[removed]

You make the assumption though that offboardin\onboarding someone new is cheap.

It isn't. First you have to deal with a candidate search. Aside from the paperwork, going through resumes, discussing with your team\peers\superior what you want the new person to be, you have hard costs associated with that. Maybe you have recruiters involved.

Then you inevitably come across a candidate who makes you rethink the position, and you have to repeat the above.

Then you onboard them, which has costs. Your productivity suffers while you get them up to speed, hoping the entire time they mesh with what you have going on.

And sometimes it doesn't work out, and you have to send them pounding, or they bail. And you get to repeat the process.

Same with losing an employee. Maybe they were besties with someone else, maybe even someone critical to your org, and now that person starts thinking of leaving. Maybe the mood in the place changes because Mary doesn't show up with donuts every friday morning or Steve doesn't run the fantasy league anymore.

From the employee side, it also assumes the working environments are the same (rarely they are).

Sure your company could go every year, "Lets give everyone market rate raises" but that still means companies actively searching will have to pay more, and the cycle continues (not to mention your company figuring out how to keep up with that.......oh wait, i forgot reddit, so something something CEO).

I never disrespected someone coming to me saying, "Line, i'm way below what i can make on the open market, and i have people reaching out to me" I'd fight like hell for the right person to get them to where they should be.

But you can only do that every so often (5 years is a nice number if you are just getting the equivalent of COLA).

Likewise i found that people don't negotiate enough when they increase their responsibilities or roles. That is a perfectly valid time to talk about salary.

I haven't seen this posted yet but as a hiring manager it's because of accounting/budgeting.

Hiring budgets are much larger than retainment budgets. At the end of the year, accounting will determine they are going to give an x% across the board and if you want to give someone more than that - you need to make a business case to pay/promote that person more than everyone else.

However if that same person quits, HR will do an analysis and give me a range that I can pay someone to hire for that same role.

For example: let's say I have an employee that makes 100k, the standard increase is 3k but I want to get them to 110k. I have to jump through hoops to try and get that promotion through and it still might not get approved.

However if that person leaves, I'll get a budget from HR that says that role typically pays 80-120k. I can go and hire someone for 120k (10k more than I was trying to push through) without any issues. No business case etc. - when it comes from HR - these new funding requests are auto-approved because "the market" says that's what we should be paying, which is easier than me as an individual arguing someone should make more. This is also one of the reasons why you can leverage another offer into more pay at your current company - because the market says you're worth more.

Most businesses aren't going to pay you more than someone else thinks you're worth. Not saying any of this is right, just what I have observed.