts.