There could be a disconnect between hiring managers and HR and upper management. The hiring managers you know probably do understand the cost of replacing a lost employee and how hard it is to hire. The HR department that's actually in control of this, and of salaries, doesn't, or just doesn't care.

I have a theory that a lot of the terrible mismanagement we see with modern American corporations comes directly from HR. Didn't W. Edwards Deming say that companies would be better off just eliminating their HR departments altogether?