As sanswork said, easy to get new devs, but as soon as they've put in a few years it's very easy to go out on your own or go overseas.
You've gotten so used to your cheap labor, indentured workforce,that you can't even contemplate employees participating in a free market?
As for contractors, all's fair in the free market except when contracting to government who are blind to /real/ value due to a range of bureaucratic reasons.